Based on preliminary estimates, Cy-Fair ISD officials plan to adopt a $990 million budget next month for the 2019-20 fiscal year, including a $4 million budget deficit.
However, the ultimate budget will depend on changes to the state’s school finance system being discussed by lawmakers as a part of the 86th Legislative Session, which is slated to conclude May 27. The deficit will likely be less than the initial estimate, said Karen Smith, assistant superintendent of business and financial services, at a May 16 board work session.
“This year we’re hoping the deficit will be considerably less than we thought it would be,” she said.
The budget projection comes a year after the district adopted a $12 million deficit budget of $932 million in 2018-19. Projections for 2019-20 include salary increases for all employees, although the extent of those increases could be decided by state lawmakers, who are deliberating state mandated raises for teachers.
Chief Financial Officer Stuart Snow said as the Senate and House work to reach a compromise to school finance legislation in House Bill 3, CFISD’s finance department does not yet know to what extent items such as teacher salary increases and property tax relief will affect the budget. The May 16 preliminary budget presentation to the board was a “worst-case scenario” based on what the Senate has proposed, he said.
“The Senate and House are not worlds apart, but there are some very, very significant differences in the legislation that each have proposed,” Snow said. “So that makes it a very, very difficult process to be able to come to you tonight to provide a preliminary budget not knowing exactly where we’re going to be at the end of this month.”
The Senate’s version of the legislation provides a basic allotment of $5,880 per student, and the House’s version provides $6,030 per student.
The Senate’s version of HB 3 includes a $5,000 raise for all full-time teachers and librarians. Smith said these salary increases would cost CFISD $45 million next year.
Employee health insurance contributions is another major expense of the district—about $28 million annually, according to Snow. However, only 56% of employees are covered by TRS-ActiveCare through the district. Instead of increasing the district’s contribution each year, to be fair to all employees, he said officials typically choose to raise salaries to make up for rising insurance premiums instead.
Smith said the Harris County Appraisal District anticipates a 6.6% increase in taxable value next year. Student enrollment growth—which is projected to increase by 0.5% next year to 117,078 students—was also taken into account when compiling preliminary budget estimates, she said.
Superintendent Mark Henry said he does not believe the district is in trouble financially. Even if the board adopts a deficit budget next month, officials will look for ways to lessen or eliminate that deficit, he said.
“The great thing about Cy-Fair ISD is, whatever [state lawmakers]roll out, we can weather [it],” Henry said. “We have set ourselves up in great financial shape. There are other districts that—you can look around the state—they’re already talking about massive cuts. Our employees don’t have that worry.”
The CFISD board is slated to adopt the 2019-20 budget at its monthly meeting June 27, roughly one month after the Legislature ends. The board will convene at 6 p.m. at the Instructional Support Center, 10300 Jones Road, Houston.