The “outlook remains negative” for Dallas County’s taxpayer-subsidized school bus bureaucracy that just defaulted on millions in debt payments.

After years of mismanagement, scandal-plagued Dallas County Schools failed to make debt payments that were due June 1. That default followed yet another credit rating downgrade that dropped the agency to below junk bond status.

Moody’s issued its latest downgrade of DCS’s credit rating on May 31 based on several factors, including the agency’s “history of extreme revenue underperformance and budget shortfalls.”

“The negative outlook reflects our expectation of sustained and ongoing financial stress given the lack of liquidity to meet payment obligations and uncertainty as to how the district will achieve sufficient operating liquidity in the near term.”

The agency is failing financially despite being subsidized by taxpayers countywide – whether they use DCS services or not. DCS rakes in about $20 million a year from a one-cent ad valorem tax on all Dallas County property. The bureaucracy also receives a $21 million annual transportation allotment from the state. Yet DCS has over $130 million in outstanding debt.

For months DCS has been rocked by scandals over everything from covering up safety violations, to financial mismanagement and misuse of taxpayer money, to allegations of corruption.

The Texas Legislature had an opportunity to shut down the failing school bus bureaucracy before it collapsed, protecting taxpayers from more losses and students from chaotic service disruptions.

Instead, lawmakers chose to punt the decision to Dallas County voters in a November election.

It’s looking more and more like Dallas County Schools won’t make it that far.

Erin Anderson

Erin Anderson is a Senior Journalist for Texas Scorecard, reporting on state and local issues, events, and government actions that impact people in communities throughout Texas and the DFW Metroplex. A native Texan, Erin grew up in the Houston area and now lives in Collin County.