The board of trustees adopted the budget in a 6-1 vote June 19. Trustee Paul Gauthier was the dissenting vote.
The breakdown
The general operating fund, which covers day-to-day district expenses, includes $460.6 million worth of revenues against $481.2 million worth of expenditures and $350,000 of other uses and transfers, resulting in the $20.2 million shortfall.
The debt service budget, which covers funds for bonds and construction projects, will have a balanced budget of $166.1 million.
The child nutrition budget, which covers student breakfast and lunch programs, includes $16.9 million worth of revenues against $19.1 million worth of expenditures, resulting in a $2.1 million shortfall.
Chief Financial Officer Pete Pape said this is "intentional" as it aligns with federal requirements to spend down excess fund balance.
Something to note
House Bill 2, an $8.5 billion public school funding bill, will bring state-mandated pay raises for teachers, a slight increase to the basic allotment, school safety and special education allotments, and more.
However, district officials said the bill changed funding formulas for a hold harmless provision that protected LISD from revenue losses caused by earlier state-mandated reductions to the tax rate.
Pape said said LISD is one of ten school districts which will no longer qualify for this provision due to the changes, resulting in a $10.5 million reduction in this aid.
The district previously received about $23 million, of which about $13 million would have gone toward teacher salaries, $4 million for non-teacher salaries and $5 million to buy-down the shortfall, Pape said.
"District leaders are actively advocating for a resolution, and conversations are ongoing with school finance consultants and legislators, who agree this loss appears to be an unintended consequence of the bill’s design," district officials said in an announcement. "The ultimate authority to interpret and potentially correct the issue lies with the Texas Education Commissioner."
What else?
Under current law and approved with the budget, LISD officials project a property value growth of 5.69% between Travis and Williamson counties. This could decrease to a -0.41% growth under HB2.
Additionally, the budget denotes a tax rate of $1.0671, but this could increase to $1.0869 under HB2. The board is expected to adopt the FY 2025-26 tax rate in August.
Looking ahead
District officials anticipate receiving final HB2 guidance in July.
