Dec. 3, 2018 budget workshop
HISD administrators begin 2019-2020 budget discussions
The HISD Board of Trustees met Monday to hear the first report from district administrators on expectations for the 2019-2020 fiscal year budget.
District officials are projecting an initial $76 million deficit, due in large part to expected declining enrollment and a modest increase in property values – both of which cause the district’s recapture payment to increase.
According to Interim Superintendent Grenita Lathan, any cuts to the budget to address the deficit will be done in a way that tries to minimize impact to instruction. That task is made harder given the cuts made to operational areas last year.
Monday’s session was the first of seven scheduled budget workshops. The board heard the initial budget projections, which include no salary increases for district staff, as well as a projected recapture payment of $312.5 million, up about $40 million from 2018-2019’s recapture payment. Budget projections are based on assumptions, including an estimated 2% property tax revenue increase, as well as an expected enrollment decline of 1,500 students.
District administration did indicate the assumptions could change over time based on trends in student enrollment in the second semester as well as any information the appraisal district is willing to share regarding property values.
During Monday’s meeting, district leaders provided information on ways to increase district revenue for 2019-2020, including holding a tax-ratification election (TRE). A TRE is a special election held to ratify an increase in the maintenance and operations (M&O) tax rate. If approved, the TRE could increase the M&O tax rate to $1.17 and could generate up to $130 million for the district, thereby eliminating the initial projected deficit of $76 million and providing approximately $54 million in additional revenue.
The TRE was presented to the board not as a recommendation but as a consideration. Administrators at this time recommend building a budget around the current M&O tax rate, even if the board decides to move forward with a TRE.
“As a team of 10, I want us to look at the big picture,” Lathan told the board. “We are going to have be creative as we go through, really, the next 10 years, unless we get some relief from Austin.”