"We're on our own right now," Chief Financial Officer Glenn Reed told trustees at a June 4 workshop, calling the proposed budget a "cautious approach."
The change came after work between the district and the teachers union on compensation had reached a workable agreement, according to a letter from Houston Federation of Teachers president Zeph Capo.
"Before the rug was ripped out from under us, over 96% of our members voted to approve the agreement and show our support. This is unprecedented in HISD," Capo wrote in a letter addressed to the trustees.
The proposed budget draws on a slight tax rate decrease set in the fall, though for some properties, taxes could be higher. The average property value in HISD for the 2020-21 budget was projected to be $241,942, compared to $232,235 in 2019-20, resulting in an average tax increase of just over $100, according to public notices by the district.
Tax rates are set in September or October each year for the following budget year.
The step-increase raises will apply to teachers, librarians, nurses and other similarly-ranked positions as well as police officers. The budget's projected fund balance is over $510 million, giving the district about three months of operating expenditures in the event of a sudden downturn, Reed said.
Deficits could occur in 2021-22, he said, if property values decrease in 2020 as the economy recovers from the COVID-19 outbreak.
Interim Superintendent Grenita Lathan cautioned against trustees asking for bigger raises or other significant changes to the budget.
"Any changes will impact us for 2021 and for years to come," she said, warning a larger pay raise this year could mean layoffs in future years.
Based on information shared with trustees, the 2021-22 budget will assume trustees approve a "golden penny" tax increase this fall, the last time the district can seek such an increase without a tax ratification election.
A public hearing for the budget is scheduled for 4:30 p.m. June 11. Residents must register to speak in advance by 9:30 a.m. that morning.