Citing a lack of movement to modify education funding formulas during the 85th Texas Legislature, Round Rock ISD Chief Financial Officer Randy Staats told district trustees Thursday that RRISD can expect a budget shortfall of $14.85 million for fiscal year 2017-18.
Staats said it will be the fourth year in a row that RRISD will run a deficit. The projected shortfall is about 3.5 percent of the district’s total budget.
“That ought to be telling to our legislators and the state that something is not working in the formulas,” he said during a presentation to trustees.
For the first time since 2008-09, RRISD will also pay money to the state next year through Texas’ “Robin Hood” law, a system also known as recapture that requires school districts deemed “property wealthy” to send a portion of their annual tax revenues to the state to bolster districts deemed “property poor.”
RRISD will pay $9.7 million in FY 2017-18 to the state under the law, according to Staats.
Trustees are expected to vote on adopting the FY 2017-18 budget June 20, following a public hearing regarding the district’s proposed tax rate for the upcoming year.
RRISD has proposed to lower its tax rate in FY 2017-18 to $1.3049 per $100 in property valuation compared to $1.3325 per $100 in valuation in FY 2016-17. However, due to increasing property values an average RRISD homeowner with a home valued at $326,620 is projected to pay an additional $240.80 in taxes to RRISD next year, according to the district.
RRISD projections show the district expects to collect $341.2 million in property taxes in FY 2017-18, which would be an increase of $29.1 million from collections during the previous year.
But with RRISD’s recapture payment and a decrease of more than $18 million in state money to the district in FY 2017-18 compared to the previous year, the district projects it will have about $1.2 million in additional revenue next year. That would be an increase of 0.3 percent compared to the previous year, according to RRISD’s projections.
With tax collections combined with other funding sources, RRISD's estimates show $398.92 million in total revenue in FY 2017-18.
The district anticipates $413.77 million in expenditures next year, which would be an increase of more than $25 million compared to FY 2016-17. The increase is needed to make next year’s recapture payment, cover teacher retirement benefits, account for district growth and maintain competitive salaries, according to the district.