The shale bust has slowed the river of money that Eagle Ford school districts had come to rely on, with some wondering how they will survive.
During the height of the shale boom, the drilling frenzy brought $1.5 billion in property tax revenue for local Eagle Ford schools and another $676 million for the Permanent School Fund. But as the oil and gas activity dried up, so did the tax revenues that fund local school districts.
The bust now threatens to be a serious financial blow to many districts. For the upcoming 2016-2017 school year, some are facing serious deficits and others will delay pay raises and hiring in order to juggle their budgets.
One worst-case scenario is the Cuero School District located in DeWitt County, where property values will likely drop 35 percent this year. This decrease will force the district to slash its budget by as much as 22 percent.
School districts located in the Eagle Ford are facing a double whammy because many have to actually pay back state funds, at a time when they can least afford to do so.
Texas public school financing policies state that districts that are designated as ‘property wealthy’ must give back some or all of the state funds they received in the prior fiscal year. This means that the districts that enjoyed additional funds due to the boom, must now give that money back at a time when their revenues are shrinking due to the downturn.