The budget includes $346.6 million in expenses and $339.4 million in revenue, making a shortfall of about $7.2 million. The district balanced the budget with its capital project fund, which includes excess money the district earmarked for use in case of a shortfall, said Paul McLarty, deputy superintendent of business and support services.
A little over $2 million of the shortfall came from the board’s decision to hire 15 additional liaison officers and 15 additional student-support counselors as a response to the Santa Fe, Texas, school shooting in May, McLarty said.
Most of the rest can be chalked up to Hurricane Harvey, he said.
Based on past years, the district expected property tax revenue to increase 7-8 percent this year, but it went up only about 3.25 percent because of the damage Harvey caused, McLarty said.
“We had lower taxable values, which kinda hurt us,” he said. “That put the biggest crunch on our revenues for this year.”
In addition, state revenue funneled to CCISD continued its downward trend, contributing to the deficit, he said.
Still, the district doesn’t expect to end the FY 2018-19 budget with such a large deficit. Each year, the district usually secures an additional $5 million in revenue for which it does not budget, so the deficit could end up being as little as $2 million, but the capital project fund dollars are there just in case, McLarty said.
“We certainly don’t think we’re going to use all of that $7.2 million,” he said.
Despite the shortfall, the district expects the property tax rate to remain at $1.40 per $100 valuation, where it has been for the past few years.
The tax rate includes $1.04 for maintenance and operations, or M&O, and $0.36 for debt service. The district will move two pennies from debt service to M&O to help bring in additional revenue. According to state law, the district can do this without a vote the year after a natural disaster, McLarty said.
McLarty said despite the deficit, it was important to the district to not increase its property tax rate to honor those who suffered financial hardship as a result of Harvey.
“Many of our taxpayers here were flooded,” McLarty said.
The district will finalize the tax rate in September, he said.
Other budget highlights include a 2 percent salary increase for teachers and other staff members and the creation of new 35.5 full-time positions, which will help reduce class sizes.
“We have growth every year, so this is to meet the growth needs,” McLarty said.
Board Member Laura DuPont pointed out that it is unsustainable to continue to raise salaries, which make up the most of the district’s increase in expenses.
McLarty said the state Legislature might help, but that the board might need to find local solutions.
“Unless they do something substantial, then the board here may have to act to take care of ourselves,” he said.