Without tax increase, $600,000 deficit possible
Georgetown ISD officials are considering calling a tax ratification election, or TRE, this fall to help the district stay afloat due to nearly $5 million in revenue reductions in state and federal funding.
Steve West, GISD interim chief financial officer, said in a budget presentation to the board May 21 that without a TRE, the district could face a deficit of $600,000.
Superintendent Joe Dan Lee said the board could ask voters to approve increasing the district's maintenance and operations property tax from $1.04 per $100 of valuation to $1.08.
The 4 cents would generate about $2.2 million, which would be used to help carry the district through the next legislative session, West said.
If a TRE were called, Lee said the earliest it would be on the ballot would be in September, but the board could wait until May 2013 to gauge what happens in the next legislative session and to give officials more time to educate voters.
"I think that conversation is going to get very serious in June," Lee said. "It's not going to be if we are going out for a TRE—it's when do we want to do it."
The board is set to approve its nearly $79.5 million budget at the June 18 board meeting.
Lee said he was not optimistic that funding from the state would get better and added he feared that the Legislature could reduce funding again in the next session.
"There are only two real options left if there are further budget reductions," GISD board of trustees President Scott Alarcon said. "One is closing schools, and the other is a tax ratification election. And I don't believe that this community will support closing schools."
West said the district can balance the budget with the fund balance, but the $600,000 deficit would cause the balance to go below the target of at least two months' operating expenses.
What is a TRE?
The district's maintenance and operations tax is capped at $1.04. State law allows districts to increase that up to $1.17 with voter approval.
Because of the way Georgetown ISD is classified, the district is subject to recapture, which means after a tax rate of $1.06, the district can also earn additional state revenue, but any additional increases in the rate would cause the district to have to return about 30 percent of the local tax dollars to the state, West said.
"We can actually go out for a total of four pennies, and we would still be able to keep enough monies to be the equivalent and greater than what our taxpayers gave us. At the fifth penny, I get to what I call diminishing returns," Lee said. "I can't see a scenario where we would say, 'We want to tax five additional pennies, and oh, by the way, part of that is going back to Austin.'"
Budget reductions
The district, like many across the state, is facing a second round of reductions from the Legislature.
In a two year period, the board had to cut approximately $7 million from its budget because of funding reductions, Alarcon said.
"In the past, we probably could have said there was fat that we were cutting, but now we are really starting to get closer to the muscle and the bone," Alarcon said in January. "So we have to be very strategic and intentional about the selections that we make."
Lee said the budgetary issues include three problems: state funding reductions, federal entitlement reductions and increased operational costs due to the rising costs of utilities, fuel and supplies.
"[It's] the things it takes to operate a public school," Lee said. "It's really three big issues there, and none of them are getting any better."
The board approved a program change and reduction in force at its February meeting that cut about 70 district positions, including 50 teaching positions.
"We've restructured how we are going to offer some of the programs with less staff, but the real answer is we are going to have to [operate] with the same staff that other school districts have been operating with," Lee said. "We are going to have to change our operational procedures to operate like other schools have been doing for years past."
Two of the programs that were restructured—middle school tennis and elementary physical education, arts and music—drew ire from parents at several board meetings.
Village Elementary School parent Becky Bell said she was concerned that reducing the number of days children participate in P.E. from five to three days a week would affect children's health.
"These decisions are being made without our input," Bell said at the April 16 meeting.
Lee said the change was made because of the reductions in staff and to keep all the elementary schools operating on the same schedule. Although students will only be attending P.E. three times a week, students will still receive the same amount of time in the class each week as when the class was held five days per week, he said.
"We've been so blessed and fortunate that we've been able to staff a little richer than most districts, and now we are cutting back to what they've been doing," Lee said. "I think when we get school started next year, parents are going to be very pleased with what they see. They are going to understand that we are still offering quality academic programs for their kids, and we are still offering all the same extracurricular activities that we have [currently]."
