But he said he does have one concern.
“If there is a cloud forming in the distant in the otherwise sunny skies of MISD, it might be the budget,” he said at a May 5 board of trustees meeting.
Based on preliminary estimates, Montgomery ISD could face a $2.8 million budget deficit next fiscal year, Lynn said. This would be an improvement from FY 2019-20’s about 4-million deficit.
Having a budget deficit for multiple years can prevent districts from offering competitive salaries and lead to a loss of employees, Lynn said, adding that he believes next year will be a step in the right direction.
“I think this $2.8 million deficit, while it may not exactly where we want to be, I still think it’s a positive take ... that we are not in excess of $4 million like we were in 19-20,” he said.
Lynn outlined preliminary budget numbers and estimates to trustees. The budget will need to be adopted by end of June.
As of April 30, the district’s revenues for this fiscal year total $71,238,385, with nearly $59 million in property taxes and about $9.6 million from the state. The adopted general fund was $72,776,201. For FY 2020-21, the tentative proposed general fund revenue is $75,366,037, with an estimated $61.7 million in property taxes and about $10.9 million from the state.
As for expenses, the district has spent $58,862,757 of its original budgeted $77,162,395 as of April 30.
“The expenditures are trailing that budgeted number, there’s been a lot of change in operations here over the last month and a half so that has definitely helped keep those expenditures down,” Lynn said.
FY 2019-20 expenditures were $77 million, and next year’s estimated expenditures are about $1 million more. Most of the increase comes to added expenses for campus allocations.
“When I sat down and looked at campus budgets, I’ll be honest, I just don’t know how some of them were surviving on what they had,” Lynn said.
Lynn also pointed out that because about 80% of the district’s budget accounts for people, such as salaries and benefits, the district should look for ways tighten its costs here. This does not mean cutting jobs but rather not necessarily filling open positions and carefully planning for raises, he said.
“In order to make a significant impact to that bottom line unfortunately it comes down to people,” he said. “It’s always bad practices to give pay raises out of fund balance... If you’re going to give a pay raise, you need to be able to pay for it out of your operating budget.”
In the last MISD board of trustees meeting on April 29, several board members voiced concern approving the $500 one-time stipend for teachers, which came from the district’s fund balance.
Lynn said the district may have to make tough decisions, depending on what it decides to set for its FY 2020-21 budget goal.
“We may have to be uncomfortable for a little bit. We may not be able to do everything exactly the same as MISD has done it for years and years and years,” he said. “I think it’s important for y’all to start having conversations. If this budget deficit remains at that level, is it acceptable from the board’s perspective, and if it’s not, then very quickly there needs to be direction given to administration on what is an acceptable level so we have time to make changes.”
