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Budget &
Finance
Budget Presentations
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Budget Planning
 
 
 
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Budget Planning

 

This page is a chronological archive of RISD’s budget planning presentations and discussions. Some information posted from past meetings may change as more recent data is available.

For the most up-to-date information related to the Tax Ratification Election (TRE), please visit the TRE information website at http://www.risd.org/tre2018.


2018-2019 Budget Adopted (June 21, 2018)
RISD conducted a public hearing the evening of June 21 and Board members then formally adopted the 2018-19 budget. Previously, on June 4, Trustees reached consensus on 2018-19 expenditures, and on June 6 formally adopted the 2018-19 tax rate. This triggered a tax ratification election (TRE) asking RISD voters to approve a 13-cent increase to the operating tax rate.

"This budget does three things," said Justin Bono, RISD School Board President. "It invests in our staff and begins to put in place the recommendations of our recent salary study, which has been a long-time coming. It invests in safety and security on our campuses for our students and staff, and nothing is more important than keeping them safe every day. Third, there is a significant investment for some of our most vulnerable students—our special education students and teachers, and the staff members who support them."

Last year, RISD used one-time reserves to adopt the 2017-18 operating budget with a $6.3-million deficit. This year's budget includes a number of additional expenditures that are contingent upon voter approval of the TRE, including:

  • Increase compensation for teachers and staff by 2.5% 
  • Provide additional teaching and staff positions to serve students in special education and those with special needs
  • Provide additional school resource officers, district safety and security staff, and establish an RISD Department of Safety & Security
  • Adjust the hourly rate for custodial and other classified employees to be more competitive with the market and surrounding districts

If the TRE is not successful, instead of the additional expenditures being funded, trustees will amend the operating budget in the fall to begin addressing a projected $58.9-million deficit over the next five years. Potential cuts and impacts include:

  • Unable to give teachers/staff compensation increase
  • Unable to add teachers/staff through a hiring freeze
  • Increased class sizes
  • Reduced course offerings or programs
  • Consolidation of classroom capacity where feasible
  • Fees for co- and extra-curricular activities

The district has reached this position for two primary reasons—reductions in the state's share of school funding as local property values have risen, and continued operation at the $1.04 operating tax rate. The projected $58.9-million operating deficit assumes 2-percent inflation on non-payroll expenses such as fuel, utilities and supplies.

The state of Texas has reduced its funding to RISD by $16.1 million since 2013-14, and is projected to decrease funding by another $41.8 million over the next five years. Increases in RISD home values cause a homeowner’s school taxes to rise, but the increases do not provide an ongoing benefit to the district’s operating budget due to state reductions in its share of school funding.

RISD's operating tax rate of $1.04 has remained unchanged for 11 years, and is at its lowest point in 27 years. In 2006, RISD's operating tax rate was $1.50. During the last decade, 25 of the 38 surrounding school districts have raised their operating tax rates while RISD has operated and competed with the lower level of revenue generated from the lower tax rate. For a 2018 average market value home in RISD ($281,000), the 13-cent operating tax increase would equate to an annual increase of $296.

“For those who believe in safe schools, outstanding teachers, and maintaining a strong district that meets the high expectations of our community, this action could no longer be avoided,” Bono said at the June 6 tax rate hearing. “From our highest-achieving schools to our campuses and students in need of additional resources, RISD can no longer operate on the reduced state funding and revenue generated by a minimum operating tax rate.”

Learn more about the TRE
Learn more about the June 21 meeting, including video


Trustees Call Tax Ratification Election (June 6, 2018)
At their June 6 meeting, after months of budget discussion, and incorporating recommendations from the comprehensive community and staff strategic planning process that began last fall, the Richardson ISD Board of Trustees reached consensus on RISD’s 2018-19 operating budget and formally called a tax ratification election for September 4 to ask voters to raise the district’s operating tax rate.

Find out more at the TRE website

TRE Hearing Presentation

Watch the tax rate hearing and Board vote


Board Informally Agrees to Operating Budget (June 4, 2018)
At its Monday, June 4 regular meeting, RISD trustees informally agreed to 2018-19 operating budget expenditures of $340 million. RISD's longtime $1.04 operating tax rate is projected to generate $317 million in 2018-19, $23 million less than proposed expenditures.

The Board's agreement sets the stage for a meeting and tax rate hearing on Wednesday, June 6, at which the Board is expected to adopt an increased 2018-19 operating tax rate that would generate the revenue needed to support the operating expenditures and priority initiatives.

The 2018-19 operating budget comes after a $6.3 million operating deficit in 2017-18 was bridged with one-time funds. RISD's operating funding from the state has been reduced by $24 million over the last five years and is projected to be further reduced by $33 million over the next five years (see graphic A). These reductions come from the Texas school funding system, which is designed to respond to higher property values with reduced state operating funds for schools. This results in higher property values continuing to increase RISD taxpayers' share of education funding, but without providing additional recurring operating funds to RISD.

"We simply can no longer fund RISD's operating needs, let alone priority expenditures, at our longtime $1.04 tax rate," said Board President Justin Bono. "Our district and trustees have held the line on the operating tax rate for the last decade, but if we are to protect the strong programs we have built and invested in, attract and retain our high-quality teachers, and take steps to make our schools safer, the time has come for us to ask our community for additional funds." 

The 2018-19 operating budget would include additional funding for priority initiatives identified through the seven-month community, parent and staff strategic planning process and external audits of district operations. Priority expenditures include school resource officers, safety & security personnel, educators to work with students who have special needs, and compensation to retain and attract talented teachers and staff.

