HISD rushes to OK budget

$2B plan boosts teacher salaries, special ed funds

The $2 billion budget approved by the Houston ISD early Friday not only contained one of the largest budget shortfalls in recent memory, it also was one of the most rushed.

The first firm budget numbers were presented to the Board of Education in May, and district finance officials were still tinkering with their final proposal 10 minutes before the Thursday meeting at which board members were to approve it. Even then, board members spent much of the nine-hour meeting offering amendments.

It included a $106 million shortfall, which

budget officials plugged by taking money from the rainy day fund they’re required to keep.

District leaders and trustees said Friday that many of the issues with this year’s budget boiled down to uncertainty over the legislative session, the looming bill for state recapture fees to subsidize districts that don’t take in a lot from property taxes, a lack of clear direction, and a host of new trustees and district leaders.

“I think everyone was focused on too many things this year,” acknowledged Glenn Reed, the district’s general manager of budgeting and financial planning. “It interfered with us really being able to have those conversations upfront to set the direction that the board wanted to follow. I don’t think it’s any one person’s fault; there was just so much going on and so many unknowns.”

Incremental pay raises

The budget, ultimately approved on a 8-1 vote, reflects a nearly $200 million increase over the current budget year and maintains the current total tax rate — about $1.21 per $100 of taxable property value. It will increase the amount the district collects for maintenance and operations but decrease the amount it collects in interest taxes.

The spending plan includes incremental pay raises for teachers, support staff and elementary school principals, though less than the 5 percent acrossthe-board raises that teachers and support staff wanted. An amendment that would have given 5 percent raises to all teachers and support staff was defeated 6-3, with Trustees Jolanda Jones, Rhonda Skillern-Jones and Wanda Adams voting in favor of the bigger pay boosts. Instead, the adopted budget will see teachers with five or fewer years of experience get a 2 percent salary increase and those with 16 or more years of experience receiving a 4 percent pay raise, along with similar incremental increases for others.

District budget officials had increased the amount set aside for salary increases from $26 million presented at a June 15 workshop to about $48 million Thursday after board members groused over the size of salary increases amid competition from suburban districts.

To help pay for larger pay raises, district officials cut funding for Superintendent Richard Carranza’s Achieve 180 campus turnaround plan by more than $8 million. And Board President Adams persuaded the board to adopt an amendment to cut $200,000 from a fine arts initiative to give a small raise to elementary school principals.

Carranza’s first budget

The board Thursday also added $2.2 million for the district’s special education department — included after Jones and Trustee Anne Sung raised questions about a lack of funding increases for a department that has faced scrutiny for failing to provide adequate services and testing to special education students. The money will pay for testing materials, nursing support, three parent liaisons, an autism program at three high schools and a senior program manager for the department.

The 2017-18 budget is the first to be brought forward by Carranza, who came to the district in September.

Trustee Anna Eastman was the only trustee to vote against the overall budget. She said she could not vote for a budget that contained a $106 million shortfall and would cause the district to dip below the amount it is required to keep on hand for emergencies. The district must keep about $275 million in its fund balance and will have about $308 million on hand for emergencies at the end of the 2016-17 fiscal year. But that number is projected to drop to about $246 million by the end of next year. Some of those reserve funds will be spent to give district staff raises.

She said she was surprised that the first preliminary budget was presented in May rather than in February, when it typically makes its debut, and that she only received a copy of the final budget proposal a couple hours before Thursday night’s meeting.

“It’s not totally unusual for there to be different opinions on the board on how to spend money,” Eastman said. “But what was unusual was there wasn’t a strong recommendation from the leadership for us to get behind as a group. The CFO and superintendent said they thought it would be irresponsible to add more to the deficit right before we voted, but it concerns me they were willing to say it at that point but not when they brought us a budget with that large of a hole.”

Reed said it was impossible to even come up with multiple worst-case scenarios earlier in the year because no one knew if the state would approve more funding for education, how much the district would have to pay in its multimillion-dollar recapture bill — now estimated at $77.5 million — or what specific direction the board wanted to move in.

On Friday, district staff and trustees made it clear that they planned to improve the budgeting process for the 2018-19 school year. They’re already planning to host budget meetings in August, about 10 months before the next budget will be adopted.

Trustees pledged to take a deeper dive into the budget to find fat and floated the idea of changing how the district currently funds its schools.

‘Did the best we could’

Sung, who joined the board in January, said there were great conversations about priorities between the June 15 budget workshop and Thursday’s vote, but she wishes those conversations had happened months earlier.

“When we go into the budget planning cycle next year, the board will already have clear goals, constraints and visions to help the administration prioritize spending,” Sung said. “I think we did the best we could this year without a fully adopted governance framework. But administration was trying to adjust for individual board members when we need to be much more coherent next year and will be.”