District’s year starts with $600,000 deficit

After being identified as property-rich and taking in less state funding this school year due to low property valuations, the Smithville school district’s proposed 2017-18 budget is starting with a $600,000 deficit after officials were unable to balance it.

The $19.8 million budget, approved Aug. 29, includes salary increases of 2 percent on average.

School board members Dareld Morris and Mike Davis voted against the budget, with Morris calling it “fiscally irresponsible.”

The deficit will be funded through the district’s fund balance, an account that maintains at least the state-recommended minimum of three months’ operating expenses. For the Smithville school district, that means $3.5 million.

After the drawdown, officials said the general fund will remain at $5 million or about 37 percent over the state-recommended minimum.

School district officials had presented the board with four budgets based on criteria school board members had requested. Five trustees voted to increase staff salaries during a special budget workshop Aug. 29.

Had school board members opted to freeze salaries, the district’s deficit would have been lowered to $379,000, officials said.

But with teacher turnover a concern, Trustee Grant Gutierrez said he was in favor of the salary increases because of the district’s long-term goal of increasing teacher retention rates.

The district’s four-year turnover rate is over 22 percent compared with 16 percent on average for the state. Morale and higher cost of living were also mentioned as motivations to approve the salary increases.

“The first thing you do is take care of the people,” Trustee Alan Hemphill said.

The school budget is $19.8 million, with about $16.5 million in general operating funds, $1.1 million for food services, $26,000 for the summer feeding program, $466,000 for materials and $1.6 million in debt service.

The largest portion of the general operating budget at 54.4 percent goes to instruction and salaries, followed by plant maintenance and operations at 11.2 percent, school leadership at 6.28 percent and school transportation at 5.26 percent, budget data show.

Except for a $176,000 increase in salaries, other departments are facing a 25 percent budget reduction, amounting to savings of more than $500,000 over the prior year’s budget.

For the first time in its history, the Smithville school district has been classified a property-rich district and lost more than $40,000 in school funding for the 2017-18 school year, officials said, despite more than 60 percent of its students being eligible for free and reduced-price lunches.

Under the Texas Education Code, the district will have to give up $40,667 to the state’s Wealth Equalization program, commonly referred to as the “Robin Hood” plan.

The school district is appealing a decision by the state comptroller’s office that cut state funding by $500,000 after the state agency found the district’s property valuations were too low from where the state thinks the valuations should be based on sales data.