Outside of the operating budget, proposed 2018-19 expenditures include $5.7 million in one-time expenditures from one-time reserves, including facilities and security audits of all schools, new school buses, and bus equipment as RISD brings student transportation in-house after the dissolution of former provider Dallas County Schools.

RISD’s $1.04 operating tax rate has remained unchanged for 10 years since being lowered from $1.50. It is at its lowest point in 27 years, and was last raised in 2001. The district's combined $1.39 operating and debt service tax rate ranks 31st out of the 38 districts in Dallas & Collin counties.

Trustees are scheduled to meet on June 6 to formally adopt a 2018-19 tax rate, and call a tax ratification election for September 4 for RISD voters to decide whether to approve an operating tax rate increase.

The additional priority expenditures for 2018-19 are contingent upon voter approval of the increased operating tax rate. If the tax rate increase is not approved, instead of the additional priority expenditures for 2018-19, trustees would be forced to consider additional operating budget cuts to cover a projected $13.3 million shortfall over the next five years.

Trustees discussed revenue levels that would be generated at varying operating tax rates, and the impact on future operating budgets. An operating tax rate increase of 13 cents was recommended by Dr. Stone as the only level that meets RISD's projected budget needs and implementation of strategic planning recommendations over the next five years (see graphic B).

Trustees also discussed scenarios in which a raised tax rate could be lowered in the future if the Texas legislature takes action on school finance to provide additional operating funds to schools.

After the tax rate adoption on June 6, Trustees are expected to vote to formally approve the 2018-19 operating budget at its June 21 meeting.

For more information about the community, parent, staff and student strategic planning process, please visit the Strategic Planning page.

To learn more about the June 4 Board meeting, including video, please visit the Board Agenda page.


2018-2019 Operating Budget and Tax Rate (May 21, 2019)
Dr. Stone and trustees continued discussions about the 2018-19 operating budget and potentially asking RISD voters for an operating tax rate increase in order for RISD to meet current and future operating needs. Trustees, community members and staff have been studying RISD's financial situation since last fall.

The two central topics discussed included what budget amount and operating tax rate are necessary for RISD to meet current and future operating needs. Dr. Stone summarized RISD budget planning activities year to date:

  • Reviewed the 2017-18 budget and fund balance reserves
  • Identified approximately $4 million in budget reductions and cost savings to fund instructional initiatives
  • Prioritized the staff and teachers’ 2018-19 needs
  • Benchmarked RISD student demographics and finances to North Texas and peer districts
  • Evaluated current Maintenance & Operations (M&O) tax rate and revenue
  • Examined the five-year financial projections
  • Created a comprehensive 5-year Strategic Plan with 300+ RISD teachers, staff, students, parents, and community members to help shape the future of RISD

Key points were re-emphasized as trustees discussed decisions related to budget and operating tax rate. RISD's current and future financial obligations must allow the district to: 

  • Retain and recruit high-quality teachers and staff
  • Maintain and expand advanced academic and college & career readiness programs
  • Increase instructional support to close the achievement gap 
  • Keep current class sizes and programs

The school finance system in Texas:

  • Has resulted in a $10-million decrease in state funding for RISD since 2014
  • The state will provide only 23% of RISD operating revenue in 2018-19
  • Does not allow RISD the same operating benefit from property value growth like cities and counties

RISD’s Strategic Planning Committees

  • Developed five-year action plans to improve the district 
  • Determined the $1.04 operating tax rate does not provide funding revenue that meets current or future RISD needs
  • Encouraged the district to consider alternative funding sources, such as a change in operating tax rate

Dr. Stone presented 2018-19 operating budget recommendations that include priority requests from departments and recommendations from the strategic planning committees, including:

  • Additional teaching and staff allocations for special education and to serve students with special needs
  • A 2.5% compensation increase for teachers and staff to offset cost of living and healthcare cost increases
  • Additional safety and security staff

Recommended one-time purchases from reserves would include:

  • A safety and security audit of all RISD schools
  • A facilities audit of the physical condition of all RISD schools and infrastructure
  • School bus replacement and bus equipment replacement related to the voter dissolution of existing bus service provider (Dallas County Schools)

Trustees felt the final list of recommended expenditures were necessary and represented clear district needs and top priorities.

The Board then discussed at what level the operating tax rate should be set in order to fund the budget, and potentially asking the community to raise the existing operating tax rate. The current $1.04 operating tax rate does not generate enough revenue to sustain RISD operations at current levels, and an increase would be necessary to fund the priority district expenditures recommended above.

If the district remained at $1.04, a $6-million deficit budget would have to be adopted in order to maintain programs, class sizes and allocations at current levels.

  • A balanced budget at the revenue level provided by a $1.04 operating tax rate would require program and service cuts that would directly impact class sizes and the number of teachers and staff.
  • A budget at the revenue level provided by a $1.10 operating tax rate would allow RISD to meet current operating expenses without adding any additional expenditures like additional teachers or a staff salary increase.
  • A budget at the revenue level provided by a $1.14 operating tax rate would allow RISD to meet current operating expenses and provide a 2.5% teacher/staff compensation increase.
  • A budget at the revenue level provided by a $1.17 operating tax rate would allow RISD to meet current operating expenses, provide a compensation increase and also implement the initiatives recommended by the strategic planning process.

Trustees agreed that additional funding from the state legislature will not be coming, and the options for RISD under the school finance system are to either cut programs and services or ask taxpayers to increase the operating tax rate.

Dr. Stone recommended an operating tax rate of $1.17 as the necessary path for RISD to continue to provide the education and services that the community expects. 

"I applaud RISD's efforts over the previous decade to keep the operating tax rate unchanged at $1.04 while many area districts made the decision to raise operating rates," Stone said. "I'm certain our taxpayers have appreciated the district holding the line. But after passing a deficit budget last year, RISD can no longer be sustained by a minimum operating tax rate while also meeting the needs and expectations that our parents and community have for our kids."

