McKinney ISD officials are in the process of creating the budget for fiscal year 2024-25 while navigating changes for FY 2023-24’s budget.

An update on the district's budget process was given by Chief Financial Officer Marlene Harbeson during a Feb. 26 board meeting.

Budget explained

Funding for a school district is based on average daily attendance. The basic allotment for schools is $6,160 per student, which has not changed since 2019. This needs to be taken into account when discussing school budgets, Harbeson said.

“Basic funding has not increased since 2019,” she said. “The basic allotment is still $6,160 in spite of record inflation and a $33 billion surplus at the state level.”

Sorting out details

The adopted 2023-24 budget included a general operating fund with:
  • $256.05 million in revenue
  • $275.75 million in expenditures
  • $19.69 million shortfall
The district anticipated to receive $4.4 million in reimbursements from the state's School Health and Related Services program, also known as SHARS. The program allows school districts to be reimbursed for providing Medicaid health-related services to special education students, such as speech language, physical and occupational therapy, according to the Texas Education Agency.

Reimbursements through the program are stopped due to a federal audit that has blocked Texas school districts from receiving those funds.

MISD officials have reduced the expected amount of revenue from $4.4 million to $250,000 because that is all the district has received before the program was paused, Harbeson said.

“To say that this is a moving target couldn’t be more of an understatement,” she said.

The current school year’s final budget will also be affected by a decrease in local property tax revenue from homestead exemptions and compressing the district’s tax rate, according to Harbeson’s presentation.

The maintenance and operations tax rate, which covers the district’s operational expenses such as payroll, was reduced by about $0.18 to $0.7575 per $100 valuation for FY 2023-24.

Looking forward

A breakdown of the preliminary budget for FY 2024-25 includes:
  • $244.06 million in estimated revenue
  • $261.21 million in expenditures
  • $17.15 million projected shortfall
The budget process for the 2024-25 fiscal year is ongoing. District officials will attempt to give a conservative view before the budget is finalized later this year, Harbeson said.

“We’re still doing a great job on staying fiscally prudent,” she said.