The Socorro Independent School District is considering layoffs, pay cuts and a tax ratification election that could increase property taxes amid a $33 million deficit.

“We could be considering a reduction in force or reducing the number of employees through attrition. … A lot of what they’re discussing would be to save personnel costs by increasing class sizes,” SISD Superintendent Nate Carman said during a January board meeting. “Options could include zero raises for all employees pending additional state funding to balance out the budget.”

This comes as Carman prepares to leave the district in July for a new position as the leader of the Higley Unified School District in Gilbert, Ariz.

Now district staff are raising concerns about reductions to their pay and how staffing changes could affect class sizes.

“As far as increasing class sizes, I must say please don’t. On my campus, there are classes that have 40 or more students already,”Capt. Walter E. Clark Middle School teacher Christopher Buntyn said during a Feb. 21 board meeting.

During the public comment portion of the Socorro Independent School District Board of Trustees meeting, SISD teacher Christopher Buntyn criticized the suggestions of outgoing superintendent, Nate Carman, to handle budget issues by increasing class sizes and pausing raises for personnel. (Corrie Boudreaux/El Paso Matters)

Carman was not present during the meeting.

SISD staff and trustees declined El Paso Matters’s request for an interview about the budget issues and did not respond to a list of detailed questions. Instead, the district provided a list of frequently asked questions and directed reporters to a video of the Jan. 23 board meeting.

The FAQ states that so far, there have been no changes to address the deficit.

Nate Carman, Socorro Independent School District Superintendent, is absent from a Board of Trustees meeting on Feb. 21, shortly after announcing that he will be leaving his position to accept new employment in Arizona. (Corrie Boudreaux/El Paso Matters)

The SISD school board had initially scheduled a workshop on Friday to discuss options, but it has been moved to March 5.

The deficit was caused partially by the school board’s decision to approve a larger compensation package than was initially recommended by the district’s administration. The package, which was passed in June, gave staff raises and retention bonuses, in anticipation that Texas lawmakers would use the state’s $32.7 billion surplus to fund teacher raises and increase the basic allotment school districts get per student. 

Though several legislators supported these efforts, they failed after Gov. Greg Abbott packaged the funding with a failed school voucher program, which would have allowed students to go to private schools using state funds. Democrats and rural Republicans largely opposed the program. 

Now a number of school districts in Texas are dealing with similar issues, including Canutillo, Clint and Tornillo.

For SISD, this is the second year in a row it is facing a multi-million dollar deficit and has had to dip into its reserve to cover it.

An audit of the 2022-23 school year revealed the SISD spent $23.6 million more than it made in revenue. The district reported that it had more than $72.9 million in reserve at the end of that school year, according to the district’s annual financial report. 

This left SISD with enough reserve cash on hand to keep the district running for 55 days if funding ever shut off completely, district staff said during the Jan. 23 meeting.

The TEA recommends school districts have at least 90 days worth of cash on hand. SISD’s local policy requires the district to have at least 75 days on hand but no more than 105 days.

Still, the district should be able to keep itself afloat as long as it has more than 30 days on hand, said Manny Soto, the data director for the Council on Regional Economic Expansion and Educational Development, or CREEED.

Soto has more than 40 years of experience in education and school finance. CREEED funds and builds efforts to increase educational attainment and improve student performance in the El Paso region, and has made grants in the past to Socorro ISD. 

School districts in deficit are at risk of receiving a failing grade from the Financial Integrity Rating System of Texas. The Texas Education Agency has also cited budget deficits as a reason for taking over other school districts, including the Houston Independent School District.

How did SISD fall into deficit?

Staff compensation is the largest part of SISD’s budget and had the greatest effect on its deficit. Some said the blame falls on the SISD school board, which ultimately has final say on the district’s budget.

“The administration recommended a lower salary increase but the board — in order to say they pay the best — passed a larger salary increase. They weren’t very smart with that in terms of the deficit that is creating now,” Soto told El Paso Matters.

During a June board meeting, administration recommended giving a 2% raise, which would cost the district $6.1 million. This would have left the district with a $15.2 million deficit for the 2023-24 school year.

Instead, the board approved a resolution that gave employees a 4% raise, a $1,000 retention stipend, increased the starting salary for teachers to $60,500 and increased bus driver minimum wage to $20 an hour, among others. Combined, the changes cost the district $23.9 million, leaving it with a $33 million deficit.

The stipend was initially supposed to be paid for using COVID-19 relief funds, but Carman said during the January meeting that the funds had already been depleted.

The district also made several upgrades that added to the budget, including spending $6 million on turf for all campuses, $3.1 million on gym restrooms and water fountains and $2.3 million on planning for academy campuses, Carman said during the Jan. 23 meeting.