The Board is expected to finalize the 2018-19 operating budget on June 4, and then conduct a tax rate hearing and adopt the 2018-19 tax rate on June 6. On June 21, the Board will then conduct a public hearing on the budget before formally adopting the 2018-19 budget.

See the May 21 Budget presentation

Watch a video of the May 21 budget discussion


Board Discusses Budget, Tax Election (May 7, 2018)
RISD trustees heard recommendations for the 2018-19 operating budget, including funding needs for additional special education teachers, along with additional police officers and security staff. Trustees discussed a cost of living increase for teachers and staff, and costs to bring student transportation services in house after the dissolution of former bus service provider Dallas County Schools last fall.

Trustees again discussed RISD's revenue limitations under the Texas school finance system, where the ongoing benefit of increased school tax revenue collected from rising property values is taken by the state of Texas and used for expenses unrelated to public education. In addition, as property values rise, the amount of funding the state provides to RISD goes down, shifting more of the burden for public schools onto district taxpayers. The state system severely penalizes districts like RISD that have kept operating tax rates low for an extended period of time.

Based on recommendations from RISD's strategic planning process, Dr. Stone recommended that trustees consider calling a tax ratification election (TRE), this September, asking RISD voters to consider raising the operating tax rate up to an additional 13 cents, to $1.17, beginning with the new fiscal year. Some highlights of the discussion included:

  • RISD currently spends less per student than peer districts, despite having students with more needs.

  • RISD's operating tax rate of $1.04 is lower than the $1.10 average of North Texas peer districts.

  • RISD is one of the three remaining districts in Dallas & Collin counties to offer a local optional homestead exemption that reduces the tax burden on RISD homeowners. This exemption costs RISD approximately $8 million a year.

  • RISD's operating tax rate has remained unchanged at its current level of $1.04 for 11 years, when it was lowered from $1.50.

  • A tax increase of 13 cents would cost homeowners of an average value RISD home $21.67 monthly ($260/year). (Please note that May 7 budget planning discussions utilized 2017 appraised home values from the Dallas Central Appraisal District, which were the latest available. 2018 appraised home values became available later in May, and because the average market value of homes in RISD rose, the tax impact of a 13 cent operating tax increase on an average RISD home also rose, to $296 a year. Visit risd.org/tre2018 for the most up to date information related to RISD’s proposed TRE.)

  • The first two pennies of tax increase would generate $5.8 million of state "bonus" funds above and beyond the $3.8 million it would generate from RISD taxpayers.

  • A 13 cent increase in operating tax would raise RISD's total tax rate (operating and debt service) to $1.52, which is 30 cents less than RISD's $1.82 rate 13 years ago.

  • Over the last decade, a number of area districts that RISD competes against for teachers have adopted operating tax rates of $1.14 - $1.17, including Allen, Carrollton-FB, Grand Prairie, Irving, McKinney, Plano and Wylie.

  • Teacher and staff salaries comprise approximately 90% of a school district budget, so the higher tax rates have provided competing districts with more resources over the years to attract and retain quality teachers and staff members.

Trustees discussed future budget implications the district could face if additional revenue is not generated, including a potential impact of teacher salaries, class sizes, fine arts, athletics, and extra-curricular opportunities. The board will meet in June to formally consider a tax rate adoption and calling a Tax Ratification Election. The following 2018-19 expenditures would be contingent on passage of the TRE:

  • Teacher and staff cost of living increases

  • Establishment of Safety & Security Department

  • Safety & Security Audit of all schools

See the May 7 budget presentation and recommendations

Learn more about the May 7 Board meeting, including video

Learn more about the initiatives and recommendations from the Strategic Planning process that includes employees, parents and community members.


2018-2019 Budget Planning (April 23, 2018)
On April 23, Trustees continued discussions surrounding planning for the 2018-19 operating budget.

The Board reviewed previously discussed recommendations from the Revenue & Finance Action Team that RISD work immediately to consider ways to generate additional revenue, including the possibility of asking voters to raise the operating tax rate.

Dr. Stone and CFO David Pate discussed projected operating revenues and expenses for 2018-19, and staff provided trustees with several areas of need, as a starting point for budget expenditure discussions.

Revenue Discussion Highlights

  • RISD's current financial structure is inadequate to accomplish the district's mission.

  • RISD has less to spend per student than most peer districts, despite having a population of students with higher academic needs.

  • The disparity is caused by RISD's lower operating tax rate.

  • As property tax rates increase in RISD, the state of Texas reduces the amount of ongoing funding that RISD receives.

  • The higher taxes paid by RISD homeowners and businesses from increased property values are retained by the state of Texas after one year and used to pay for state budget items unrelated to public education.

  • A change in revenue is necessary or RISD's fund balance reserves will be exhausted by 2020-2021.

  • State funding to RISD is projected to steadily decline, from $89 million in 2016-17 to $29 million in 2022-23.

  • Under the school finance system, RISD is financially penalized by the state of Texas for not taxing homeowners and businesses at a higher operating tax rate.

  • RISD's operating tax rate of $1.04 hasn't changed since 2008, when it was reduced after being $1.50.

    Increased Proposed 2018-19 Expenditure Highlights
  • The reorganization of the Curriculum & Instruction division resulted in operating cost savings that, combined with reprioritization of existing funds (such as federal Title grant funds) will provide the $3.2 million funding for the ACE program implementation in 2018-19. The ACE program will be funded through existing dollars and is not projected to require any increased expenditures from the operating budget in 2018-19.

  • RISD staff narrowed down budget requests from different divisions and departments into the new expenditures most needed given limited funds and resources.

