Lewisville ISD will be faced with several decisions in the coming weeks as it prepares its budget for the 2020-21 school year.
During a work session last week, Superintendent Kevin Rogers updated the Board of Trustees on early projections for the coming year.
Based on preliminary numbers the district is projected to have a deficit of $15 million to $21 million in 2020-21, though Rogers said that number is a conservative estimate, is likely to go down in the weeks ahead and that the district usually erases the deficit by the end of the school year.
One question the board must decide is the employee compensation package. The preliminary budget includes a 2-percent compensation increase.
While no vote has been taken on compensation, board members expressed different views at the work session.
Trustee Tracy Scott Miller said he will push for a 3-percent pay increase. Miller said he also wants the compensation discussion to include actual percentage increase versus increases from the salary midpoint.
Trustee Kristi Hassett said it may not be feasible to offer a 3-percent increase.
“Knowing that salaries are a year-after-year expense, I want to be cautious about using fund balance to pay for salaries,” Hassett said.
Rogers said most of the surrounding districts are proposing 1- to 2-percent pay increases.
Discussion on the compensation will take place at the June 10 work session.
The tax rate is also to be determined. Rogers provided possible tax rate scenarios, adding that it’s still early in the process.
He said based on the assumption of a projected 8-percent increase in property value, the sale of bonds in the summer and the use of a fifth “golden penny” allowed by the State Legislature last year, the district could propose a total tax rate of $1.3101 per $100 valuation. That would be a decrease of this year’s rate, which is $1.3375.
Broken down, the maintenance and operations (M&O) rate under that scenario would be 93.26 cents, a decrease from 97 cents, and the interest and sinking (I&S) rate would be 37.75 cents, an increase from 36.75 cents. A lower growth rate would mean a higher I&S rate.
The board must also decide is if it will make use of the fifth “golden penny” when determining its tax rate, which would bring in $4.2 million.
Miller urged the staff to develop a plan on expenditure reductions because of the unknowns surrounding the pandemic going forward.
“I think that's the responsible thing for us to do as a board,” Miller said. “What is it we can do from the bond projects perspective? Maybe we have to say, 'Because we've gone through a global pandemic, is there a project or two we're going to have to stop or put on hold for the fourth year and reduce the amount of bonds we sell so we don't increase our (I&S) tax rate?'”
Rogers said it would be easy to come up with a list of cuts but said he’s not convinced that’s needed.
Still, he said the pandemic has created several budget unknowns, including possible state budget cuts, tax collection rates, enrollment projections and local property values. Rogers said there are three funding templates being used. He said the CARES Act will also be a factor.
But some things are known. LISD’s recapture payments are expected to be $15.7 million, which is $3 million less than previously.
Rogers said LISD is projected to receive $3.9 million less in revenue from sources such as tuition fees, facility rentals and interest revenue because of the shutdown.
New state requirements will result in more expenditures, including full-day pre-kindergarten at about $3 million.
There is a growth of approximately 1,200 students in special education, which will result in an additional $2.5 million in staffing.
The district plans to have budget workshops June 10 and Aug. 4. The board will adopt the budget and set the tax rate Aug. 24.
Certified property value rolls from the central appraisal districts will come in July 25.
Rogers said this year’s budget is projected to end with a $13.5 million deficit. But that includes the expenditure of $28 million a school bus fleet, a decision the board made last fall. Officials said it will save LISD money in the long run.