Diego Mendoza-Moyers: Today, we’re talking education, specifically the situation at Socorro Independent School District, El Paso’s second-largest district.
SISD has gone through some major tumult over the last few years. The district has been wrestling with a budget deficit of tens of millions of dollars and had to lay off teachers earlier this year. The Texas Education Agency appointed two conservators to essentially set the district straight, one step short of a state takeover.
And James Vasquez, SISD’s superintendent, was named to the job over the summer after the district’s former leader left amid accusations by an external auditor that he improperly steered district contracts toward a firm he knew. Meanwhile, two former school board trustees who were voted out in May are awaiting trial on charges related to their trustee roles. And on Tuesday, Nov. 4, voters in the district rejected a ballot proposition that would have given the district more revenue and financial breathing room. It’s a lot.
In a moment, El Paso Matters education reporter Claudia Silva will join me to sort through all of this and talk about what the election results mean for Socorro Independent School District. We’ll also discuss the situation with the state-appointed conservators who are overseeing SISD and the impact they’ve had on the district.
First, I want to mention that this El Paso Matters podcast episode is brought to you by our podcast title sponsor, Tawney, Acosta and Chaparro, truck crash and injury attorneys. Their team of local, seasoned trial attorneys are ready to help if you’ve been injured in a crash. We’re also sponsored by the Greater El Paso Association of Realtors. If you’re looking for a realtor or for a property to buy or rent, visit elpasotexas.com.
Now, on to our discussion.
Claudia, thanks for joining me.
Claudia Lorena Silva: Thanks for having me, Diego.
Diego: So, what happened Tuesday as it relates to Socorro Independent School District?
Claudia: Well, Socorro ISD held a voter approval tax ratification election, which you might have heard been called a (VATRE), which appeared on the ballot as Proposition A. Basically, what the district was asking is they were asking voters if they could move 12 cents from the portion of their tax rate that’s used to pay for their debt to the portion of the rate that’s used to pay for their operations. This is known as a penny swap.
And, essentially, this could have generated about $49.2 million for the district without actually raising the tax rate higher than what it was last year. So, 52.8% of SISD voters actually rejected the measure. At the same time, Texas voters also voted to approve a constitutional amendment that would have increased the homestead exemption from $100,000 to $140,000, which actually was approved. So, this homestead exemption, regardless of what happened with the Proposition A, would have lowered the school district’s portion of the homeowner’s tax bill.
Notably, homeowners probably would have saved a bit more money if they rejected the proposition. Currently, the average SISD home worth $232,700 will see their bill go down by about $455. If voters had approved Proposition A, they would have only saved about $345 a year on their tax bill.
Diego: So, it would have been mostly offset?
Claudia: So, any increases that would have come from this – which, usually, even if the tax rate stays the same one year after another, a lot of times people will still see an increase in their tax bill because of the valuations of their home. So, whatever increases in valuation would have essentially been offset by the homestead exemption.
Diego: So, what do you think the election results from Tuesday mean for Socorro Independent School District and just the fact that the voters rejected the proposition?
Claudia: Well, to understand what this means going forward for Socorro ISD, you really need to understand why they decided to hold this election in the first place. And a lot of it really ties back to decisions that were made by previous leadership and even decisions that were made years ago.
So, SISD has been overspending for quite a long time. So, when the board adopts a budget every year, generally what we’ve been seeing is for the past decade, their expenses have been higher than their revenue. Most of those spending decisions were made by board members who are no longer in office, and they were also made under the previous superintendent. Notably, last year, Nate Carman was placed on leave before he was already planning to leave for Arizona.
And in May, we had an election, and many of the board members who were in office, or a couple of them who were – actually, no, were still technically on the board, but were no longer coming to meetings or really participating or doing their job. They got replaced. So, really, there’s only one board member, Paul Guerra, who’s been there for quite some time, who was actually essentially responsible for a lot of these decisions.
(Editor’s Note: Board member Michael Najera was also elected as a trustee of SISD in May 2021 and was reelected to a three-year term in May 2024. Another contributing factor to the district’s financial situation is that the state government has not increased the basic allotment of state funding per student – a little over $6,000 – since 2019, even as inflation escalated costs for schools over the years.)
So, anytime that there’s a budget deficit, the district needs to find a way to pay for those expenses. Usually, they will dip into their savings or see if there’s some other revenue option, but most of the time, it’ll end up going to their savings. After years of budget deficits, those savings basically started to run out. So, this has been forcing the district to take out loans in recent months. Usually, districts use their savings to cover their day-to-day expenses. And a lot of times they have to do that while they wait for tax revenue to come in or for payments from the state to come in. When their savings are low, they have to resort often to loans to cover those expenses while they wait for that revenue.