  • As part of efforts to identify causes of RISD's teacher turnover rate that exceeds state and N. Texas averages, last year the district commissioned a third party study of RISD's salary structure.

  • Results from that study and recommendations from the Personnel Action Team have recommended that RISD increase the salary structure for teachers and some other job types (such as custodians) to be more consistent with competing districts, including salaries for experienced, veteran teachers.

  • The study recommended that RISD move away from a philosophy of providing across-the-board compensation increases in favor of increases based on the midpoint of all salaries within each job classification.

  • Overwhelming staff feedback and the salary study both indicate a need for RISD to re-implement a stipend for teachers who possess advanced degrees. RISD discontinued the stipend several years ago as a cost-cutting measure.

  • The cost of the teacher and staff compensation recommendations to bring RISD up to the current market for different job types is projected at $9.5 million annually. Parts of the recommendations could be implemented in time for 2018-19 and parts could be phased in for the 2019-2020 school year.

  • A 3% across the board compensation increase for all staff for 2018-19 would cost $7.5 million annually.

  • Adding an advanced degree stipend for teachers would cost $1 million annually.

  • The annual increases in TRS health insurance costs alone often consume compensation increases for teachers and staff. Increases to employee compensation are factored into TRS retirement calculations while increases in RISD's share of health insurance costs of employees are not. For that reason, RISD has traditionally provided compensation increases as opposed to increases to offsetting rising health insurance premiums.

  • The projected cost of 65 additional critical needs special education instructional staff allocations is $3 million.

  • Safety and security costs for additional assistant elementary principals, additional school resource officers for elementary schools, a third party safety audit of all schools, and an office of safety & security would cost approximately $2.3 million.

  • A districtwide study recommended by the Facilities Action Team to evaluate the structural integrity of all RISD schools, including condition of the mechanical, electrical, HVAC, plumbing, safety systems and other core infrastructure, would be a one-time cost of approximately $2.5 million. This study would be unrelated to the campus capacity study currently being conducted by Stantec.

  • With the dissolution of Dallas County Schools, RISD is in the process of bringing transportation services in-house as the most cost-effective way to transport students. The initial cost to begin a cycle of school bus replacements to refresh the fleet and retire old buses would be $1.2 million annually. This cost could be absorbed into future bond proposals.

  • Including all recommended increases for additional staff, equipment and services would result in a 2018-19 budget deficit of approximately $20 million. That would include approximately $4.6 million in one-time items, excluding buses.

  • The district is currently reviewing staffing allocations and budgets across all departments and comparing them with peer district benchmarks to determine areas where cuts or efficiencies can be gained.

  • Because such a high percentage of a school district's budget expenditures (90%) is based on staff compensation, and because RISD already spends less per student than peer districts, opportunities to cut operating expenditures are limited in non-staffing areas.

Options to Increase Revenue

  • The Revenue & Finance Action Team has recommended that RISD consider calling a tax ratification election (TRE) to ask voters to raise RISD's operating tax rate, and also consider the future elimination of the local optional homestead exemption.

  • Raising the operating tax rate two cents (to $1.06) would generate approximately $3.8 million annually for the district while RISD would receive an additional $5.9 million a year in state funding.

  • Raising the operating tax rate each penny past $1.06 would generate an additional $1.9 million, up to the capped rate of $1.17. Starting at $1.06, and for each penny thereafter, RISD would be forced to pay a portion of the additional funds raised to the state of Texas in the form of "recapture" for distribution to other school districts.
  • If voters approved an operating tax rate increase of .13 cents, RISD could generate an additional $24 million in annual operating revenue.
At its May 7 meeting, the Board and staff are expected to discuss prioritization of budget items and areas for potential cuts or efficiencies as budget planning discussions continue, leading up to the budget and tax rate adoption in June.

See the April 23 budget presentation


2018-2019 Budget Planning (April 16, 2018)
Trustees continued discussions surrounding planning for the 2018-19 operating budget. The strategic planning action team on revenue & finance has concluded that RISD's current financial structure is inadequate to accomplish the district's mission:

  • The greatest misconception among taxpayers about how schools are funded is that rising property values allow school districts to increase their operating budgets. In reality, it is the state of Texas that receives the ongoing benefit from the school taxes that are collected from property value increases, not school districts. This is because those increased tax dollars are passed through to the Texas treasury in the form of reduced state funding to RISD after one year.

  • RISD currently spends over 5% less per each student than North Texas peer districts, despite having more students with greater needs in areas such as English language learners, special education and those who come from economically disadvantaged families.

  • This disparity is caused due to a lack of funds generated from the district's $1.04 operating tax rate, compared to an average rate of $1.10 among N. Texas peers.
  • Without a change to RISD's revenue stream, usable fund balance reserves will be exhausted by 2020-21.

  • As local property taxes continue to rise, the amount of ongoing education funding provided to RISD from the state of Texas is reduced in proportion to the additional property taxes collected.

  • The Texas legislature consistently uses billions of tax dollars collected by school districts from the rising property values of homeowners and business for purposes other than public education.

  • For school districts, increased property values provide a one-time, single use increase in funding, which cannot responsibly be used to fund multi-year expenses like adding more teachers, adding more school security staff, a pay raise for educators, or increasing utility/energy costs.

Efforts continue to ensure operations are as efficient as possible, but the funding disparity is far greater than additional cost cutting measures can address. The conclusion of the strategic planning action team on revenue and finance is that RISD must take immediate actions that will increase sustainable sources of revenue for the district to be able to accomplish its mission.

The Board will continue to discuss budget planning leading up to the budget adoption in June.

