The Houston school system could lose up to $348 million a year in state funding for the next two years if the legislature makes proposed cuts to state education financing, the district’s top financial official said this morning.

The proposal released late Tuesday, includes a $10 billion cut in state education funding over the next two years, or $5 billion a year. For the Houston Independent School District, that means losing anywhere between $203 million-$348 million a year, according to the law firm Moak, Casey & Associates. (To see how HISD’s cuts compare to other school districts in the state, click here.)

“This is just the beginning of budget proposals from the state,” HISD’s chief financial officer, Melinda Garrett, said Thursday. “These numbers are changing daily.” She said the changing state budget outlook makes it more difficult for HISD to create and approve its 2011-12 budget, which, under state law, is required to be approved by June 30.

To prepare for the budget cuts, HISD has been working to create zero-based budgets that include no new spending by departments. Those final budgets are due at the end of the month, Garrett said.

She and other HISD administrators are also creating two lists of ways the district can save money and cut spending -- definite proposed cuts and possible cuts. Both lists will be presented to the board for approval once complete.

HISD trustee Carol Galloway said she would like to see the district look at fundraising opportunities like advertisements or sponsorship programs.

“Sponsorships and advertisements are not enough,” HISD Superintendent Terry Grier countered. “You (trustees) are talking nickels when it is $200 to $300 million.”

On top of creating lists, HISD is specifically looking at four pots of funds used for individual campuses in the district -- magnet funding, unique per-pupil funding, extra money given to schools with low enrollment and high school allotment funds.

Additional funding for small schools and magnet programs have come under recent scrutiny by HISD trustees, parents and community members. HISD will spend $17 million funding magnet programs and more than $10 million on small school subsidies this year. (Texas Watchdog has made all of HISD’s school funding data available for you to see for yourself -- click this link to visit our search page to see all the funding sources for any HISD school.)

As the budget conversations continue, HISD will hold a series of community meetings this month.

Do you have suggestions on how HISD can cut back on spending? Texas Watchdog wants to hear from you. Contact Lynn Walsh, Lynn@TexasWatchdog.org, 713-228-2850 or @LWalsh on Twitter.

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