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Operating in the red?

Hays CISD estimates $23M deficit by 2021

Hays CISD could be headed toward a $23 million budget deficit by 2021, pushing district leaders to find solutions for its projected financial shortcomings.

Based on Hays CISD’s budget presentation for the 2018-2019 fiscal year, these projections are estimates, and variables over the next four years could drastically change where the district will stand financially.

School funding in the state of Texas comes from local property taxes and state funding. A “healthy” school district is one where enrollment continuously grows while property values increase. Additionally, state funding is based on attendance and the local tax rate.

If property values increase, state funding will decrease.

The catch-22 for HCISD lies within the state’s formula for funding. As enrollment grows and property values in Kyle and Buda increase, state funding will decrease. But a growing population also means more infrastructure is needed to accommodate the growth.

“Public funding is designed for property value growth and student enrollment growth, and when that doesn’t happen, you lose,” said Annette Folmar, chief financial officer for HCISD. “This  (catch-22 situation) is also meant to show the legislature what schools are facing in the state which could potentially put the district to a $23 million deficit.”

The addition of the IDEA charter school in Kyle could also impact Hays CISD as well. The new campus is projected to take more than 400 students from Hays CISD over the next four years, which could further decrease enrollment and funding from the state.

Other factors driving Hays CISD’s projected budget woes extends to faculty and staff expenses. Eighty-seven percent of the district’s budget is used for faculty and staff, seven percent above the recommended rate.

Additionally, the district is also discussing a $2.5 million expense for its safety initiative.

This includes the addition of 17 school resource officers (SRO), 14 general education behavioral specialists and 14 general education behavioral aides.

“Superintendent (Eric) Wright wants the board to understand that as we sit and look at these numbers, something can be done,” Folmar said. “We have to continue forward and make different decisions.”

The legislature will meet next January and again in 2021, giving Folmar hope that changes could be made in how education is funded in Texas.

The projection puts pressure on the Hays CISD Board of Trustees to find solutions that would keep the deficit under control. But some trustees worry the district could be setting itself up for a tough financial situation.

“If I brought these numbers to my board at work, I would lose my job,” said Trustee Will McManus May 30. “An economic or real estate downturn could be dangerous. We cannot continue to rely on our growth.”

Merideth Keller, Hays CISD board president, said May 30 she wanted to “see the number” go down to zero for the district’s deficit. Board trustee Esperanzo Orosco said the district needed to also be more careful in the future about the budget process and how it’s handled.

Wright said there are potential ways to prevent the deficit. This is not limited to, but may include, staffing cuts, which the district is not a proponent of, program cuts and budget workarounds.

Historically, the district has saved around 2 to 3 percent of the budget by the end of the fiscal year. Folmar said that leftover money could also help cut the deficit.  

“We didn’t create this school finance system and we are showing you what will happen based on the projections,” Wright said. “The Texas Legislature needs to fund public education more and not bet on your value or property taxes to grow.”

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