See the April 16 budget presentation


Budget Discussion (April 2, 2018)
Based on recommendations from the strategic plan action team on revenue & finance (comprised of parents, community & staff members), Trustees were presented with information related to RISD’s operating tax rate and the amount of revenue that would be generated by each additional penny between the current $1.04 and the capped rate under state law of $1.17. The information was presented for trustees’ information as they prepare for comprehensive discussions about RISD’s 2018-19 operating budget, needs, priorities and limited options for generating additional revenue for the growing district under the Texas school finance system.

Specifically, the first two pennies of an increased operating tax rate would yield additional local revenue and also additional state revenue under the Texas system. Additional pennies between $1.07 and $1.17 would generate additional local revenue that would be partially offset by increased payments to the state under the recapture (or “Robin Hood”) system. The strategic action team on finance and revenue has recommended that trustees consider the merits of calling a tax ratification election (known as a TRE) as the way provided for under Texas law for school districts to generate additional operating funds.

The Board is expected to begin comprehensive discussions about the 2018-19 operating budget later this month.

See the presentation

Watch the meeting

Learn more about RISD's strategic planning process


Budget Discussion (March 5, 2018)
Trustees continued their discussions related to the 2018-19 operating budget. This presentation focused on financial data benchmarked against peer districts with similar enrollments and/or student poverty levels around Texas, as well as comparisons to other North Texas districts. Highlights included:

  • Based on preliminary information from the Dallas Central Appraisal District, RISD can expect similar property value growth in 2018 as was experienced in 2017.
  • Due to lower revenues under the school finance system, RISD spends less per student than both N. Texas peer districts and statewide peer districts, despite having students with higher needs in many cases.
  • RISD has a higher percentage of English Language Learners (25.6%) than the average in both peer groups of districts.
  • RISD provides the second highest percentage of special education services (10.54%) to students in both peer groups of districts.
  • RISD has the highest teacher turnover rate among the enrollment/income peer group of districts.
  • RISD maintains the fourth lowest combined tax rate (1.39) among the 15 peer districts in North Texas.

Under the current school finance system, existing revenue and available savings will not sustain the current level of operations.

Trustees will continue to discuss district priorities and evaluate operating revenue options as budget planning continues, leading up to a budget adoption in June.

See the March 5 budget planning presentation


2018-19 Budget Discussion (February 19, 2018)
Trustees continued discussions related to next year's operating budget (see previous budget update).

The process of building the budget was outlined and will include input from a number of data points, including:

  • Updated demographic report of enrollment projections
  • A study of RISD teacher and staff salaries
  • An audit of RISD curriculum
  • Recommendations from the ongoing strategic planning process
  • Focused district initiatives

The Board and staff will continue to discuss the 2018-19 operating budget and work through the process of prioritizing needs at meetings over the remainder of the school year, leading up toward a budget and tax rate adoption in June.

See the budget discussion presentation


2018-19 Budget Planning (February 5, 2018)
Trustees and staff began the planning process for the 2018-19 operating budget. Staff presented an overview of the budget adoption process, calendar, and information. Key elements included:

  • The state of Texas continues to reduce its share of funding to RISD.
  • As property taxes for RISD homeowners and businesses continue to rise, the state of Texas keeps the additional operating revenue collected by RISD after an initial year. This feature of the Texas school finance system supplies the state with billions of dollars that the Legislature uses for non-school purposes, despite being collected as local school district taxes.
  • Initial budget forecasts include baseline amounts as a starting point, with no additional projected teaching allocations, moderate enrollment growth, and continued property value growth.

The Board will review departmental and program requests, and staffing needs as the process continues through the spring, with an eventual budget adoption in June.

See the budget presentation


2018 Demographic Update (January 8, 2018)
Templeton Demographics presented the annual demographic report for RISD. The report, which includes updated enrollment projections, assists RISD with short- and long-range facilities and budget planning. Highlights included:

  • RISD added 44 students this year for a total enrollment of 39,313. This nominal growth was lower than projected. Enrollment growth is projected to continue at a low-moderate rate over the next decade.
  • RISD can expect an increase of approximately 1,460 additional students districtwide over the next five years (to a projected enrollment of 40,700 students).
  • The percentage of students enrolled from multifamily housing dropped this year to 48.4% due to increased rent rates.
  • The average existing home sale price in RISD has increased 50% since 2010, to $343,000. The average new home sale price in RISD has risen 60% over the same period, to $443,000.

The district will use data from the demographic update to augment to ongoing long range facilities planning efforts to determine where additional classroom space is needed across RISD to accommodate existing and projected enrollment growth.

See the 2018 RISD Demographic Update

Listen to the Board Discussion


Board Approves Operating Budget, Addresses Growth - 6/19/17
The RISD Board of Trustees met on June 12 for a board meeting and public hearing on the 2017-18 operating budget.

Trustees voted to approve the 2017-18 Operating Budget, which includes an increase of approximately $18 million and prioritizes core instruction and staff retention.

"For the first time in over a decade, our district must use savings to balance a budget that addresses critical needs," said Board President Justin Bono. "While we're fortunate to have reserves available as a result of conservative fiscal management in recent years, the ongoing use of savings to balance an operating budget is not sustainable."

"Simply put, the State of Texas needs to contribute more dollars to fund public school districts, especially those like RISD that are growing and have thousands of students with specialized needs that require more resources to educate. If the state does not contribute more dollars moving forward, we may be forced to ask our taxpayers for additional funds or risk quality in the education and services we provide."

