A proposal to improve safety at Hays CISD elementary schools could force the district to increase its ad valorem rate to generate enough revenue.
The item was part of a presentation on the district’s Fiscal Year (FY) 2018-19 budget, which could have a $6 million deficit, if approved by the board of trustees. Officials said increasing the tax rate has not yet been included in the preliminary budget and is only a point of discussion at this time.
The safety proposal, presented to the board during a budget workshop April 27, would require a tax ratification election to move the maintenance and operations (M&O) rate from $1.04 to $1.06. An election would be necessary, as Hays CISD has reached an M&O rate of $1.04 per $100 valuation, which is the maximum amount districts can tax per state law. If approved, the district’s overall ad valorem rate would increase to $1.56 per $100 valuation.
A school district’s tax rate is comprised of the M&O, which funds maintenance and district operations, and the Interest and Sinking (I&S) rate, which pays down debt. According to Hays CISD officials, the district’s I&S rate of $.50 will remain unchanged.
By increasing the M&O rate, the district is expected to generate an additional $2.5 million per year for the hiring of new school resource officers (SRO), behavioral specialists and aides at elementary campuses.
At this time, however, improving services at elementary schools is not part of the district’s projected $168 million in expenditures for FY 2019. Hays CISD is expecting roughly $161 million in revenue. As a result of the deficit, Hays CISD is eyeing the possibility of drawing from its reserve account, which is used for one-time expenses, to cover the overage.
While the district has adopted budget deficits for the last decade, the roughly $7 million overage would be its largest.
District revenue projections show an increase from FY 2017-18 due to a rise in taxable appraised property values, but state allocated funding was reduced by roughly $2.4 million.
“We strive for a balanced budget, but when property values go up, then the state funding goes down so it makes it virtually impossible,” Hays CISD Chief Financial Officer Annette Folmar said. “Even though we’re getting more kids, the state funding is going down by more than two million (dollars), and so our local taxpayers are going to be paying more of this burden.”
The district is expected to have 264 more students in 2018 and is projected to receive another 430 students in 2019.
District officials used a new zero-based budgeting method to review expenditures, which gave the board a better understanding of the district’s operating costs across 53 departments.
By looking at necessary expenditures and reallocating resources, the district was able to propose a $2.7 million cut in expenses. The cuts included consolidation of duties, redesigning leadership organization and cutting central administration services.
Hays CISD is also looking at several key expenses for FY 2018-19, including a proposed three percent pay increase for all district employees, which would amount to $5.1 million. According to the district, recruitment and retention of high-quality employees is a priority.
Other additions to the budget include budget allocations for the opening of Uhland Elementary and Johnson High, additional resources for the special education department, funding for the Fuentes Elementary fine arts academy initiative, and adding additional full-time employees.
This framework of the budget will be discussed at future school board meetings and a final annual budget will be adopted in August.
