School districts rework budgets after tax rate proposals denied

It's back to the financial drawing board for several school districts that had their requests to raise taxes denied.

Of the seven school districts in the Rio Grande Valley that asked voters for a pay raise, only Roma garnered voters' support. Voters in that school district approved a 13-cent increase in the property tax rate in October, bringing the new overall rate to $1.36 per $100 of a property's appraised value.

The Mission, Edcouch-Elsa, Santa Maria, Santa Rosa and Lyford school districts, however, must now tweak their budgets.

The Hidalgo school system was in the best financial shape of the several that called for the tax increases. That district's school board had already approved a balanced budget but asked for the tax increase to give employees pay raises.

The Hidalgo district's overall tax rate remains at $1.32 per $100.

Other school systems aren't faring so well.

Officials from several districts said it has gotten harder each year to stay afloat financially because the state capped how much it gives schools at what it paid them in the 2005-06 or 2006-07 fiscal years, whichever yielded more money for them. The state gives districts money based on student population and reduces how much it gives them by how much more money the districts can generate locally.

About 500 fewer students are attending the Mission school district than what it projected at the beginning of the year.

That means the school system will likely receive about $4.4 million less from the state this year than it expected. That's in addition to the $4.6 million deficit the district faced this year.

The district is mulling over what can be cut. It already decided not to purchase new buses and maintenance vehicles, and it plans to review vacancies before deciding to fill them, as well as eliminate some elementary school teaching positions through attrition. Those cuts would shave about $1.2 million from the budget.

The district also might have to dip into its savings to pay some bills this year, said Connie Lopez, the school system's chief financial officer.

"This is devastating to us," Lopez said after a recent school board finance committee meeting.

The district managed to save about half a million dollars in electricity costs this school year because of rate and consumption decreases, according to district officials.

The Santa Rosa school system had to eliminate 11 positions and make cuts in various programs to make up for the $800,000 revenue shortfall in its $11 million total budget, Superintendent Heriberto Villarreal said. The district's general fund is $1.26 million.

"Not a whole lot of fun," Villarreal said of the situation.

The district realized it was in financial trouble over the summer as it was preparing its budget for the current 2008-09 fiscal year. It had lost a few students, which meant it would receive less state money.

Districts receive money from the state based on their student populations as well as generate money through the taxes they levy. But the extra money from local taxes comes with a proviso: Whatever new money districts can earn locally is offset by an equivalent reduction in state funding.

"We realized we wouldn't make it through the year (without a tax-rate increase)," Villarreal said. "We knew all along we would have to make cuts."

His district eliminated administrative positions and personnel for special projects, he said, but no classroom teachers were eliminated.

The school system is waiting to see what the Texas Legislature does this next session about funding formulas for schools before the district decides whether it will seek another tax-rate increase next year, Villarreal said.

The Santa Rosa district's total tax rate remains at $1.30 per $100 of appraised property value.

Edcouch-Elsa's financial woes worsened after voters turned down its proposed 13-cent rate increase. That district had prepared its budget in hopes of having that measure pass, but now it must grapple with a $3 million deficit.

This is the latest of Edcouch-Elsa's money troubles. The Texas Education Agency appointed a conservator to oversee the district's finances after citing it for not saving enough money and hiring too many employees.

Edcouch-Elsa also had to take out a $3.5 million loan over the summer to pay day-to-day expenses.

The district must now look at budget cuts, which could include salary caps and layoffs, Superintendent Michael Sandroussi said last week.

Officials from the school districts said they're waiting to see if the Texas Legislature will address school finance when it reconvenes in January.

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Monitor staff writer Jeremy Roebuck and Valley Morning Star staff writer Fernando Del Valle contributed to this report.

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Jennifer L. Berghom covers education and general assignments for The Monitor. She can be reached at (956) 683-4462.