Round Rock ISD Board adopts 2018-2019 budget

The Round Rock ISD Board of Trustees approved a budget of $445.4 million for the 2018-2019 year at its June 21 regular Board meeting.

Taxpayers will contribute an additional $27.8 million in tax collections for the General Operating fund during 2018-2019 as compared to updated estimates for 2017-2018. That additional revenue is offset by $32.3 million in Chapter 41 recapture payments that must be made to the state of Texas, leaving minimal additional revenue. On average, $277 of a Round Rock ISD homeowner’s tax payment is sent to the state to cover the Chapter 41 requirement.

Texas school funding currently operates under a recapture or “Robin Hood” system, where districts deemed “property wealthy” must send money back to the state to be distributed to districts deemed “property poor.”  As property values have gone up in Texas, state funding for schools has gone down—and now Round Rock ISD must send money back to the state because of rising property values. Recapture payments are intended to go toward other school districts, but, in effect, simply reduce the amount of funds that the state contributes to public education.

While the Board of Trustees has decreased the debt service portion of the tax rate over the past five years, the Board is limited in its ability to adjust the maintenance and operations tax rate which represents 80 percent of the total tax rate.  So with many homeowners property values increasing, even with a reduced total tax rate, the amount paid for school taxes has increased. Unfortunately, the state of Texas is the beneficiary of those value increases, not Round Rock ISD.

“As the only school district in Texas to earn a AAA Credit Rating by both Moody’s and Fitch, Round Rock ISD has maintained a legacy of dedication to financial planning and efficiency, which has prepared us to weather budget challenges due to escalating costs and limited support from the state,” Superintendent Steve Flores, Ph.D. said. “We will continue to manage our resources wisely and provide a world-class education for our students, but we also would encourage our state legislators to prioritize education funding and invest in a fair school finance system that does not pit districts against each other.”

Overall expenditures will increase by $31.7 million, largely attributed to Chapter 41 payments, which increased by $22.6 million from the previous year. Also, a factor is $5.8 million in salary increases for all employees approved by the Board in May.

Other significant expenditures include an additional $2.3 million for increased staff in anticipation of enrollment growth. Round Rock ISD expects to grow by more than 660 new students for the 2018-2019 school year.

“As Trustees, we are dedicated to supporting the students and staff of Round Rock ISD while serving our community taxpayers by remaining financially responsible,” Board President Diane M. Cox said. “I commend the District’s finance department and my fellow Trustees for working together to develop a budget that ensures we operate in the best interests of our students and community.”

As part of the budget, the District will be operating at a projected $4.45 million, one-year deficit that Flores said will be manageable. Adopting a budget with a slight deficit is not unusual—many districts use this accounting tactic—and in Round Rock ISD the deficit has never been realized. Due to prudent financial management, the District generally spends no more than 97 percent of projected expenses. If that trend continues this year, the deficit will not be realized.

The Board will vote on a tax rate during the August meeting, with the projected rate remaining the same from 2017-2018, $1.30 per $100 valuation.