Texas Weighs State Aid for Coastal Schools Amid Soaring Insurance Costs
Coastal school districts in Texas, including Flour Bluff ISD, are grappling with dramatically increasing property and windstorm insurance costs. To manage these expenses, the Flour Bluff Independent School District (ISD) has made the decision to lower its insurance coverage, a move that reflects the financial strain faced by these districts situated near the Gulf of Mexico.
The Flour Bluff ISD board of trustees recently approved property, windstorm, and flood insurance plans. This decision comes after the district brought the issue to the attention of local lawmakers. The district was able to find some savings, but is looking for a more long term sustainable solution. Fortunately, state lawmakers are now considering legislation that could provide crucial financial assistance to these coastal educational institutions.
Flour Bluff ISD’s location makes it particularly vulnerable. Although the district’s schools are on the mainland, they’re located between Oso Bay and Laguna Madre. Many students reside further out on North Padre Island, a barrier island exposed to the open waters of the Gulf.
Coastal school districts have faced escalating property and windstorm insurance costs since Hurricane Harvey in 2017, according to Flour Bluff school leaders.
To address these rising costs, the district explored various options. Initially, the district explored the possibility of reducing insurance coverage to free up funds for teacher raises. Between the 2020-2021 and 2024-2025 school years, the district experienced a premium increase of over $1.7 million, with the 2024-2025 property insurance premium reaching around $3.2 million. The district had a 5% deductible and a loss limit of $50 million. The loss limit represents how much the insurance covers after the deductible is met. Before Hurricane Harvey, the district’s loss limit was significantly higher, at $100 million. However, it has been reduced to $25 million.
Despite these efforts, the district still spends a considerable amount on property and windstorm insurance compared to districts further inland. Superintendent Chris Steinbruck and the Flour Bluff ISD school board advocate for aid from state lawmakers as a long-term solution.
The Texas House of Representatives is currently considering House Bill 2, a piece of legislation addressing educational matters, including school property and windstorm insurance. The bill aims to provide additional state aid to coastal school districts to help manage their elevated insurance costs. The proposed aid would be $55 per student, based on the district’s average daily attendance.
Similar districts face parallel challenges. Nearby Port Aransas ISD, located on Mustang Island, spends over $1 million annually on property casualty insurance, which constitutes 10% of its budgeted revenues.
The original version of House Bill 2, introduced on February 20, outlined that coastal school districts would gain access to extra state aid to offset the increased costs associated with maintaining insurance. This aid allotment would be based on $55 per student, using the district’s average daily attendance metrics. For Flour Bluff ISD, with an average daily attendance of approximately 5,212 students in 2023-24, this could translate to around $286,000 annually, contingent on stable attendance and enrollment numbers. Port Aransas ISD, with an average daily attendance of roughly 490 students last year, could receive approximately $27,000 if the bill passes at the proposed rate, depending on student counts.
