A proposal to fund the operation of Round Rock ISD for fiscal year 2024-25 shows the district is reckoning with a shortfall of about $30 million. To close this gap, district administrators said they are identifying efficiencies in departmental budgets as well as positions, but are working to apply staffing reductions through attrition.

What's happening?

As RRISD began its budget season in February with a preliminary outlook, Chief Financial Officer Dennis Covington said the district would likely be looking at decreasing some positions, reimbursements, stipends and department allocations to reduce its budget for FY 2024-25. In a March 28 budget update, Covington said the district is looking at a potential shortfall of $27 to $29.6 million, based on a few different attendance rate scenarios.

With about 85% of the district's budget allocated to staffing, Superintendent Hafedh Azaiez shared his administrators are working to identify cuts in positions through attrition to avoid laying off any staff.

Attrition, Azaiez said, is the practice of eliminating empty positions and shifting staff where needed to avoid elimination of hired employees.

The details

Each percentage point of the average daily attendance, or ADA, rate accounts for about $3 million of state funding, Covington said. RRISD's attendance rate decreased from 97.2% in the 2020-21 school year to 92% in the 2022-23 school year, but it increased to a tentative 94.2% in the 2023-24 school year, Covington said. This is similar to the attendance rate for 2018-19, he said.

With enrollment for 2024-25 expected to be around the same as the previous school year, he said the district will focus on increasing attendance.

"That is an improvement in our district, as you all know; every percent increase in ADA is about $3 million," he said. "If our trend continues, it will help the district in receiving funding. Also, the enrollment from 2019-2020 to 2023-2024 looks flat, but it actually increased. The number actually did go up by 13 kids."

The big picture

Covington presented a budget proposal for $488.8 million in operating expenses, with $459.75 million in projected revenue.

To close that gap, Covington said the district will have to eliminate some positions, although it is unclear how many will be cut. District administrators will hold meetings with trustees, staff and the community to identify where to make these cuts in the most strategic way, he said.

Recapture for the district has also fluctuated, Covington said. In FY 2022-23, RRISD paid about $115 million back to the state through its "Robin Hood" program, wherein property tax revenue exceeding an amount determined by the state is sent back to be redistributed to schools that receive less property revenue. This number fell to an estimated $11.6 million in FY 2023-24 but is expected to double to about $20 million in FY 2024-25.

The reduction from FY 2022-23 to FY 2023-24 was due to legislation increasing the homestead exemption, Covington said. Due to this reduction in property tax revenue, the district received about $3 million more in state funding for FY 2023-24.

What's next?

The district will hold additional workshops throughout the budgetary process before voting on a final proposal as required by the Texas Education Agency by June 30.