Superintendent Elizabeth Fagen said the district is being conservative with the budget, as the district expects a downturn of the economy and the oil industry to negatively impact education funding in the future.
"We are being cautious as we move into the fiscal year [2020-21] budget, because we know that the economy of the state of Texas has been impacted by some decisions that were that were made as far as staying home and closing businesses," she said. "We know that that economic impact may have some sort of impact on education funding in our state."
The district's operating budget revenue, which includes anticipated local, state and federal revenue, is set at $448.35 million, according to the budget presentation. Meanwhile, the district expects to spend $434.48 million in the operating budget this year—leaving about $13.87 million in surplus.
The district's child nutrition and debt service budgets, which combine with the operating budget to create the total budget, do not allow surplus, HISD Chief Financial Officer Mike Seale said.
He said the district is putting the $13.87 million aside to prepare for future funding shortfalls in state budget cuts.
"We had initial requests approaching $20 million for new nonrecurring expenditures that would have fallen into this category," he said. "All of those are valid student-centered, staff-centered requests. In a normal year, we would've narrowed that down to a few million dollars, but as you can see we've gone down to just the bare bones necessities here."
Due to anticipated revenue declines in future budgets, HISD will largely not be offering salary increases to employees.
However, the district is investing $8.3 million to add 88 new teachers, 30 paraprofessionals and 17 staff positions, to name a few. HISD is also investing $925,000 to increase employee benefits and $200,000 to adjust salaries for increased duties during the coronavirus, according to the budget.
Fagen said if the economy ends up performing favorably, the district will provide salary increases to staff members in future budgets.
"Should the economics of Texas turn around and be very favorable, we are committed to absolutely moving forward in future years with significant pay and compensation plans," she said.
The HISD board will vote on the property tax rate in October. However, Seale said he anticipates the maintenance and operations tax rate will drop, resulting in a roughly 3% property tax rate drop.