Highlights of the 2017-18 Operating Budget include:

  • A 3% raise for teachers and staff who qualify through performance evaluation (represents 64% of the budget increase)
  • 56 additional teaching allocations to accommodate enrollment growth and needs in special education
  • No change in RISD's $1.04 operating tax rate
  • No change in RISD's local optional homestead exemption of 10% - RISD is one of three districts in the area that still offers homeowners this optional property tax reduction
Trustees discussed the budget and staff confirmed that, unlike cities, counties and other taxing entities, school district operating budgets do not derive an ongoing benefit from increased tax revenue due to increased property valuations. Under the Texas school finance system, the state - not school districts - benefits from additional tax dollars generated by increased property values. Any increased operating funding received by RISD is reduced by a corresponding amount the following year.

RISD's 2017-18 fiscal year begins July 1.

See the 2017-18 Proposed Budget presentation

Learn more about the June 12 Regular Meeting, including video



Trustees Decide on Budget Direction - 5/17/17
At their May 15 Work Session, RISD Trustees continued discussions about the 2017-18 operating budget and RISD's funding situation under the school finance system.

Trustees again reviewed RISD's options to generate recurring revenue under the Texas school finance system.

The state allows school districts to keep increases in operating funds due to higher property values for a single year before reducing the state's recurring contribution the following year.* This scenario results in districts receiving a one-time benefit from yearly increases in property values, while the recurring benefit from higher tax levies paid by RISD taxpayers goes to the state of Texas.

2017-18 Expenditures
The Board directed staff to move forward with planning to fund additional requested allocations, critical needs and current commitments in the 2017-18 operating budget.

In addition, after discussion and a review of regional and competing districts' plans for teacher salary increases, the Board directed that a 3% salary increase for teachers and staff (who meet performance expectations) be built into the proposed budget. "We absolutely want to keep our valued teachers and employees here in RISD," said Dr. Jeannie Stone. "We ask much of our teachers, and they are very deserving."

The recurring cost of the salary increase is $6.8 million, beginning in 2017-18. Taken with additional teaching and staff allocations and current commitments, the proposed increase in operating budget expenditures in 2017-18 is $17.4 million.

2017-18 Revenue
Board members evaluated available and potential one-time and recurring revenue sources:
  • RISD maintains a fund balance, in part to operate the district during the early portion of each fiscal year until most of the revenue arrives in the fall and winter. The state recommends school districts maintain a fund balance equivalent to three months of operating expenses, and RISD's fund balance is $7 million above that level. Trustees prioritized using excess fund balance to fund the 2017-18 budget.

  • When property values increase and RISD receives more dollars from property taxes, the district benefits for one year with additional operating funds.* The following year, the state of Texas reduces its recurring contribution to the district by the amount of the increased tax collections. This process results in RISD having one-time (single use) operating dollars available to use. In 2016-17, the amount of one-time operating dollars from property value increases is projected to be $9 million, and trustees prioritized using those dollars to fund the 2017-18 budget.

  • RISD maintains a Capital Projects Fund that can be used to pay for one-time expenses, such as additional classrooms or renovations, that were not part of a bond package. Trustees prioritized maintaining the current balance ($5.7 million) of the Capital Projects Fund to be prepared for unforeseen capital expenses.

  • RISD maintains a Permanent School Fund (PSF) of $18 million, which can be used for any one-time operating or capital expenditure. The PSF has been treated as a 'rainy day fund' in the past, and is a factor in RISD's high bond ratings. Trustees prioritized maintaining the PSF at its current level for 2017-18 and not utilizing it to fund the 2017-18 operating budget.
A Bridge Budget
Trustees described the planned 2017-18 budget, which will utilize some single-use dollars to fund recurring operating expenses, as a bridge that will allow the district to fund priorities while using the coming year to evaluate longer-term solutions to generating additional recurring operating revenue.

Potential sources of recurring school district revenue include:
  • Increasing the operating tax rate through a tax ratification election
  • Legislative action to increase the state portion of RISD's funding
  • Elimination of the local optional homestead exemption currently offered to taxpayers (cannot be done until 2020)
  • Reduction in services
RISD staff will prepare the 2017-18 operating budget for Board consideration for adoption at its June 12 meeting.

*School districts retain the benefit of increased property values for the Interest & Sinking Fund portion of the tax rate, which is used to fund bond payments. Funds generated from this portion of the tax rate cannot be used for operating expenses or assigned to the operating budget.

See the May 15 Budget Presentation

Watch the May 15 Budget Discussion



Trustees Hear Initial 2017-18 Budget Recommendations - 5/8/17
At their May 8 Work Session, RISD Trustees heard initial recommendations from staff related to the 2017-18 operating budget. The session continued a series of trustee meetings that began in January related to budget background and preparation. Major points of the meeting included:
  • Under the Texas school finance system, the dramatic increase in RISD property values is reducing the state funding received by RISD.
  • The rise in property values (over 10% this year) is outpacing RISD’s enrollment growth and having a negative impact on RISD operating funds.
  • The increased tax dollars being paid by RISD property owners due to rising property values are spent by the State of Texas on unrelated items and do not provide ongoing revenue to operate RISD.
  • The tax burden for funding RISD operations is continuing to shift to RISD taxpayers. The state portion of funding in RISD’s budget is projected to be 27%, down from 51% in 2008.
  • The cost of tax exemptions for homeowners ages 65 and over is expected to be significantly higher than projected, further reducing available revenue.
The school funding system is providing limited additional dollars to RISD at its current tax rate. The RISD Board is facing key decisions about funding new teaching and support staff allocations for 2017-18, as well as funding a teacher/staff pay increase to remain competitive with area districts and continue to address teacher retention.

