The approved budget includes a nearly $13.1 million shortfall in the general operating fund, a $1.31 million shortfall in the child nutrition fund, and a balanced budget in the debt service fund.
The breakdown
The district’s general operating fund budget has $448.5 million in revenues and $460.36 million in expenditures. Additionally, $1.23 million was transferred to other district funds, resulting in a $13.09 million shortfall.
The FY 2024-25 shortfall is more than twice as large as the $6.5 million shortfall adopted by the board for FY 2023-24, which has since been reduced to $5.27 million, according to district documents.
The FY 2024-25 shortfall falls within the district’s budget parameter—set at 3% of revenues—by about $18,000.
About 85% of the general operating budget is reserved for payroll. This includes a 2.5% compensation increase for all staff totaling $8.13 million and 91 new net positions totaling $6.44 million.
The budget includes 12 new positions for the district’s newly launched police department as well as additional prekindergarten, Early College High School and special education positions.
The district will pay almost $11.5 million in local property taxes back to the state through a process known as recapture.
Also of note
LISD is projected to adopt a tax rate of $1.0869 per $100 valuation—a 28% decrease since FY 2018-19. In 2023, Texas lawmakers passed Senate Bill 2, which further compresses school districts' tax rates.
Next fiscal year, a household with an average market value of $628,165 will pay $4,635 in property taxes to LISD, which is $109 less than in FY 2023-24, according to district documents.
How we got here
The $13.09 million shortfall comes as the district has faced several cuts to state and federal funding plus new state mandates:
- A $7 million reduction in Medicaid reimbursements for special education students
- A $5.4 million reduction in the Instructional Materials and Technology Allotment funding
- A $1.8 million reduction in Title 1 funding
- The loss of a grant for autism services, and Elementary and Secondary School Emergency Relief grant funds
- $2 million in startup costs and $4.8 million in yearly expenses to create a police department under House Bill 3
Additionally, the district has seen an increase in students transferring out of the district to attend charter schools over the past decade as its enrollment growth slows.
In January, the district initially projected a $20 million budget shortfall, which was then reduced to $15 million. The district further reduced the shortfall by making $900,000 in cuts from department budgets and removing 20 bus driver positions from the budget that were not needed, Chief Financial Officer Pete Pape said.
