in Houston, Texas
Houston ISD must weigh cuts, other options in face of $35M budget deficit
Friday, Feb 24, 2012, 11:56AM CST
By Mike Cronin

A $34.7 million budget deficit in the upcoming academic year confronts the Houston school board.

The drastic circumstances mean that Houston school trustees must decide how they’ll balance the budget for the 2012-13 school year after they make a first round of cuts, said district Chief Financial Officer Melinda Garrett.

Their choices: a tax increase, additional budget cuts or drawing money from HISD’s general fund for a one-year fix, Garrett said.

That last option, however, would only ensure the current situation would replicate itself next year.

“It means dipping into emergency savings that are in the general fund,” said HISD spokesman Jason Spencer in an e-mail to Texas Watchdog. “It is one-time money, not a replenishing fund… At some point your savings are gone because, essentially, you are living beyond your means (spending more money than you make). It also leaves you vulnerable in case unexpected costs arise.”

Board President Mike Lunceford said Thursday morning he’s asked Houston Independent School District staff for a compilation of “everything we do and why we do it” before making any decisions. That’s a standard way of budgeting year-to-year in other organizations.

HISD has about $250 million in its general fund and roughly $80 million in its “rainy-day” fund, which is typically only drawn from during emergencies.

But district staff said dipping into both of those funding sources is possible, if the board would like to do so.

“For the first time ever,” the state failed to provide legally required funding to HISD during the current Texas legislative biennium, Garrett told trustees.

The district absorbs about $5 million a year due to a penalty incurred by the state because of HISD’s low tax rate, Garrett said.

District residents currently pay the lowest property taxes of all 21 Harris County school districts, HISD officials say.

“The tax rate of $1.1567 per $100 of taxable value is the lowest in Harris County, where the average school property tax rate in 2010 was $1.3996,” according to the district’s website. “HISD homeowners are also among the few in Texas who receive a 20 percent optional homestead exemption. This exemption is in addition to the standard $15,000 exemption given to all Texas homeowners.”

Spencer released a district statement quoting Garrett Thursday afternoon saying that an increase of the HISD “tax rate by 1.5 cents per $100 of a property’s taxable value would restore that $5 million in state funding and generate a approximately $15 million in local tax revenue.”

A 1.5-cent tax rate increase would cost the owner of the average HISD home valued at $197,408 about $21.44 per year, according to the statement.

In addition to the lack of state K-12 education money, Garrett said “skyrocketing” property insurance, declining or static HISD enrollment and a Texas-wide tax-relief shortfall for maintenance and operations of $4.5 billion also have contributed to the district’s deficit.

Garrett, HISD Chief Operating Officer Leo Bobadilla and other district officials presented the board with many options that would balance the budget.

“None of these are recommendations,” Garrett emphasized. The list she and her colleagues offered were simply paths to consider.

One way the board could balance the budget would be to reduce funding by $5 million to the district’s teacher bonus program, known as ASPIRE.

Other approaches include a 2.1 percent funding reduction to district departments that would save $1.5 million, cutting stipends for teacher development by $500,000 to $900,000 from $1.4 million, closing three facilities and moving the staff to the central office for a savings of $615,000 and no longer using 153 temporary buildings for another $600,000 in savings.

Another proposal on the table: A renewed attempt to standardize school bell schedules, including lengthening the school day by 19 minutes. A similar proposal last year proved controversial and was shot down, but the new plan would have high school students starting an hour later than last year’s version.

The revised schedules would enable the district to save about $1.2 million a year because bus schedules would become more efficient because the vehicles could drive more routes than they currently do, Bobadilla said.

HISD officials plan to seek parent input on the idea during the coming weeks, they said.

“There’s a lot more due diligence we need to do,” said Trustee Anna Eastman, the board’s vice president. “It’s so voluminous and complex, it forces us to do the due diligence.”

HISD now pays $3.3 million for property insurance “for less coverage,” Garrett said. The increase ranges between 47 percent and 65 percent, she said.

She and other district officials also said that enrollment now stands about 201,800 – down from about 203,000 in the last two years. Part of that decrease has occurred in bilingual and special education, Garrett said.

Bobadilla told board members that cutting the funding to HISD’s maintenance and facilities operations would bring consequences.

“You have to ask, what level of service do you want?” Bobadilla said.

Slashing that area of the district budget would result in more building breakdowns, slower response times by staff to problems and higher absenteeism due to problems such as asthma suffered by students because of structural hazards.


Contact Mike Cronin at or 713-228-2850. Follow him on Twitter at@michaelccronin or @texaswatchdog.

Photo by flickr user James Bowe, used under a Creative Commons license.

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