With a looming multimillion-dollar budget shortfall for fiscal year 2024-25, Frisco ISD officials are considering the use of a voter-approval tax rate election to help pay for staff raises.
Teacher raises and identifying saving opportunities were top priorities discussed by Frisco ISD’s board of trustees at a budget workshop Jan. 25. The workshop was the first of many as the district builds its budget for FY 2024-25, Superintendent Mike Waldrip said.
A voter-approval tax rate election is used when a district needs to increase its tax rate, but it requires an election.
FY 2024-25 is the first budget year that has approached close to normal since the COVID-19 pandemic began, Waldrip said.
The Elementary and Secondary School Emergency Relief Fund—also known as ESSER—was distributed by the U.S. Department of Education to address costs incurred during the pandemic and helped the district’s budget in previous fiscal years. In FY 2024-25, the district also cannot depend on additional funding from the state, he said.
“We cannot build a budget on hope,” Waldrip said.
What you need to know
About 95% of a district’s spendable revenue passes through the state’s funding formula, said Kimberly Smith, FISD’s chief finance and strategy officer.
Funding for a district is based on average daily attendance, rather than enrollment, Smith said. The basic allotment for students is $6,160—which has not changed since 2019.
Since FISD is a property-wealthy district, meaning it has high property values, Smith said people assume it should have plenty of money to operate its schools. Property wealth does not have any bearing on the services it provides to students and only determines how much money is sent back to the state through recapture, she said.
“It’s a very common misconception that because we’re in such an affluent community, we should have enough money to fund our schools,” Smith said.
Zooming in
Similar to other districts across Texas, the attendance rate in Frisco ISD has declined since the pandemic began, Smith said. Attendance is down 2%-3% across the state, and Frisco ISD is experiencing the same decline, she said.
Before 2020, the school district had a 96.5% attendance rate, which now sits at 94%-95%, Smith said.
The rate of inflation has also increased 20% since 2019, Smith said. Adjusting the basic allotment based on inflation would result in a $1,150 increase per student—generating roughly $85 million per year in FISD.
Smith went on to explain that adjusting the basic allotment for inflation would have allowed FISD to provide a 3%-4% raise every year since 2019.
By the numbers
A breakdown of the preliminary budget for FY 2024-25 includes:
- $712 million in estimated revenue
- $741 million in expenditures
- $29 million projected shortfall
FISD is not alone in adopting a budget with a shortfall, with other districts adopting shortfalls in FY 2023-24 and expecting shortfalls in FY 2024-25, Smith said. For FY 2023-24, the district adopted a budget with a potential shortfall of $24.4 million.
“This is not a unique situation to Frisco ISD,” Smith said.
Going forward
Budget priorities for FY 2024-25 include:
- Identifying as much savings as possible without impacting student learning, reducing or eliminating student opportunities, or compromising the things that make Frisco ISD unique
- Giving a raise
Smith presented recommendations for the budget to the school board. These are:
- Identify as much savings as possible without impacting instruction or the way FISD operates.
- Adopt a manageable shortfall with the understanding that options for balancing the budget will be explored and implemented if the Legislature does not provide funding in 2025.
- Consider raising the maintenance and operation tax rate by $0.03165 to pay for a raise.
Raising the tax rate would generate roughly $11 million after recapture. If it passes voters, then it would help pay for staff raises without eating further into the district’s reserve funds, Smith said.
