Liberty Hill ISD has reduced its projected budget shortfall for this fiscal year and is nearing a balanced budget for FY 2025-26.
The update comes after the district has applied millions of dollars in current and planned budget cuts amid growing financial concerns.
Going forward, the district is seeking to raise its fund balance, increase employee pay, and reinstate positions that were cut if state lawmakers approve additional school funding this year, Chief Financial Officer Rosanna Guerrero said at a May 5 special meeting.
Current situation
In November, the district adopted a revised budget with a $7.5 million shortfall for FY 2024-25 after voters failed to approve a nearly $0.06 increase to the district’s tax rate. LHISD is now projecting a $2.1 million shortfall for this fiscal year after reducing its deficit through:
- Land and infrastructure reimbursements
- Freezing positions for central administration and departments
- Reductions in campus and department budgets
- Limiting travel for professional development
- An increased average daily attendance of 95%
After realizing a $2.1 million shortfall, the district's fund balance is expected to drop to $13 million, which is $12 million short of LHISD’s goal, Guerrero said.
The district would need to have at least $25 million in its fund balance to cover three months of their operating expenses. Dropping below that amount can negatively impact the district’s credit rating for bond sales, Guerrero said.
“It's very, very bad,” Guerrero said. “One of the things they recommended on how to improve our credit is to add back to fund balance. We've got to get back to that three-month operating expenditure.”
Guerrero said the district is already feeling the effects of budget reductions, including field trips being cancelled, with more challenges expected for next school year.
“Getting the deficit down as low as it was is incredible,” school board President Megan Parsons said. “I know it's coming at a cost and it's going to be tough for everybody.”
Looking ahead
For FY 2025-26, the district is close to adopting a balanced budget with a nearly $48,500 budget shortfall. In March, the board of trustees approved $6.4 million in budget cuts, including 78 staff positions.
Additionally, the district is expecting a $2 million increase in revenue due to property value growth and higher student attendance. Property values in the area are estimated to have increased by 16%, which is 5% higher than what the district anticipated, Guerrero said.
Other changes to the budget include additional special education positions and costs related to opting into the Teacher Incentive Allotment next school year. The state program awards additional compensation to high-performing teachers.
Following the adoption of a hybrid calendar, the district will see increased expenses to provide free child care for staff on Fridays through its Panther Care program. The district may also assume costs from its new maintenance and operations facility as well as portables for students.
Also of note
