During a meeting Aug. 21, the Carroll ISD board of trustees approved the fiscal year 2023-24 budget and tax rate as well as a plan to potentially save the district millions in future debt. For the third year in a row, tax rates have dropped for the district with the overall tax rate being 17.75% lower than FY 2022-23.

Zooming In

According to the Texas Education Agency, a district's property tax rate consists of a maintenance and operations tax rate and, if applicable, an interest and sinking tax rate. The M&O tax rate provides funds for maintenance and operations. The interest and sinking, or I&S, tax rate provides funds for payments on the debt that finances the district's facilities. The adopted tax rate went down from $1.2188 per $100 valuation in FY 2022-23 to $1.0025. The M&O rate saw a 24.34% decrease, going from $0.8888 in FY 2022-23 to $0.6725. The I&S tax rate remains the same as FY 2021-22 and FY 2022-23 at $0.33.

Zooming out

The total general budget is about $118.01 million, lower than the previous year’s budget, which was about $168.33 million. The FY 2023-24 budget includes $48 million for instruction costs and employment, $11 million for maintenance and operations, and $18 million for recapture payments. Staffing is roughly 83% of the budget.

How we got here

At the beginning of the 2023 legislative session, school district leaders had hoped for an increase to the basic allotment, Assistant Superintendent for Financial Services David Johnson said. He added it would take an increase of about $1,000, or 14.5%, to account for the inflation since 2019. The basic allotment was not increased during the 88th legislative session, and CISD continues to be the fourth lowest-funded school district in the state, according to board documents.

The lack of allotment increase coupled with rising costs creates concern for the district’s financial future, Johnson said.

“The expectation for all districts across the state is that our legislators realize the aforementioned and will address our increased costs by raising the basic allotment,” Johnson said.

The background

The majority of the cuts in this budget cycle was staff reductions, Johnson told trustees April 17. The budget decrease for staffing efficiencies was $2.9 million, though Johnson said no staff lost their jobs as a result of this decision. In turn, the district expects to utilize more of the budget for technology and utilities.

Also of note

Additionally, the board of trustees approved a debt defeasance plan, which could save the district and taxpayers $9.2 million in future interest costs. This plan involves leaving the tax rate the same and retiring debt earlier than expected. The district saved $1.9 million in interest in FY 2022-23 from this process. Johnson projected as the district continues with this plan, the district will be largely debt free in the next six years, though he plans to bring a more in-depth future analysis during a future board meeting.