By SHELLY WILKISON
Teachers, administrators and hourly staff in the Liberty Hill school district may receive a pay increase in the new fiscal year if a $29,177,621 proposed budget is adopted by school trustees in the coming weeks.
The pay increase, which will cost about $500,000, is the largest new expense in the proposed budget that is 1.38 percent higher than the current year’s budget.
An increase in property values in the school district means the administration is not proposing an increase in the tax rate for Maintenance & Operations, but property owners will pay a higher rate to fund the district’s debt service as a result of a bond package adopted by voters in 2010.
In 2012, taxpayers will see a $0.115 increase in the tax rate on debt service bringing the rate to $0.41 per $100 property value. Last year’s debt service rate was $0.295 per $100 value.
The combined tax rate proposed for 2012 will be $1.45 per $100 of property value.
Business Manager Frank Watson said the average market value of a residence in LHISD increased to $259,102 — a $14,254 increase from 2011. As a result, the average property owner will pay an additional $619 in school taxes.
The district is projecting revenue from local property taxes at $16,748,069, revenue from the state at $8,160,708 and revenue from federal programs at $1,529,073, bringing the total revenues to $26,437,850 — a combined $1.66 million increase from the current year.
“We have an increase in (property) value. It’s not as large as we anticipated,” Watson said, adding that expected residential developments in the area did not materialize as planned last year.
“They (developers) didn’t go forward (with plans) because they were met with opposition from city government,” he said. “Because of the fussing and turmoil that was going on with the City, the water and the LCRA (wastewater treatment plant). One was told that the City would not be able to have water for them. So we had growth stymied at the same time that the economy slowed.
“All of that forced us to increase the tax rate more than we anticipated,” he said.
Watson said the same developers have recently said that with new cooperation from city government, they are returning to their plans for Liberty Hill.
“Growth is still coming, We do a demographic study quarterly and things are looking up for the area,” Watson said. “Growth will get us a larger base of people to tax to help hold the (tax) rates down.”
It has been two years since school district employees received a pay raise. The proposed increase in step pay will mean an additional $300-$700 for teachers, up to $1,000 for administrators and an hourly rate increase ranging from $0.10 to $0.50.
Watson said the pay increase still puts Liberty Hill salaries behind other school districts of comparable size or larger. However, there are other benefits to working in Liberty Hill ISD that keep the employment pool healthy, he said.
“We don’t want to jump up and reduce staff and hurt the curriculum,” Watson said. “We want to keep excellence in our programs and we do it by motivating needs over wants, and the staff has responded in a fantastic way.”
He said another cost saving opportunity to be considered by trustees is to refinance bonds from 1996 and possibly 2005 in order to lower payments.
Some school districts are still struggling to make ends meet after economic downturns in recent years. And some are having to resort to a Tax Ratification Election giving voters the final say as to whether their school district can raise the tax rate for Maintenance & Operations — the fund that pays for general operations of the school district.
LHISD can only raise the tax rate to $1.54 without having to go to voters for approval to increase the M&O rate. With adoption of the proposed $1.45 rate this summer that includes $0.41 for debt service, the district will be $0.09 away from the mark. Watson said state law caps the debt service rate at $0.50 per $100 property value.
“We don’t feel like at this time we can ask the public to do that at the same time they are supporting a bond issue,” Watson said. “We are operating within our means, and we are able to do that with the support of staff.”
Liberty Hill school trustees will meet at 6 p.m. August 20 in the LHISD Administration Bldg. to discuss the proposed budget and tax rate. The issues will be open for public comment.