“Our Board and leadership team have some significant budgetary decisions to make over the next two years,” said Dr. Stone. “This district has operated in a very conservative manner for many years, which has allowed us to accrue one-time sources of funds available to help us through downturns in state funding. However, using one-time funds to pay for recurring items in our operating budget is a temporary solution before we’ll be forced to take steps to increase operating revenue. We have a responsibility to our students, parents and employees to staff our district at the level necessary to meet the appropriately high expectations for performance and operations, and to keep our great teachers right here in RISD. We also have a responsibility to our taxpayers to operate efficiently and use the funds available to us before considering any path that would increase their tax burden.”

More than 90% of RISD’s operating budget funds staff salaries. The non-salary areas of RISD’s expenditures were evaluated for reductions in 2011-2013 as part of the state budget cuts to public education that reduced RISD funding by $35 million over that two year period. Options available to RISD to increase revenue include asking voters to raise the operating tax rate from its current level of $1.04, and/or eliminating the 10% local optional homestead exemption (in 2020), which RISD offers to taxpayers as an additional way to reduce their property tax burden.

Staff shared a list of 2017-18 budget requests to address critical needs, most involving staffing allocations to address ongoing enrollment growth and increased demand from student participation in programs and activities. Staff described the budget process, beginning with $30 million of requests from schools, programs and departments, that were prioritized to $5.8 million of critical need requests. Highlights of critical need requests included:
  • 13.5 new elementary teacher allocations
  • 20 new secondary teacher allocations
  • 4 new secondary coach/teacher positions
  • 6.5 assistant principals
  • 20 new special education teacher allocations
  • 2 new dyslexia teacher allocations
  • 9.5 new diagnosticians
  • 5 additional positions in facilities services
Staff noted that in some non-instructional areas, staff reductions during the major state cuts to public education in 2011-13 were never replaced, which is impacting operations. Additional data includes:
  • RISD enrollment has grown more than 5,200 students since 2007-08, and is projected to add another 3,000 students over the next seven years.
  • RISD’s staffing in special education is significantly smaller than similarly sized ISDs, creating substantially higher workloads for existing staff.
  • RISD served 487 refugee students in 2011-12 and serves 1,102 currently.
  • The RISD maintenance department employed 125 staff members in 1990 to service 4.8 million square feet. Maintenance currently employs 54 staff members to service more than 6.2 million square feet.
Staff shared that additional teacher and staff allocation needs exist beyond those identified as critical needs for 2017-18, and revenue/funding limitations impact how many staff can be added. In addition to the critical need requests, staff shared the list of existing/previous commitments to the 2017-18 budget, including mid-year staff additions, additional costs for transportation and recurring instructional support items funded through the instructional contingency fund. A salary increase for teachers and staff was the final element discussed as a possibility for inclusion in the 2017-18 budget.

The presentation provided comparative tax rate data from benchmark ISDs in Dallas & Collin County that indicated RISD taxes at the second lowest combined rate among 22 school districts. Staff also shared that RISD is one of three districts in Dallas & Collin counties to offer the local optional homestead exemption. The Board discussed scenarios involving inclusion of different elements and levels of pay increases in the 2017-18 budget, along with possible funding options. Trustees requested additional information on a variety of topics, including balances of available one-time operating funds. Several trustees indicated that utilizing one-time funds to adopt the 2017-18 budget would allow for more time to plan next steps to address recurring revenue sources.

The Board will continue budget discussions at the May 15 work session, leading up to public hearing and adoption of the 2017-18 tax rate and operating budget on June 12.

See the budget presentation

See the critical need budget requests for 2017-18

Watch the budget discussion



Board Discusses Staff Compensation - Salary Study Coming - 5/1/17
At its May 1 meeting, RISD Trustees heard a report from Human Resources related to teacher and staff compensation, and staffing levels, which will impact 2017-18 budget discussions.

Highlights of the report included:
  • Teacher retention continues to be an issue in RISD, across Texas and the U.S., and many reasons contribute to staff turnover.
  • RISD is focused on factors related to turnover that it can control, including compensation, work climate & support.
  • RISD has remained competitive with benchmark districts on starting teacher salaries and stipends for areas of critical need, such as bilingual, special education and secondary math/science.
  • Compression, which results from market rates outpacing pay increases for more experienced staff, is impacting RISD, specifically veteran teachers.
  • Compression results in a smaller difference between teachers or staff with fewer years of experience compared to those in the same position with more years of experience.
  • Compression within RISD's salary schedule is an issue the district wants to address, in order to reward teachers and employees with higher years of experience.
District staff also indicated that additional teaching, support and administrative staff allocations are needed to keep pace with student enrollment growth in order to serve students and support operations. Specific areas identified in need of additional staffing include general education, special education, ESL/Bilingual & athletics. Staff recommended next steps, including:
  • Engaging a firm to conduct a comprehensive salary study to ensure staff salaries are competitive, especially for RISD's more experienced employees that are being impacted by compression in the salary schedule.
  • RISD is recommending a salary increase for teachers and staff in 2017-18. The amount will be determined as budget discussions continue.
  • Additional teacher allocations are needed at elementary and secondary to accommodate enrollment growth.
  • Additional campus/central administrative allocations are needed to meet increased demand from enrollment growth.
  • Monitor health insurance premiums for all staff and consider increasing RISD contribution to help offset increasing costs from the state.
The recommendations will be part of RISD's budget considerations and planning for the 2017-18 operating budget continues.

