Operating costs are estimated to increase for the upcoming fiscal year. About $1.8 million is due to the cost of utilities for two new schools, another $2 million is for teacher salaries and increased staff for the new schools, and the remaining $4 million in costs is for the recapture payments owed back to the state because MISD is considered a property-wealthy district.
To mitigate the budget gap, staff changed the district's fiscal year by two months, creating a 10-month fiscal year for 2018-19. On a regular 12-month fiscal year, the budget shortfall could have been as much as $9 million.
"At the end of the day, we do still have to pay the recapture," board Vice President Jim Dossey said. "And if we have this problem next year, at some point we have to do something to pay it."
In terms of revenue coming in, enrollment is up by 580 students districtwide, the largest single growth the district has ever seen.
"Based on the circumstances being we opened a second high school, it's a big hit to the budget and we've known since 2015 this was the year there was going to be a large escalation in the budget," Superintendent Beau Rees said. "We expect with the trends to see another large growth this year [in enrollment] and it didn't make sense from an instructional management aspect to go reduce staff while opening a high school."
About 80 percent of the total budget is staff salaries.
"We have basically the next 10 months to begin putting together contingency plans to make sure we have a balanced budget for FY 2019-20," Rees said. "At this point, it's all going to be decisions about how do we reduce people. In a year, we experienced the greatest growth we ever had in the history of the district, and we're trending to do the same this year [with] opening a second high school. We feel good about the budget we're able to present and made it work by making it a 10-month budget and changing the fiscal year. That's it in a nutshell."
District employees plan to look at tax increases and present it to the board in October and November, after the enrollment count is finalized in October; however, Rees said officials aren't hopeful about being able to pass a tax increase since Klein ISD's failed tax ratification left them $30 million short.
The board set the public hearing date for the budget and tax proposal for Aug. 21.
In other news Tuesday, the board also:
- approved $270,000 for a new acoustical shell system in the auditorium at Montgomery High School
- approved $809,302 for a library makerspace renovation at Montgomery High School
