LHISD closer to budget answers



Raises are planned for Liberty Hill ISD staff, but exactly what those raises will look like is still in question as district leadership works through the kinks of the new funding changes following the passage of Texas House Bill 3.

July is when Liberty Hill ISD expects to be able to make recommendations on teacher raises and other budgetary questions, as the financial picture becomes a little more clear each week.

The discussion at the last Board meeting opened with a look at school finance from the legislative perspective before getting more detailed in Liberty Hill specific numbers.

Jeff Frazier from District 20 State Rep. Terry Wilson’s office outlined how legislators believe they restored the balance of how education is funded in Texas.

“House Bill 3 was our biggest concern and our largest item and the reason for that was quite simple,” Frazier said. “In the Texas Constitution it makes it very, very clear that the State of Texas is responsible for providing for public education. We’ve used the school districts and local funding as one of the mechanisms toward that in the past, but as we learned it is a little bit too much on the local side.”

To help districts maintain some local control over funds meant for teacher raises, Frazier said the Legislature divided the funds.

“We are looking at about $2 billion in dynamic teacher compensation and that is designed to be flexible for the school districts to make more decisions (with the funds),” Frazier said. “We ended up with a compromise that says there is a base $2,000 teacher raise allotment for all teachers, and then the rest of the $4,000 overall teacher raise package is for the school district to work out for itself how it wants to handle the raises.”

In addition to adding funds for raises, House Bill 3 is lowering property tax rates – in Liberty Hill from the current $1.04 Maintenance and Operations (M&O) rate now down to $0.97 cents for 2020 and 2021 – and making up for that drop in local revenues with more state funds.

“The state has a lot more tools on its side to make up for tax burdens and spread out tax burdens than any local school district can, therefore it makes more sense for us to put more of that burden on the state level and provide relief from what (school districts) have to charge,” Frazier said. “As we put more funs in from the state level we can lower the amount coming from local taxes and still make sure you have a bump as well.”

What the numbers boiled down to, according to the Legislature, is a sizable gain for districts over the next two years.

“In 2020, you will be seeing a $3.5 million increase in M&O funding overall,” Frazier said. “That’s after we reduce the tax rate down to 97 cents and add in the state funds coming in. That’s $767 more per child in 2020 and then in 2021 we’re looking at $4.7 million which is a $957 increase per child.”

But the numbers were not as simple as that when Liberty Hill ISD began running calculations, leaving some question about the exact amount of funding increase the district would see.

Chief Financial Officer Jennifer Hanna drilled down into more specific numbers based on state formulas in conjunction with stipulations from HB 3 and told the Board the district was projected at this time to receive just over a $4 million increase in funding.

“Our M&O property tax revenues are projected to go down by $1.9 million, while our state entitlements are projected to go up by $3.2
million,” Hannah said. “That gives is a total increase of $1.38 million with our current projections.”

The other $2.6 million of the increase comes from growth projected in the district. Hanna explained that discrepancies exist between the Legislative Budget Board model and the State Aid Template due to issues of interpretation of assumptions and new data elements required for input.

“These numbers are changing very quickly as interpretations are coming out on the bill,” she said.

The numbers had already changed several times since the bill was passed, and district leaders were not sure how much it might continue to evolve.

“This is the third update we’ve gotten since the Governor signed the bill,” said Superintendent Steve Snell. “We have had problems just making the calculations work. We’ve gone from an increase of about $360,000 to now the $1.38 million. We’re happy with this, but keep in mind, the majority of the gains you see are just based on our values and our growth. We’re still working out the kinks of all the ins and outs of House Bill 3.”

He added that with budget planning and discussions already beginning, and the need to let teachers and staff know what raises would look like for the upcoming year, the district hoped to have firm numbers soon.

“We want to get the word out to our staff on possible raises,” Snell said. “You see other districts going out there publicly, and we want to make sure we get that number right. We want to make sure we give them as much as we can, but we don’t want to oversell our budget either, so as soon as we get those numbers we can believe in and actually use then we can get the word out to staff on what we would like to do on compensation and raises.”

Hanna said the lack of clarity on the numbers is why the district didn’t bring salary information to the board, which it usually does in June, but said in her presentation the district hopes to reach at least a 3 percent raise for all staff, a $50 additional monthly health insurance contribution, and an additional lump sum retention and recruitment stipend later in the year when all the numbers are clear.

Board member Clint Stephenson questioned the idea that the district was receiving so much more money from the state when budget projections showed that most of the increase came from increased local property values and growth projections.

“So to me, I don’t consider that as coming from the state, we’re getting that here,” Stephenson said. “When somebody tells me I’m getting $3.6 million, I think that’s what I’m getting.”

And Board President Clay Cole voiced his concern over the lack of clarity on funds with so many budget decisions looming.

“My concern is whether there will be a change in the last hour,” Cole said. “We make budgetary decisions based on the best information available, but at some point it seems like there has to be a time where we can’t make any changes after this so districts can make decisions on what they are going to do.”

Hanna said the plan is to have salary and benefits numbers approved by the board at the July 15 meeting and the public hearing and budget adoption at the Aug. 19 meeting.