See the Compensation & Staffing Presentation



Board Discusses Budget - 4/11/17
CFO David Pate concluded his series of presentations to trustees that have provided background and context for upcoming 2017-18 budget discussions. The focus of the final discussion was key decision points that trustees make in the budget adoption process. Key points included:
  • Compensation - staff salaries account for 90% of RISD's operating budget, so any adjustment to compensation has a critical impact on overall expenditures and future obligations. For each 1% increase in salaries, the operating budget would increase $2.25 million.
  • Another form of compensation is contributing to offset health care premiums for each employee. The Board evaluated RISD data in this area compared to benchmark ISDs.
  • Factors driving revenue include tax rate, student enrollment and property values. RISD's tax levy is the third lowest among ISDs in Dallas & Collin counties.
  • ISDs are required to maintain a fund balance to manage cash flow needs throughout the year and have reserves for unexpected revenue shortfalls. RISD currently has unassigned fund balance that can operate RISD for 3.3 months. Some districts utilize a portion of fund balance to pay non-recurring (one-time) costs.
  • RISD will receive estimated certified tax values from DCAD by April 28, which will inform the district's revenue forecast for 2017-18 and be a catalyst for 2017-18 budget discussions.
The Board is expected to discuss 2017-18 budget priorities at the May 1 meeting.

See the April 10 Budget presentation

Learn more about the April 10 Board work session, including video



Board Continues Budget Discussions - 4/4/17
At its April 3 meeting, RISD Trustees continued their discussions about the operating budget. CFO David Pate provided a review of RISD's expenditure picture, highlights include:
  • RISD's current operating tax rate is $1.04, and the district can benefit substantially under the Texas school finance system by raising the operating tax rate two additional cents, which would trigger additional state funds returning to RISD beyond the amount the additional two cents would raise locally.
  • School districts cannot legally use bond funds to pay for operating expenses, such as employee salaries, which currently account for 90% of the operating budget. So an increased recurring expenditure, such as a salary increase for teachers, must be funded through either an increase in revenue or a reduction elsewhere in the operating budget.
  • Under the Texas school finance system, districts like RISD are financially penalized for taxing below $1.04 and incentivized to tax up to $1.06 to maximize the amount of local property taxes kept in the district. If RISD were to lower the operating tax rate below the current $1.04, it would lose significantly more funding from the state than the local revenue that a reduction would cause. If RISD taxed above $1.06, the amount of funds generated from local taxpayers would be mitigated by required payments to the state under the recapture (or "Robin Hood") system.
  • Even though property values are increasing, the long-term benefit of additional tax dollars generated from property owners goes to the State of Texas, not school districts like RISD.
  • Like all districts, RISD maintains a fund balance of reserves, in part to meet cash flow obligations. Part of the fund balance is 'non-expendable' or restricted under accounting standards.
  • While monthly cash flow expenditures for school districts are primarily static due to payroll obligations, revenues come to school districts at certain times of the year, based on property tax payments and payments from the state that occur well into the fiscal year.
  • Mr. Pate provided a recent historical perspective of RISD's fund balance.
  • School districts expend operating funds in state-prescribed categories (called functions), and Mr. Pate provided a recent history of RISD expenditures by function.
  • Different areas of expenditures and budget allocations are determined in part through different state or federal requirements.
The Board will continue budget discussions at future meetings, with an increasing focus on potential 2017-18 operating expenditures.

See the budget presentation



Board Discusses School Funding - 3/7/17
School Finance Revenue Overview
As RISD heads into the process for building its 2017-18 operating budget, CFO David Pate provided trustees with an overview of the Texas school finance system, and specifically how revenue for RISD is determined. Highlights included:
  • In RISD, local revenue makes up 62% of total operating revenue and is generated primarily from local property taxes. 36% of RISD's revenue comes from the state, with about 2% coming from federal sources.
  • The number and characteristics of students served impacts how much revenue RISD receives from state sources.
  • Just over half (50.4%) of RISD's local tax revenue is generated from residential properties, with the remainder coming from commercial properties, which includes multi-family housing complexes.
  • As property values increase and the amount of taxes paid increases, even though the tax rate may remain the same, school districts like RISD are not permitted to keep the increased operating revenue beyond the initial year. Instead, under Texas law, those operating tax dollars are retained by the state through reduced payments to the school district.
  • School districts do retain increased revenue from property value increases on the smaller portion of the tax rate ($0.35 in RISD) dedicated to paying off bonds.
  • Operating funds are generated from the operating tax rate, which is currently at $1.04. Operating funds are typically used to cover the short-term expenses of operating the district, primarily teacher and employee salaries, followed by energy/utility costs.
  • The portion of revenue generated for debt service (bonds) may only be used to make payments on outstanding bonds. Voters authorized the issuance of bonds to pay for long-term capital items, like renovations, equipment and construction, and may not legally be used to pay for operating expenses.
  • If RISD were to request additional revenue from taxpayers to pay for operating expenses (such as a teacher raise), a tax ratification election would be required. For each of the next two pennies the operating tax rate increased beyond the current $1.04 rate, $2.1 million of operating funds would be generated, in addition to another $3 million of state funding coming to RISD. Any increase in the operating tax rate beyond $1.06 would yield no additional state funding and also trigger RISD having to pay a portion of the funds raised to the state in the form of recapture, or "Robin Hood" payments.
Mr. Pate summarized that RISD could benefit substantially under the Texas school finance system if the operating tax rate were increased by no more than two cents, to $1.06. Each penny of tax rate up to $1.06 is known as a "golden penny" because it comes with an extra $3 million of state funding in addition to the $2.1 million it would raise from RISD taxpayers.

Trustees will continue to discuss 2017-2018 budget planning at future meetings.

See the presentation
     
 
 
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Budget & Finance
420 S. Greenville Ave.
Richardson, Texas 75081
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Budget Planning
The system that the State of Texas has set up to finance public schools is complex and outdated. Many elements haven’t been updated since the modern funding system was put in place in the 1980s. This page is intended as a resource for stakeholders to understand how RISD is funded and to be able to follow discussions and developments related to RISD’s operating budget, sources of revenue and expenditures. Students, parents, staff and taxpayers are encouraged to ask questions about the budget process.
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