The Texas Legislature appropriated $1.5 billion in additional funding for public education this session, providing an estimated additional $21 million to Cy-Fair ISD for the next two years.

After the district finalizes projected revenue and expenditures and the amount of money it will receive from the state, the board of trustees expects to adopt a balanced $875 million budget June 25.

However some of the additional money will be negated by increased contributions to the state’s Teacher Retirement System fund and an increase in the state’s mandated homestead exemption.

“I think even though the Legislature did provide additional funding for public schools, there’s still a lot more work to be done,” CFISD CFO Stuart Snow said. “I suspect they’re waiting for a Supreme Court ruling on the school finance lawsuit, but the state did end up with quite a bit of unspent revenue in [the] budget.”

New legislation

Because of legislation passed during the 2013 legislative session, CFISD is required to contribute an extra $10 million annually to the TRS fund, which will cut nearly half of the additional $21 million expected from the state, Snow said.

The district is also calculating the effects of an increase to the state’s mandated homestead exemption, or a reduction in school district taxes. The Legislature approved Senate Bill 1 this session, which includes provisions for property tax relief for homeowners because of rising home values across the state and in Harris County.

The legislation calls for an increase in the homestead exemption from $15,000 to $25,000, but voters must first approve a constitutional amendment in the Nov. 3 election.

“It is critically important for taxpayers to turn out and vote this November as there are 4.5 million homeowners who will be paying property tax bills by December 2015 or January 2016,” said state Sen. Paul Bettencourt, R-Houston.

The average savings to homeowners will be about $121 annually, which Snow said he believes will be canceled out in the coming years if property values continue to rise.

“I would anticipate that the savings a homeowner would realize on their school taxes would be negated in one or two years depending on how many more increases to property values [there are],” Snow said.

The Legislature also included $47.5 million for the new instructional facilities allotment as part of SB 1, which provides $250 per student to offset the operating costs for opening a new school.

“That’s something that has remained in law but hasn’t been funded over the last two or three sessions,” Snow said. “We may be able to pick some extra money up when we open Woodard this fall and in 2016-17 when we open High School No. 11.”

Less local control 

In addition to an increase in the state mandated homestead exemption, the legislature made a change to optional exemptions this session.

For the past two decades, CFISD has offered an optional homestead exemption that provides homeowners with an additional 20 percent property tax reduction. The board of trustees is required to vote each year by July 1 to renew, increase, reduce or repeal the exemption, which equates to a revenue loss of $57.8 million annually.

An earlier version of SB 1 contained a provision that placed a 10-year prohibition on repealing the optional exemption, which trustees voted to continue during a May 11 meeting.

“There was a floor amendment that passed that changed that period of time from 10 years to five years,” Snow said. “So until 2019, our local board will not be able to eliminate the optional homestead exemption.”

The district offers two additional optional exemptions as well: one for individuals age 65 and older and one for disabled homeowners, which combined equate to a loss of more than $40 million in revenue annually.

Snow said the legislation makes the optional exemption a defacto mandatory exemption, eroding local control at the school-board level.

“There is a basic concept that you can’t legislate away rights and that statutes can’t retroactively take away rights without some sort of due process,” CFISD’s legal counsel Marney Sims Collins said. “As an entity, I think we’d have a plausible argument for some recourse.”

Budget details

As part of the district’s 2014-15 budget, the board of trustees approved the highest starting teacher salary in the surrounding area at $50,025 annually. Salaries remain a top priority for the district, with a proposed starting teacher salary of $51,050 for the 2015-16 school year.

“We still want to be one of the highest [starting salaries],” Snow said.

The new budget also contains provisions for opening Woodard Elementary School in August.

Although the construction of new schools is paid for through bond sales, the district must budget for other costs associated with opening campuses.

“When they’re completed and we get ready to open those schools, we have additional operating costs that we will have to pick up in the general operating budget,” Snow said.

While CFISD has not made budget cuts in two years, the district still has not restored all cuts made during the state’s budget shortfall in 2011 when $5.4 billion was cut from public education, Snow said.

“It’s like we’re operating under a new normal,” he said. “We made the cuts and are restoring only those things that are absolutely necessary.”