Magnolia ISD employees could see 4%-4.5% teacher and staff raises, $500-$1,000 one-time bonuses and a $50 monthly increase in health care contributions in the fiscal year 2019-20 preliminary budget, MISD Assistant Superintendent of Operations Erich Morris said at a July 22 budget workshop. House Bill 3—the school finance reform bill signed into law June 11—made changes in the funding formula, such as removing the cost of education index and shifting districts from using prior-year property values to current-year property values to estimate annual school funding. This caused districts such as MISD to not reap the same benefits as smaller or slower-growing districts, Morris said. "The end product of HB 3 was that each district received varying amounts of funding on a per-student basis," he said during the workshop. "Magnolia ISD is ranked 11th to last in the state of Texas in terms of the effect of HB 3 on our funding per student." However, the FY 2018-19 surplus of $2.3 million, in addition to HB 3 changes, gave MISD $9.1 million in available funds for raises and district improvements in the proposed FY 2019-20 budget, Morris said during the workshop. MISD saw a $270 increase in per-student funding from HB 3 changes, totaling $8,451 per student, he said. "Every time there's an adjustment like this, there are winners and losers," he said during the workshop. "I do feel like we're in a very good position, though. We have a very competitive [compensation increase] package." In the proposed budget, teachers with five or less years of experience as well as administrators and staff will receive 4% salary increases, Morris said during the workshop. In addition, those same teachers and staff, excluding administrators, will receive $750 and $500 one-time bonuses, respectively. Veteran teachers—those with six or more years of experience—will receive 4.5% salary increases and a $1,000 one-time bonus, Morris said. All employees will receive an additional $50 per month in health care contributions, and bonuses would be given in November, he said. "We built an employee retention incentive, or a bonus, based on the board's direction and what we saw with other districts were doing. This gets money in the hands of our employees but also protects the district in the future," Morris said. Bus drivers may also see a pay increase if the proposed budget is approved, Morris said. The district plans to increase bus driver pay from $15 to $17 per hour to help current drivers and improve the driver shortage, he said. "In looking at what other districts are paying and the raises they're giving, we needed to increase the pay," Morris said during the workshop. "We believe that'll make us more attractive and competitive." While the tax rate could not officially be determined until property tax valuations are finalized by the Montgomery Central Appraisal District, Morris said he anticipates a $0.07 decrease in the tax rate, bringing the rate to $1.3095 per $100 valuation. MISD school board members will host a special meeting to approve the FY 2019-20 budget in early August, following the receipt of certified property values, Morris said.