The previous year’s deficit had a similar story.

For the 2022-23 school year, staff recommended a compensation plan that would have given a 5% general pay increase, increased teacher entry salary to $56,900 and given staff a $1,000 stipend using COVID-19 relief funds. This would have left the district with a $19.2 million deficit.

The board ended up approving a plan that gave staff a tiered 4-6% raise, increased teachers’ entry salary to $56,900, gave a $2,500 stipend and increased the minimum wage to $15 an hour.

This cost the district $28.2 million extra in payroll from the prior year and $11.8 million more than the plan that was initially recommended by district staff.

An audit later revealed the district ended the 2022-23 school year with a $23.6 million deficit.

In 2022, district administration also recommended making changes to its health plan for the following year to save money after the district had been tapping into its reserves for several years to cover it.

Some of the changes included lowering the amount the district contributes for spousal coverage. The board voted to keep the cost the same as previous years and lowered the cost for employees and children. At the time, district staff noted that this could have a $2.1 million impact on the total infusion from the general fund.

Enrollment impact

District staff said inflation and a decline in enrollment growth were other factors that contributed to the deficit. State funding to schools is based on a per-student formula, so fewer students results in less revenue.

Socorro Independent School District sixth-grader Adrian Enriquez became the 48,000th student at the district when he enrolled at Sanchez Middle School this January. (Courtesy/Socorro ISD)

In 2023, Carman touted SISD as the fastest growing school district in El Paso County when its student enrollment reached 48,000 students. Now district administration said that growth has slowed as fewer students are moving into the area, according to the FAQ provided by SISD. The district finished the 2022-23 school year with 47,741 students.

Data from the TEA also revealed that SISD has been losing students to neighboring school districts and charter schools.

During the 2022-23 school year, the SISD had about 8,600 transferring out to another school district or charter school, while only 1,400 transferred in.

That means that of the roughly 55,000 students living in the SISD area, 16% — or 1 in 6 — are going to school somewhere else. About 3,300 of those students transferred to the Ysleta Independent School District and another 3,300 moved to the IDEA and Harmony charter schools.

The number of students transferring out of the district has also grown in recent years. During the 2018-19 school year, about 6,250 students transferred out of the district. That number gradually rose to 8,600 during the 2022-23 school year. 

What is SISD planning to do about the deficit?

The only way for a school district to deal with a deficit is to either increase the revenue or decrease expenditures, Carman said during the January meeting.

One way the district can increase its revenue is by holding a tax ratification election, also known as a TRE, or penny-swap election. This would allow the district to move pennies from the interest and sinking tax rate — which is used to pay off debts — into the maintenance and operations tax rate.

Carman said the district could get up to $50,000 in additional revenue, depending on how many pennies voters approve to swap, and would require a tax increase.

In 2018, El Paso ISD voters approved a penny swap that did not require a tax increase. Socorro ISD officials did not make anyone available to explain why a tax increase was needed.

The district is also looking into asking voters to approve a bond for at least $628.8 million to pay for modernizing campuses, school safety improvements, transportation and other needs.

To save on expenses, staff said the district could freeze the pay raises it had approved in June, cut programs or reduce the number of teachers it has. It could also switch from a self-funded health insurance plan to a new plan through the state’s health insurance program. This could save the district up to $20,000 a year, Carman said in the January meeting.

However, some of the proposals to lower expenses did not go over well with some board members, who were concerned about losing staff.

Ricardo Castellano, Socorro Independent School District Trustee, attends a Board of Trustees meeting on Feb. 21. (Corrie Boudreaux/El Paso Matters)

“We need to take care of our teachers,” Trustee Ricardo Castellano said during the January meeting. “No raises is going to cause teachers to think, ‘well Sorcorro is not the place for me, I need to get out,’ and if you change the health care, you know that is a big program for them to buy in and stay with us.”

Castellano’s wife used to be a teacher at SISD. She now works for another school district in El Paso. 

Soto said SISD likely will have to turn to the voters for a TRE to deal with the deficit without sacrificing staff compensation or programs for students.

“I think anywhere they go, they have to have an election,” Soto told El Paso Matters.

Disclosure: The Council on Regional Economic Expansion and Educational Development is a financial supporter of El Paso Matters. Financial supporters play no role in El Paso Matters’ journalism. The news organization’s policy on editorial independence can be found here.

Update, Feb. 27, 2:30 p.m.: This story has been updated with the new date for SISD budget workshop.

Claudia Silva was born and raised in El Paso and studied journalism at New Mexico State University. She's covered a number of topics, from education to arts and culture, in both Texas and New Mexico.