Leaders concerned by shortfall projections

Grapevine-Colleyville ISD administrators said they have found enough room in district finances to award employee raises that include $1,250 for teachers in the district's roughly $145 million budget approved in June, but officials are cautious about the future.

Without changes to the state's funding method for schools, GCISD officials said the district could face a series of tough decisions.

Deficit-driven cuts could blunt instructional quality, program offerings and the district's impact in the area even as local tax contributions to school operations rise in conjunction with property values, district leaders said.

Raises in a shortfall

The new raises follow pay increases that were written into the district's 2013–14 budget after the 2013 Legislature, GCISD Chief Financial Officer DaiAnn Mooney said. This year's pay hike represents a 2 percent increase to salaries.

Despite the fact that the district has adopted deficit budgets at the outset of the past 10 school years, tight expenditure controls have kept the district running in the black until the last two years.

"Due to this [policy], the fund balance is at a level that can support cost-of-living adjustments given to our employees in order to keep up with the market and retain quality staff," Mooney said.

GCISD Director of Communications Megan Overman said justifying those raises to the public has hinged on helping taxpayers understand the nature of the competition for teachers.

"We could go for years without offering raises, and in doing so you're going to diminish the quality of your staff overall because they're going to have other opportunities better suited for them in other places," Overman said. "We're by no means at the top of the charts in our area in terms of what we pay our teachers. We're kind of in the middle of the pack."

Where the trouble began

The 2011 Legislature left big monetary challenges for GCISD—to the tune of about $14.1 million less in state funding for the 2011–13 biennium—that were only somewhat improved in 2013 with the restoration of about $3.1 million in state funding, Mooney said.

With less state support, as well as the "recapture" rule that requires "property-rich" districts to pay into funds that are redistributed to poorer districts, GCISD continues to deal with a budget in the red. Projections put the district below $40 million in reserves by the end of the 2014–15 budget year, and with no changes, below a crucial $20 million level by the end of the 2016–17 budget year. Mooney said $20 million represents about 20 percent of the district's annual operating costs, which is a state-recommended minimum level of assets a district should keep.

The district has run true deficits for the last two years, with spending outpacing revenue at the end of the budget cycle. If reserves run too lean and cuts become necessary, jobs and programs would be on the line. District officials aim to keep operations as unchanged as they can and keep salaries competitive until finances get tighter, Overman said.

"Let's relate it to the home budget," Overman said. "If you spend more than you bring in, at some point there will be a break. You're not going to be able to sustain that. Fortunately, we have the ability to sustain that for a while due to the conservative budgeting that we've had. Right now we're trying to get as much bang for the buck as we can and let it last as long as possible until we end up having to make decisions that impact students and programs."

Planning ahead

District officials are hoping for resolution of ongoing state-level school funding litigation soon and more education money to be brought to the table during the 2015 Legislature. Cutting district spending before those decisions are made could be unnecessary if state support increases. Advance contingency planning for further cuts is not feasible, either, Overman said.

"As information comes on those unknowns, we'll be able to narrow down a plan," Overman said. "We won't be waiting until the last minute."

Mooney and Overman said some finance planning could also begin taking shape as soon as the November elections. Depending on who wins statewide offices—including the new governor—the political landscape headed into the 2015 Legislature could foreshadow more cuts, officials said.

What changes come from developments in statewide school-funding debates will be a matter to address with the community as well, Mooney said. The Stakeholders Economic Action Team originally formed to handle the fallout from the 2011 Legislature has already been retooled as SEAT 2.0. Overman said the committee is poised to get involved again if and when it must in order to help administrators make decisions on what programs and people would be under evaluation for possible cuts.

GCISD's advantage

Mooney said the district benefits from its higher property values and wealth in one way: repayment of its bond debts. Appraisals continue climbing in the latest round of assessments by the Tarrant Appraisal District, and GCISD expects to see an average increase of $364 in taxes on the average market value home. GCISD anticipates about $1.05 million in additional local revenues to help pay debts in 2014-15, with that fund balance projected to increase.