The presentation, led by RISD Chief Financial Officer David Pate, forecasted district finances over the next five years. Pate said numbers in the budget are subject to change as more information about funding implications tied to House Bill 3 becomes available.
HB 3, signed into law June 11 by Texas Gov. Greg Abbott, drastically altered the Texas public school funding formula. Under the new law, the district’s property tax revenue, combined with funding from the state, cannot push RISD’s annual revenue past 2.5%, Pate said.
“Revenue is a very dynamic picture, to say the least, as the calculations under House Bill 3 continue to be refined,” Board President and trustee Justin Bono said.
According to Pate's presentation, revenue is projected to decrease by 0.3% from $375.7 million to $374.7 million in school year 2021-21. This is due in part to the growth of property tax rates dipping from 5.32% to 4%, Pate said.
Expenditures in the coming school year are expected to increase by 1.6% from $369.2 million to $374.7 million. The district predicts that its costs will continue to increase each year for the next five years, according to the presentation.
The district's current fund balance is $98.8 million. This is a $6.5 million increase from what was included in the 2019-20 budget, adopted in June. The change is the result of a better understanding of additional revenue the district will receive from the state under HB 3, Pate said. Fund balance is expected to decrease next year to $98.3 million and will continue to decline over the next five years, according to the presentation.
Certain funding bumps provided by HB 3 are included in the budget forecast while others are not, Pate explained. So far, the forecast accounts for per-pupil funding increases related to educating at-risk, early education and dyslexic students, Pate said. The budget does not include increases related to dual language or teacher incentive allotments, among other items.
April 30 is the deadline for the Dallas Central Appraisal District to report estimated certified values to RISD, Pate said. The state will use this number to determine a property tax rate that is compliant with HB 3, Pate said.
The district will hold a public hearing on its school year 2020-21 tax rate and budget June 8. It is also scheduled to adopt the budget on that date. The tax rate will be voted on at the Aug. 17 board meeting, about one month after RISD is supposed to receive finalized certified values from DCAD. Tax bills will be mailed to residents Oct. 1.