Among the districts in Texas, GCISD ranks fifth in the amount of taxpayer dollars sent to the state, and CISD ranks 20th, according to Texas Education Agency data.
GCISD approved its budget in June, and CISD approved its budget Aug. 27. Both school districts have adopted or have proposed a deficit budget but plan to use healthy savings accounts and a strategy of conservative revenue estimates to help cover costs.
“It just takes thinking outside of the box,” GCISD Chief Financial Officer DaiAnn Mooney said. “We know how much money we have, so we think, ‘How can we make this work and how can we do the best we can with what we have?’ That’s really all you can do.”
Paying for people
Personnel expenses contribute to 87 percent of the GCISD maintenance and operations budget. Of this amount, 69 percent is for instructional personnel.
This year, GCISD will include a 2.5 percent increase of midpoint pay for all employees.
CISD has increased employee pay for the last six years with a 3 percent salary increase for all its employees each year. This is included in the budget this year, as well as adding five new staffing positions to keep up with the increasing student population.
As of press time, CISD projected 8,457 students for this school year, an increase of 77 students from 2017-18.
These extra CISD students result in an increase in funding from the state of about $800,000. Scott Wrehe, CISD assistant superintendent for financial services, said this will nearly cover the cost of the 3 percent salary increase.
Personnel expenses contribute to just under 84 percent of the CISD maintenance and operations budget.
Mooney said it is crucial for GCISD to provide these wage raises to staff and faculty to help keep up with the cost of living, and Wrehe added it also helps keep districts competitive.
“It is very important to continue to provide raises to employees for all that they do for our students and to ensure that our salaries are competitive with surrounding districts so we can continue to hire quality staff,” Wrehe said.
The recapture issue
In this upcoming fiscal year, GCISD will be required to turn over $54 million to the state in recapture payments—more than ever before.
CISD will have to surrender more than $32 million, also a record amount for the district.
The state’s recapture policy requires property-wealthy districts with low enrollment growth, like GCISD and CISD, to send some of their property tax revenues designated for maintenance and operations to the Texas Education Agency for redistribution to poorer districts.
Mooney said GCISD was part of a lawsuit several years ago that claimed these payments are a statewide property tax, since the state depends so heavily on property taxes to fund school districts.
She said while the district won with that argument in the lower courts, the Texas Supreme Court deemed the finance system constitutional, albeit broken.
While districts have been able to increase the amount of money designated for administration and classroom expenses in recent years due to swelling North Texas property appraisal values, recapture payments to the state sometimes outpace that revenue, Mooney said. This was the case for GCISD last fiscal year, she said.
Wrehe said property value increases in CISD were enough to offset the increase in recapture payments this year as well, but that this has not always been the case.
“The taxpayers need to understand that even though they are writing a larger check to the school district, it does not mean all the money is staying within the district,” Mooney said. “The state benefits from the increases in property values.”
According to GCISD’s website, the increased property values have several negative impacts to property-wealthy districts.
First, as property tax bills rise, the additional monies are sent to the state. Second, as property values increase, funding from the state decreases. Wrehe said in 2008 the state funded 25 percent of the district’s revenue. This past year the district received only 8 percent of its revenue from the state.
Finally, these districts are unable to lower the maintenance and operations tax rate, as the decreased tax revenues combined with the reduced state funding would affect a district’s ability to perform its job, the GCISD website said.
Hope for the future
Mooney said there is a hope that a Texas commission’s work this year will lead to a revamp to parts of the state’s funding formula to rein in future recapture payments.
Members leading working groups of this endeavor, called the Texas Commission on Public School Finance, include Todd Williams, a Dallas-based education research firm executive.
“It’s clear that school finance is broken,” Williams said. “It’s incredibly complicated; it’s not focused as much as we would like on outcomes and goals as it is on just what money we have available every two years and how we are going to allocate it for the rich and the poor districts.”
He said the school finance commission has been hearing reports from independent tax research groups and testimonies from Texas school districts, and that the commission is preparing to present its recommendation to the Texas Legislature at the beginning of 2019.
As part of Williams’s position as chairman of this outcomes group, his priorities include setting measurable goals to better inform the commission where tax dollars would be best spent.
Some of the goals Williams said he is particularly interested in pursuing include having 60 percent of Texas students complete postsecondary education by 2030 and enticing more graduates to pursue education-
Williams also said he expects proposals about recapture are going to be brought to the table in the commission’s discussions.
“When we’ve got very large districts that serve primarily poor kids, such as Dallas and Houston, having to now start to write checks back into the system, I think both economically and politically, that’s something that has to be addressed,” Williams said.
In the meantime, he said local school districts continue to provide creative solutions to provide students with a quality education while battling the issues of recapture payments.
“We are blessed to have the property we do, but what I feel is wrong is that the state doesn’t put in their share,” Mooney said. “Every student in Texas deserves a great public education, so I’m not against equity; I’m just against the state not putting in their share and relying heavily on the few
Additional reporting by Gavin Pugh.
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