Rising costs and stagnant state funds pushed this West Texas school district to the financial brink

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ODESSA — When Superintendent Scott Muri joined Ector County Independent School District, students scored poorly on the state’s standardized test. The state’s school rating system gave the district a D the year before he was hired.

Muri, a veteran school administrator with a reputation for running high-performing districts, said fixing Ector County ISD needed to start with teachers. The district was 350 teachers short. He used funds from a historic financial boost to public education approved by Texas lawmakers in 2019 to introduce salary increases, hire more teachers and train them.

His plan worked. Over the next five years, students improved their grades. By 2022, the district’s rating had gone up to a B.

But the same windfall that financed his strategy has not kept up with inflation, an issue he and other educators across the state say has become impossible to ignore. Ector County ISD faces a $12 million deficit in its budget for the 2024-25 school year.

The district made cuts small and large — from shopping for cheaper internet services to closing down two schools — but Muri refused to lower spending on teachers. Paying them is the district’s biggest expense, he said, but they’re also the people he credits for turning it around.

Ector County ISD is not the only district in Texas tapping into its savings and operating in the red. Like most Texans, the state’s more than 1,000 school districts are feeling the strain of rising costs due to inflation. They also face other financial challenges, like the end of federal COVID-19 pandemic relief funds next month and a new state law approved last year requiring districts to pay for school safety upgrades in response to the Uvalde shooting.

Meanwhile, school leaders' calls for more state money have not been heeded. Last year, lawmakers failed to pass a significant funding increase as they fought over school vouchers, a program to use taxpayer money to pay for private education. Opponents in the Texas House successfully blocked voucher proposals, citing worries that such programs would siphon funding away from public schools. But their efforts also meant schools would not get any additional funds: Gov. Greg Abbott had vowed to veto any proposal that did not include vouchers.

For Muri, Ector County ISD’s financial woes are an example that, under current state funding levels, giving children a quality education is becoming increasingly unsustainable.

“Our state is not investing enough money in public education,” Muri said. “That’s it.”

Turning a district around

Muri is a respected administrator who has spent more than a decade serving as the highest-ranking school official in several districts. He began his career as superintendent in North Carolina, where he oversaw 28 schools. He later moved to Spring Branch ISD in Houston, which educates roughly 33,700 students. There, he won a nationwide award for his work upgrading technology across the district.

Muri’s work at Ector County ISD led The Dallas Morning News to name him a finalist for the newspaper’s 2019 Texan of the Year award, citing his leadership in the aftermath of a mass shooting in Odessa. In 2022, he won a regional award for superintendent of the year in West Texas. That year, Abbott appointed Muri as vice chair of the State Board of Education, then reappointed him again for a six-year term.

Muri joined Ector County ISD, which serves about 33,500 students, at a time when longstanding failures caught up to it.

Low pay and morale had left the district without enough teachers to staff its classrooms. As a result, most students often got substitutes instead of full-time teachers, and kindergarteners attended school half of the day. Muri said the impact of the district’s teacher shortage reflected in students’ academic performance.

Muri, who has testified before the Legislature on multiple occasions about teacher retention, student learning and education technology, said the district could only escape its degraded condition by bolstering the quality of teachers and principals. And for the last five years, he focused on that task.

Muri raised salaries from $45,000 to more than $60,000 and promised annual raises to keep up with the cost of living. The district partnered with local universities to launch apprenticeship programs for aspiring educators. He established a new paid program, the first of its kind in the nation, to train teachers who wanted to become school principals. Muri argued that effective leaders begin in the classroom.

The district also redesigned some teaching roles for a select group of staff. Those teachers spend half the workday with students and the other mentoring their peers. Those teachers make salaries of up to six figures.

Last year, Muri helped the district convince voters to approve debt to fix up the schools after previous failed attempts.

Over time, things at Ector County ISD got better. The number of teacher vacancies has dropped to 60, which the district plans to fill this month. Every classroom is now staffed with at least one full-time teacher, some of whom get help from a teacher’s aide.

