The district’s general fund revenues are projected to grow from $715.6 million in 2018-19 to $773.5 million in the 2019-20 school year, CFO Chris Smith said at the March 18 board of trustees work-study meeting.
This revenue increase assumes property tax revenues grow 6 percent, he said.
“If you drive around any of the major thoroughfares you see businesses going up and houses going up at the pace they have been for many years now,” he said.
Expenditures are expected to total about $752 million—of which $661.9 million will go toward payroll—for the 2019-20 school year, according to Smith's presentation.
“I think the bottom line, if we have to pass a budget right now, it would be OK,” he said. “It would be something that wouldn’t make me do backflips over, but it would be something that I could live with. And I don’t think it would be a deficit, if we could pass it based on current law.”
But with state school finance up for debate this year in the 86th legislative session, KISD’s budget could look different if certain bills are passed, Smith said.
Appropriations bills—House Bill 1 and Senate Bill 1, as passed by the House and Senate, respectively—would provide funding for a 3 percent cost-of-living pay increase for teachers, he said.
“But [state legislators] are wanting to do more,” Smith said.
SB 3 would fund salary increases to teachers and librarians for two years but no increases to nurses, counselors, custodians, front office staff or bus drivers, he said. He added he was unsure whether KISD could sustain these salary increases long term.
HB 3, meanwhile, would drastically change the way schools are funded, Smith said. It would base state funding on the proportion of students in a district who receive free or reduced lunch and do away with the cost of education index, he said.
KISD and many other Houston-area schools have morphed their salary schedule for the past 29 years based on that index, he said. KISD students who receive free or reduced-priced lunches make up about 30 percent of the student population, but other school districts are at about 90 percent, Smith said. If the bill becomes law, KISD would receive roughly $60 million less in state funding each year, he said.
“I think it’s important that districts that have high poverty levels get the funds that they need [be]cause it is more expensive to fund, to educate, children of poverty,” Smith said. “But you can’t put a system in, [and] in 29 years rip [it] out and not make up for it.”
Superintendent Ken Gregorski and other board members expressed their opposition to HB 3, and they urged KISD voters to reach out to their legislators to express this viewpoint.
Smith added that HB 3 will take away state funding for gifted and talented programs and some high school programs as well as add full-day pre-kindergarten for children who qualify.
He also noted that HB 3 will provide $3 billion in tax relief to taxpayers through a 4 cent tax reduction.
“But that’s not going to mean much” Smith said.
He explained that KISD taxpayers have paid over $400 million more than the state in recent years to educate students. Although a $0.04 tax reduction will save property owners about $100 a year in taxes, the cost to educate students continues to rise, and ultimately taxpayers will be responsible for paying that bill, he said.
“[HB 3’s tax relief] is going to be a tin can in the road to stop that truck,” Smith said.
Another bill Smith discussed was SB 995. It would increase the basic allotment to school districts and allow them to spend the money as they please, he said. Smith said he liked this bill but did not think it had gotten any traction.
HB 89 and SB 136, meanwhile, would increase the state’s contribution to public education but would not remove the cost of education index. The bills would provide additional funds for districts with higher percentages of students who receive free or reduced lunch, he said.
“House Bill 89 and Senate Bill 136 go to the [legislative] priorities that this district had in the past," Smith said. "It ties the state’s contribution to an index … that would increase with inflation. That’s what we need to be able to plan and do the right things for teachers and the staff of the district to deliver better instructional quality.”