So, now we go to the summer. SISD has a mostly new board with the exception of Paul Guerra. They have a new superintendent. Now, we have these leaders who are basically tasked with fixing mistakes from past leadership. So, what they wanted to do to kind of dig themselves out of this hole is they decided to use this proposition to generate more revenue and rebuild the district’s savings. Now, without the option, the district will likely have to take out more loans to cover its expenses.
The district is also dealing with declining enrollment. So, that means that the district is going to be getting less money year-over-year from the state. Last time this happened, we saw the district had to encourage some employees to retire, even offering stipends for them to retire. They had to reduce class sizes. They got rid of certain art programs. I believe it was like, the elementary music – elementary school music programs that were gotten rid of. And they even had to lay off employees.
Notably, the district initially planned to lay off up to 300 employees. They were able to actually get that down to only 23. And a lot of what they did there is by having to kind of just move them around to different positions, try to see if they can get them, like, certifications and things like that, just to try to reduce the number of people that lost their jobs.
But, essentially, because the district is going to be making less money than it did in previous years, they’re going to have to be looking at more options to cut their budget. And a lot of those decisions that were made last year or over the last year may end up having to repeat themselves if they want to have a balanced budget.
Diego: Yeah. So, maybe more tough times ahead for Socorro school district?
Claudia: Yeah, definitely. A lot of tough decisions that are going to have to be made, a lot of tightening their belts, and just having to be creative to kind of come up with ways to save money wherever they can.
Diego: Why do you think voters rejected Proposition A?
Claudia: Well, one of the main reasons that I was discussing with Superintendent Vasquez yesterday (Tuesday) after we had called the election is that the district hadn’t really done enough to rebuild trust. Obviously, there were a lot of things going on before these new leaders went on board.
The previous superintendent, he left after he was placed on administrative leave for taking part in awarding a contract to a company he had previously done business with. Then, we had two board members who are being investigated and facing felony charges that relate to – appear to be related to their positions on the board. Notably, these board members, they did kind of have a reputation for harassing employees of the district. And they were even caught on tape at one point calling themselves the “school board gods”.
So, there was a lot of mistrust. And I think that there still is. I think a lot of people don’t really fully understand who the new board is. That they are – a lot of these members are not the same people that were making the decisions previously. And a lot of people just don’t feel confident that the district is going to manage the money properly. They’re worried that this is going to be a repeat, that if they approve this, that it’s just going to happen again. They’re going to be overspending and kind of be stuck in this deficit situation.
Another reason that Mr. Vasquez mentioned to me that may have caused the election to go this way is some of the language that’s required on the ballot by the state. So, anytime a school district raises its maintenance and operations rate, which is the rate, the portion of the tax rate used to pay for the district’s operation – so, that’s salaries, utility bills, supplies, anything like that. So, anytime that it goes above a certain level, the state requires that the district include “this is a tax increase” on the ballot. Now, in this situation, because it was a penny swap, because it was moving from the interest and sinking, which is the debt repayment portion of the tax rate, to the maintenance and operations portion, it was technically keeping the rate exactly the same as last year. But that language was still required on the ballot for it to say “this is a tax increase.” So, I think many people just see that language and they don’t want their property taxes to increase. Maybe they don’t fully understand the situation, what the money is going to be used for, where it comes from, how it affects their property taxes, and they basically just say “no.”
Diego: Yeah. I’ve got a few more questions for you, Claudia, but before we go on, I just want to take a 30-second break to play a message from one of our sponsors, the Greater El Paso Association of Realtors.
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Diego: Now that we’re back, I wonder, Claudia, if you can kind of take a step back and move away from the election and just talk about the conservatorship that Socorro Independent School District has been in? Just wonder if you can explain kind of what that means, what is a conservatorship and who are these two guys that you really quoted a lot in your story that have been kind of overseeing the district? Just wonder what you can tell us about kind of how the conservatorship works in Texas?
Claudia: Yeah. So, Andrew Kim and Michael Hinojosa are two conservators that were appointed by the Texas Education Agency to oversee Socorro ISD. And this happened after a state audit found several issues within the district. Notably, the district improperly graduated students in 2019. There was also a situation where Trustee Paul Guerra failed to disclose a certain conflict of interest, even though he said that he did disclose it. There was never any record within the district that he did that.
So, essentially, their job is to address the issues that were found in the audit and just help guide the district through any problems that it may have. Now, one thing that I think was interesting is that when they got here, they realized that the district actually had a lot of financial issues. And that wasn’t actually a purview of the audit or something that was included in the audit. So, when they got here, besides addressing the issues that they were initially sent here for, they also wanted to help the district address some of those, the financial problems. Particularly they noticed that the district was having a difficult time managing its savings. And it’s kind of led it to the situation where it is now, being forced to take out loans just to be able to keep operating.
Diego: Wow. So, it’s kind of a range of issues that Socorro was dealing with before that led them into conservatorship, basically?
