Frisco ISD will have to take a hard look into its finances and make cuts to save money in order to make up for the loss of $30 million in state funding in the 2017-18 school year.

On Aug. 27, voters turned down the district’s proposed 13-cent tax rate increase with about 58 percent of voters against the tax hike.

Results are unofficial until canvassed during the Sept. 6 special meeting.

District officials said the extra money generated by the tax increase would have gone toward hiring new teachers and staff, salary increases and increasing insurance premiums.

More than 18,000 voters showed up to the polls, which is almost double the number of voters who voted in FISD’s last bond election in 2014.

The tax ratification election, or TRE, proposed increasing the district’s maintenance and operations tax rate from $1.04 to $1.17 per $100 property valuation, the highest allowed by state law. Combined with the debt service tax rate of 42 cents, the tax rate increase would have brought the total tax rate to $1.59.

Since the proposal failed, the tax rate rolls back to its previous tax rate of $1.46.

The board of trustees approved a $471.4 million operating budget for the 2016-17 school year that was based on a 13-cent increase. The amount is $42 million more than last year’s budget.

FISD Superintendent Jeremy Lyon said the district will use this time to look at its budget and whatever cuts need to be made will be done in a public process that includes community input.

“We are focused on unifying our community,” Lyon said. “We don’t want to drag this out, but we want to be thorough.”

What now?

District officials and the school board will soon begin a nine-month budget process to look into budgetary cuts that can be made for the 2017-18 school year.

“Immediately we’re going to begin the conversation to develop next year’s budget which will identify the financial hole that we have,” Lyon said. “We need to do the work, adopt a budget next year and move on.”

The district is expected to cut roughly $30 million out of the 2017-18 budget, FISD Chief Financial Officer Kimberly Pickens said. Some of the big cost-saving solutions include delaying the opening of new schools, freezing salaries for all staff and increasing class sizes.

Other solutions include reducing student travel for field trips and academic competition, and eliminating ninth-and 10th-grade classes in the Career and Technical Education Center. To generate revenue, the district could consider a $300 participation fee per activity in fine arts and athletics.

Teachers could also face a longer workday. A possible cost-saving strategy is adding another teaching period for middle school and high school teachers. By adding an extra class to each teacher’s schedule, the district could teach more students with fewer teachers, Pickens said.

Last year the school district added 3,656 students, making it the fastest growing school district in Texas. This year’s enrollment numbers are still being calculated.

“If we’re building schools and we can’t staff them but we’re still adding 3,500 students a year; we’ve got to be able to hire teachers,” she said. “Not being able to hire teachers means our class sizes go up and we only have so much capacity to fill.”

Lyon said while class sizes may increase, FISD would not be abandoning its small-schools model.

Since the tax rate increase was not ratified, the district is planning to dip into the fund balance to finish out this year.

A fund balance is created when a school district has money left over at the end of its fiscal year from either underspending the budget or taking in additional revenue.

Last year’s fund balance has not been officially calculated, but it was projected to be about $95.5 million in spendable funds, according to district’s budget book. The district dips into the fund balance every year to cover the first few months of its fiscal year to make payments before the district receives state funds and property tax revenue.

“We’ll have to use up to $20 million of the 2015-16 fund balance for 2016-17, but we are going to try to tighten the budget up as much as possible so we don’t dip too far into the fund balance,” Pickens said.

The district has no immediate plans to call for another TRE, but the possibility is still there, Pickens said.

However if the district were to call another TRE, it would have to be conducted 30-90 days after the date the tax rate is adopted. If a uniform election date falls within the 30-90 day period, the district must hold the TRE on the uniform election date.

The Texas Legislature

The main reason FISD asked voters for the tax increase was because of the elimination of a special fund known as Additional State Aid for Tax Reduction. This is a fund provided to some school districts with low tax rates as additional money to a district’s operating fund. The ASATR will be eliminated September 2017.

Also earlier this year, the Texas Supreme Court ruled that the state’s school finance system is constitutional, validating the often criticized “recapture” concept.

Recapture, also known as “Robin Hood,” is a system through which property-rich districts, such as FISD, are required by law to send some of their property tax revenue to the state to be redistributed among districts deemed property-poor.

For years, school districts, including FISD, have battled against the state government over the legality of recapture.

Debbie Gillespie, FISD board of trustees member, said the school finance system is complex and unfair to those school districts that have low tax rates and is especially hard for fast-growth districts.

The 85th Texas Legislature convenes on Jan. 10, 2017, and some legislators see public education and school finance as a priority for the upcoming session.

State Sen. Jane Nelson, R-Flower Mound, whose district covers west Frisco, is a former teacher who also served on the State Board of Education for two terms.

“School finance has always been a daunting issue because it relies heavily on local property tax, and the alternative funding options are unpopular,” Nelson said. “There are competing interests and moving parts to the system, so it is also difficult to garner consensus on [a funding formula].”

Nelson said the finance system is too complicated and needs to be streamlined.

“We are preparing for a tight budget next session, but I am working to make sure our schools have the resources they need, while still recognizing that funding alone cannot solve the problems that exist in education,” she said.

During the 84th Texas Legislature session Rep. Jimmie Don Aycock, R-Killeen, proposed a bill that simplified the state’s complicated funding formula for schools and would have infused $3 billion into the school funding system. However, the bill failed before ever making it to the senate.

FISD school board President Anne McCausland said the board continues to be in communication with local legislators to fix the school finance system. However, until some change occurs, she said the district is open to any and all ideas for cost-saving solutions.

“We want a unified community,” she said. “We’re very proud of Frisco ISD and the city of Frisco, and we want to continue to move forward and make our school district and city great.”