“This is the largest deficit that LHISD has ever prepared and proposed and will potentially be adopting in the school district’s history that I can see,” LHISD Chief Financial Officer Rosanna Guerrero said referring to the last 15 years.
The deficit comes as the district has received less state funding than anticipated, Guerrero said. She said district has also experienced increased costs due to the district’s growth and rising inflation.
The breakdown
The newly adopted budget projects $84.9 million in revenue and $87.4 million in expenditures in the general fund, resulting in a $2.5 million deficit.
The board also passed a balanced $4 million food service budget and a debt service budget with $41.2 in revenue and $40.3 in expenditures.
General fund revenue
- Property tax collections: 61%
- State funding: 35%
- Federal funding: 1%
- Other local revenue: 3%
- Salaries and benefits: 85%
- Campuses and departments: 15%
In addition to the budget, the board adopted a $0.6692 tax rate per $100 valuation for fiscal year 2023-24, which is a $0.175 reduction from the previous fiscal year and a $0.375 decrease since 2019.
“Our taxpayers have questions or want to understand why their tax bills continue to go up," Guerrero said. "It is the district's responsibility to set the tax rate. What we cannot control is the appraised value."
How we got here
LHISD projects receiving about $4 million less in local property tax revenue in 2023-24 compared to fiscal year 2022-23 in light of the state’s recently passed property tax relief plan.
While the district will receive an increase of $10 million in state revenue to help make up the gap, Guerrero said the district’s budget will be largely impacted by a decrease in funding from the state’s fast growth allotment.
This year, the district would be qualified to receive $7.3 million according to the allotment’s formula as a fast-growth district but will only receive $5.3 million due to a state-set cap.
“That $2 million loss in state funding for the fast growth allotment is what’s really hurting us here,” Guerrero said. “Had we gotten that full allocation, we’d be looking at half a million dollar deficit, but now we’re really looking at a $2.5 million deficit.”
The state’s $6,160 basic allotment per student has also remained unchanged since 2019 despite inflation, Guerrero said. At an Aug. 21 meeting, many board members expressed frustration over not receiving more funding from the state during this year's legislative session.
“A major part of the state budget is education, and they did nothing,” Place 5 Board Member Kathy Major said.
The cost
The district’s general budget has also been impacted by rising costs due to:
- An increase in new employees and pay raises
- Opening of Bar W Elementary for the 2023-24 school year and Tierra Rosa Elementary and Legacy Ranch High School in the 2024-25 school year
- Increases in fuel, utilities and insurance costs due to inflation
- A 61% increase in bus transportation services funding compared to the 2022-23 school year
The general budget was based on projections for 8,630 students at an average daily attendance rate of 94%. Guerrero said any increase to the district’s attendance rate would reduce its budget deficit, as the rate determines state funding,
Texas lawmakers are also expected to reconvene for a special session this fall to address issues in education.
“I do think there is hope in this deficit this year,” School Board President Megan Parsons said about potential action from the state.
