This is according to a preliminary fiscal year 2021-22 budget overview held during a Jan. 26 board meeting, in which EISD officials discussed a projected budget shortfall upward of $600,000 for next year.
If not for the national health crisis, the district may have concluded the 2020-21 school year with a budget surplus of about $900,000, according to EISD Chief Financial Officer Chris Scott.
EISD is anticipating closing this year’s budget with a $2.7 million shortfall, which according to Scott was caused by significant revenue declines.
The child nutrition fund is facing a $1.5 million loss due to fewer students on campus, and a large revenue cut was caused by a lack of facility rentals both last school year and in 2020, Scott said.
“Typically, our buildings are used all the time, every weekend,” Scott said. “Our revenue is taking a big hit there, and ultimately that impacts the bottom line."
Ideally, the district would offset the $2.7 million shortfall in the next fiscal year, according to Scott. However, Scott acknowledged actions such as staff reductions are difficult decisions for district leaders to make.
“We were looking at coming in with a $600,000 deficit [in 2021-22] after having a surplus in this year, and now that is not looking like it's going to be the case,” Scott said.
Since March, EISD and surrounding districts have also experienced dips in enrollment due to the pandemic. While precise numbers will not be available until
October, EISD is projecting about 8,152 students next school year compared to 7,970 for the 2020-21 school year.
“We’re really hopeful that as the pandemic comes under control that those enrollment rates will come back up,” Scott said.
Other 2021-22 budget projections include a tax rate of around $1.0853 per $100 of valuation, as well as a regional tax base growth of about 6.1%.
Budget predictions could be influenced by the 87th Texas Legislature, which convened Jan. 12. However, Scott said he and other educational leaders are not expecting additional relief for public school districts.
Furthermore, Texas’ funding system established through House Bill 3 has not provided financial support for EISD in the way it has for other districts, according to EISD officials.
Under HB 3, EISD is one of the largest contributors to the state’s recapture program, which requires school districts with a value per student higher than $6,030 to contribute payments based on their taxable value, according to the Texas Education Agency. The money is collected by Texas’ education fund and redistributed to districts below that threshold.
EISD’s contributions are approaching about $1.5 billion, according to Scott, who added that amounts to about $12,460 per student annually.
Decisions are still left unmade as the district works to compensate for these budget challenges. Staffing rates and compensation will be voted upon by the board in either May or June; however, the preliminary budget assumed a possible 2% compensation increase.
“The board’s primary influence is on the expense side while the primary budget volatility is on the revenue side,” Scott said.