The Tomball ISD school board unanimously approved and adopted a $98.7 million balanced budget for the 2014-15 academic year, which grants a 3 percent raise to employees across the board and maintains the current tax rate.
Jim Ross, chief financial officer for Tomball ISD, said the $98.7 million budget, which was approved at the board's July 15 meeting, is an increase of 7.19 percent from last year's total. The significant increase in the budget in 2014-15 is a result of expenditures needed for increases in pay and minimum wage, starting teacher salaries, new staff positions, insurance premiums and utility costs.
"Adjustments to payroll providing a $50,000 starting teacher salary, a minimum wage of $10, a 3 percent salary increase and the addition of new staff account for 92.5 percent of the budget increase," Ross said. "Of the payroll dollars constituting this increase, 75 percent were for current teacher's salaries or the addition of new teaching staff due to growth. The remaining 7.5 percent was due to increases in property/casualty insurance premiums and utility costs associated with adding three new schools."
Ross said school board members announced a proposal in June to allocate a 3 percent salary raise across the board and a minimum hourly wage increase to $10 per hour for district employees. He said the board granted a 3 percent salary increase to employees last year as well. The board also approved increasing starting teacher salaries to $50,000, which is one of the highest in the region, and the hiring of an additional 42 teachers in the upcoming school year to accommodate enrollment growth, he said.
"The job market in the Houston, Tomball and Magnolia areas is very strong," Ross said. "Tomball ISD must maintain a strong competitive position to maintain the quality of staff we are accustomed to employing."
Ross said the district benefitted from increased attendance due to enrollment growth and improved attendance of existing enrollment, which led to increased revenues and an ability to put forward a balanced budget despite the increase in expenditures.
Despite approving a balanced budget, Ross said the district will have to amend the 2014-15 budget to a deficit budget in the near future. The Governmental Accounting Standards Board, which sets accounting policies and procedures for all governmental entities in the U.S., will require the Teacher Retirement System to use a specific methodology to calculate the unfunded pension liability of the pension plan for the fiscal year ending August 2014. The GASB will also require government entities with pension plans to record as a long-term liability the unfunded pension liability, Ross said.
"Texas public school districts are now considered to be contributing partners with the state of Texas to the Teacher Retirement System pension plan," Ross said. "On the district balance sheet an increase in liabilities is directly offset with a decrease in fund balance."
Ross said there will be a liability share assessed against the district before the end of the 2014-15 fiscal year, but what that amount will be is unknown at this time. Once determined, the budget will be amended to decrease the fund balance to accommodate for the increase in liability. The new standards could make the district appear financially weaker, he said, despite it not costing the district any money. It does, however, prevent the district from spending it.
"We will have to amend the budget soon and we will close the year with a deficit as a result of these new standards," Ross said.
Tomball ISD's tax rate for the 2014-15 school year will hold steady at $1.36, and has remained at that level for seven years because of careful planning and a projected 5.59 percent increase in district enrollment, Ross said.
"It's really a big deal that there has been no hike in the tax rate in the district for the past seven years, especially when the state doesn't make it easy on the district," said Michael Pratt, vice president of the Tomball ISD school board. "Seven years in a row is very impressive."