Claudia: Yeah, definitely.
Diego: So, you wrote a story this week that was basically saying that the Socorro Independent School District could be, maybe sometime next year, coming out of the conservatorship. Just wonder what you can say about that and what are these “exit criteria” you refer to in your story that will sort of determine when they no longer have to be overseen by these guys appointed by the state?
Claudia: Yeah. So, when the conservators came on board, they said that they expected to be here for about two years. And, yeah, typically conservators will stay at a district for two years. So, when they arrive, they usually will set exit criteria. And this is basically everything that the district needs to do before they will be allowed to leave.
And, so, for Socorro ISD, they had four main criteria that they wanted to address. So, the first thing was to correct the credit issue. And actually, Mr. Hinojosa and Mr. Kim realized that when they got here, that Socorro ISD had already taken the initiative to correct most of those issues. The second thing that they wanted to do was to correct the board’s behavior or essentially make sure that the board was following all the rules and doing things correctly.
I think we look back to those previous board members who once called themselves “school board gods” and Mr. Guerra not – or at least the district not having the paperwork for his conflict of interest. So, I think they wanted to kind of ensure that the board understood what their duties are, what their responsibilities are and that they don’t overstep some of those responsibilities.
Notably, the board, they are the bosses of the superintendent, but they don’t really have a lot of control of the day-to-day operations of the district. They’re not – they can’t fire or hire regular employees or make a lot of those decisions. So, I think the board just wanted to – or, sorry, the conservators want to make sure that the board understands that.
The other thing is that they wanted to select a new – help the board select a new superintendent. Shortly before they arrived is when Nate Carman was placed on administrative leave. And, so, I think that was also important to them to ensure that they helped the board select a new leader.
Diego: Yeah, have good leadership in place.
Claudia: Yeah. And lastly, the last thing which the district is still working on is to develop a customer service program. And essentially what this is is just the way that the district interacts with the public, students, parents and things like that. They had noticed that there wasn’t very much protocol or there wasn’t really a set way of dealing with issues or concerns. And they just want to make sure that any time that something happens where there’s a concern, that there is, I guess, kind of a positive experience rather than people coming away frustrated or upset with the district.
Diego: Just generally, would you say the district is better off now after the conservators have kind of come in and tried to address a few issues?
Claudia: The district is definitely in a better position now than it was a couple of years ago. I mean, notably, before the district was operating under a budget deficit, and this last budget season, they were able to get it balanced, and they even had a little bit of money left over to continue operating the aquatic center, which was something that could have, was kind of a contentious issue, and they were looking into potentially closing it earlier in the year.
Notably, when I was talking to the conservators last week, they did mention that if the district didn’t turn things around with its budget, they could have faced much harsher state oversight. So, if a district continues to have budget deficits and they become insolvent so they could no longer pay their bills, pay their employees, then at that point, they can be subject to state takeover. And that is something that the conservators did mention that Socorro ISD was at risk if they didn’t get their budget on track. And they could be at risk of it in the future if they don’t figure out what they’re going to do with their savings, rebuild them, and if they have more budget deficits in the future.
Diego: Yeah. Just last question here. I appreciate you laying all this out for us, Claudia. What would you say – or could you just kind of explain the tie-in between the results of last night’s election, the VATRE election, and the end of – or potential end of SISD’s conservatorship?
Claudia: Yeah, I definitely can explain that. So, the conservators want to make sure that SISD can handle its budget before they leave. And the proposition has a huge effect on the budget. So, the conservators just want to make sure that the board is able to make the decisions that they need to make in order to achieve a balanced budget. And, a lot of times, that may mean making budget cuts that may not be popular and making difficult decisions.
So, I think they’re going to be sticking around at least to make sure that the board is willing to make those decisions and willing to do what it takes to have a balanced budget. Now, if the board decides that they don’t want to make some of some necessary cuts and they start operating on a deficit again, that could lead the conservators to stay here longer and potentially even overturn some of the decisions that the board makes.
Diego: Yeah. So, it’s not like SISD is necessarily out of the woods financially and operationally?
Claudia: No, not yet. It’s going to take a lot of time and a lot of work, and we’re really just going to have to see what decisions are made for the future of the district. I think things are going to be pretty tough for the district, and I mean, really, only time will tell.
Diego: Yeah. Well, we’ll leave it there, Claudia. I always appreciate your detailed coverage on some of the school district issues that are – as a non-education coverage guy, it’s always helpful to read your coverage to understand what’s going on. So, we appreciate it. And we’ll look to you to keep us updated on Socorro Independent School District and all the other school districts here in town.
Claudia: Yeah, it’s my pleasure. Looking forward to coming back.
The post Podcast: SISD voters rejected tax rate proposition. What’s next for the district? appeared first on El Paso Matters.
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