Today, the kindergarteners’ reading level surpasses the state average. Ector County ISD’s teachers have earned national accolades. Student scores in the state’s standardized test improved. Graduation rates have gone up.

“Our kids have access to better human beings than they did five years ago, higher-quality teachers, and higher-quality leaders, and it's made a remarkable difference,” Muri said.

But this year, the district’s earlier successes have been overshadowed by looming financial hardships that will test its ability to maintain its momentum.

School funding and inflation

A historic investment in public education that the Texas Legislature passed five years ago helped pay for Muri’s initiatives.

In 2019, Abbott signed House Bill 3, which awarded $11.6 billion to public schools — more than the Legislature had ever approved.

The law retooled the formula the state uses to calculate how much money to give each school district. The formula had not been updated since 1991 and, as a result, schools in rural areas were for years significantly underfunded compared to their wealthier counterparts.

The new system, which passed with rare unanimous support, determines funding based on a school’s average student attendance. Each school receives a base amount per student and can get more money if the school has children with specific needs, like special education students or English learners.

School leaders say the formula more adequately captures the circumstances of each district but fails to account for changes in the economy.

Inflation in recent years has sharply increased the cost of goods while making it difficult for consumers to keep up with it. For schools, everything from instructional materials to construction tools costs more than it did when Texas updated its school funding formula.

“The Legislature has been pretending that there's been no inflation since 2019. It's really hard to stick [to] a budget when your labor costs are up and your revenues aren’t,” said Lori Taylor, a Texas A&M professor and department head who researches school finance.

Schools administrators last year called on lawmakers to increase public education funding to account for inflation but the heated, bitter battle over school vouchers curtailed any effort to boost funds. State legislators also failed to pass all but one recommendation by a task force Abbott created to address the state’s chronic teacher shortage. The group had recommended pay raises and improved training.

Schools and their advocates are preparing to ask for more money again next year, when the Legislature reconvenes. In the meantime, school leaders say it’s getting harder to make ends meet.

A dire picture for Ector County ISD

The largest share of Ector County ISD’s spending is for teacher pay and supplies.

The district set aside $203 million for the 2024-2025 school year to pay those costs — an amount Muri said will help keep his staff from going to work for other districts or the region’s lucrative oil sector. He said the district won’t raise teachers’ pay to account for the cost of living this year, as it did in the last four, but will issue a one-time bonus of 3% of their salary.

“Compensation is one way that we ensure that we have great people, not the only way. But it is it is a significant way,” Muri said. “If I wasn't giving raises to my folks, especially in this area, they would find other opportunities — gas and oil pays a lot of money. So I don't have a choice.”

School safety expenses have also gone up. Last year, the Legislature passed a law requiring schools to place armed personnel on every campus. Deborah Ottmers, Ector County ISD’s chief financial officer, said the salary and benefits for each of the 62 officers the district now employs cost about $100,000. The district also has to pay for training, vehicles, dispatchers, administrative staff, equipment and weapons. Altogether, its security spending went up to $8.2 million this school year.

To fund its mandate, the Legislature approved giving every school district a one-time payment of $15,000 per campus, plus $10 for every student every year. For Ector County ISD, that means getting about $1 million from the state — some $7 million below what it needs to pay this year.

The district’s property insurance costs have risen steadily in the last few years as well. In 2019, Ector County ISD paid nearly $2 million in property insurance. This year, Ottmers said it paid $5 million.

“Our costs have gone up for … whatever we spend money on, just like it has in your household,” Ottmers said.

Muri said the district has cut costs where it could but he has no plans to cut teacher pay — he said he would invest in his teachers again if he was given a choice. The district will try to stretch its budget to fill its vacant teaching positions. Ottmers said the district eliminated other roles it could manage without, including clerical, maintenance, custodial and administrative staff.

But without more state help, Muri said, soon there won’t be much more the district can do to stay afloat.

“I would hope that the Legislature continues to listen … to the needs of those of us in public schools, just as we commit to listening to what their hopes and dreams are for the state of Texas,” he said.

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