Are Eagle Ford School Districts in Jeopardy?

Will Tax Revenues Fall For Texas Schools?
Will Tax Revenues Fall For Texas Schools?

Eagle Ford schools face an uncertain future as the downturn moves into its second year.

Related: Texas GLO Adds $1.26-Billion to Fund for Public Schools

North Texans for Natural Gas, a pro-industry group, released a new report showing that drilling from the shale boom Texas helped boost the budgets of the state’s public schools in 2014. According to the report, oil and natural gas development generated $1.5 billion in property tax revenue for schools and another $676 million for the Permanent School Fund, the state’s education endowment for school districts.

The biggest impact has been in the small, rural school districts including throughout the Eagle Ford. According ot the report, Karnes City collected $37 million in oil and gas property taxes in 2014. The Three Rivers ISD was able to build a new $11 million high school and a $1.2 million football field as a result.

That was great news while operators were drilling at a crazy pace, but the prolonged crisis is bound to affect the tax revenues that these districts have become accustomed to.

Cotulla ISD is one example of an Eagle Ford district that saw its property tax base balloon from $450 million in 2009 to nearly $7 billion today, but they were smart and saved some of the extra wealth just in case.

We never did go crazy and spend a bunch of money on stuff. We know that when the values start dropping, they drop like a rock, and it’s theoretically possible, although not probable, that we could owe more in recapture than we collect in taxes if the bottom falls out.” Seals added, “I’m nervous every day.
— Cotulla Superintendent, Jack Seals

Seals said the district hasn’t seen a dramatic decline in its property tax base. But he goes on to say that there are signs that make him nervous such as the local hotel rates plunging from $250 a night to $60 and the oil trucks disappear from the highways.