Where all students connect, learn, grow and succeed. 2018-19 TAX RATE HEARING August 20, 2018 Providing the resources required to accomplish our mission.
AGENDA • Our Mission and Strategies • General (Operating) Fund • Tax Ratification Election (TRE) • Next Steps Where all students connect, learn, grow and succeed. 2
RISD – SUCCESS FOR ALL STUDENTS BALANCING FINANCIAL RESPONSIBILTY OUR GOAL FINANCIAL AWARDS All RISD students graduate • • One of seven Texas Financial earning admission to the Honor Roll Districts college or university of their Superior Rating from Texas • choice State Comptroller – 11 - or – years running Enter the workforce in a • • AA+ / Aaa bond rating career that pays a living wage Where all students connect, learn, grow and succeed. 3
SUCCESS FOR ALL STUDENTS… We believe that success for all students is a product of: • Great teachers • Small class sizes • Safe and enriching environments Where all students connect, learn, grow and succeed. 4
WHAT BROUGHT US TO THIS POINT? • RISD state funding has been declining. • Operating expenses have increased over the last 5 years. • Salaries and compensation • Additional classroom and special ed teachers • Innovative academic programs • Cost of operating neighborhood schools • 2017-18 budget had a deficit of $6.3 million. • Deficit at $1.04 M&O tax rate will increase over the next five years as state funding continues to decline. Where all students connect, learn, grow and succeed. 5
OUR MISSION & STRATEGIES MISSION STRATEGIES The mission of RISD is to ensure that ALL • We will ensure that we have diverse and engaging programs connect, learn, grow and succeed through and learning opportunities to meet the unique needs of all our relevant and personalized learning experiences students. distinguished by • We will guarantee that all students will perform at or above • a welcoming and accepting climate grade level. • a safe, innovative, and adaptive environment • We will recruit, retain, and reward quality personnel. • a supportive, collaborative, and invested • We will ensure that ALL families, businesses, and community culture among students, staff, families, and partners are fully engaged in the mission of our district. community • We will actively pursue creative funding sources and responsibly manage current resources to support our mission. • We will ensure that our facilities and infrastructure adapt to support our mission. Where all students connect, learn, grow and succeed. 6
Community Recommendation: “RISD Needs More Funding For Schools” Strategic Planning Finance Team Conclusions/Recommendations Engaged 300+ community members to develop a five-year strategic plan. • Strategic Plan Finance Team charged to analyze district finances, • conduct benchmark comparisons and make recommendations. Neighboring Description Richardson ISD Districts Operating Spending per Student $8,155 $7,717 Operating Tax Rate $1.10 $1.04 English Language Learners (ELL) 20.2% 25.8% Economically Disadvantaged 49.1% 54.0% Special Education Students 9.3% 11.0% Where all students connect, learn, grow and succeed. 7
Action Team Conclusions • Our current financial structure is inadequate to accomplish the district’s mission. • While we need to ensure our operations are as efficient as possible, we cannot solve our financial issues through cost-cutting. We are currently spending over 5% less per student than our North TX and statewide peers, despite having students • with greater needs [ELL +30% / ED +15% / SPED +16%]. This disparity is not caused by investment decisions, but lack of funds; our M&O tax rate is $1.04 compared to average • of $1.12 for our North TX neighbors (before homestead exemption). Without some change in our revenue stream, our fund balance will be gone by 2021. • • We have little control over legislative outcomes regarding school finance; we cannot count on additional funding in the near term. • We need to take immediate actions that will increase sustainable sources of revenue in order to accomplish the district’s mission. Where all students connect, learn, grow and succeed. 8
Where all students connect, learn, grow and succeed. General (Operating) Fund 9
General (Operating ) Fund Before and After REVISED FOR ADOPTED CERTIFED VALUE FY 18-19 FY 18-19 CHANGE Tax Revenue $ 249,290,336 $ 251,560,693 $ 2,270,356 State Revenue $ 67,966,325 $ 67,795,051 $ (171,274) Other Revenue $ 30,878,931 $ 30,878,931 $ - Total Revenue $ 348,135,592 $ 350,234,675 $ 2,099,082 Adopted Expenditures $ (333,449,313) $ (333,449,313) $ - Potential Expense Increase $ - $ (1,250,000) $ 1,250,000 Recapture $ (5,869,577) $ (5,940,408) $ 70,831 Other Uses $ (1,000,000) $ (1,000,000) $ - Change in Fund Balance $ 7,816,702 $ 8,594,954 $ 778,251 Unassigned Fund Balance as a % of Expenditures 24.5% 25.0% Where all students connect, learn, grow and succeed. 10
2018-19 Expenditure Summary RECURRING RECURRING STRATEGIC PLAN TOTAL GENERAL FUND DESCRIPTION Current Commitments Additional Staff Allocations $ 1,056,413 $ - $ 1,056,413 Compensation 2.5% Raise; Market Adjustment $ - $ 6,670,000 $ 6,670,000 Instruction Special Student Services Staffing $ 4,301,539 $ - $ 4,301,539 Safety and Security Audit; Additional SRO's; Director $ 427,546 $ 129,200 $ 556,746 Facilities Facilities Department Supplies $ 223,500 $ - $ 223,500 Transportation Bus and Camera Replacement $ - $ - $ - Expenditure Reductions Reductions and Eliminations $ (600,000) $ - $ (600,000) Total Expenditure Increase $ 5,408,998 $ 6,799,200 $ 12,208,198 Transfer to Enhancement Fund $ 1,000,000 $ 1,000,000 Recapture $ 5,869,577 $ 5,869,577 17-18 Adopted Expenditures $ 321,241,115 18-19 Adopted Expenditures $ 340,318,890 Compensation and other increases contingent on passage of Tax Ratification Election Where all students connect, learn, grow and succeed. 11
$1.17 M&O Tax Rate Sustainably Funds Operations Expenses Revenue at $1.17 Revenue at $1.14 Revenue at $1.10 Revenue at $1.04 $355,000,000 $345,000,000 $335,000,000 17-18 Operating Expenses $323 million $325,000,000 $315,000,000 $305,000,000 $295,000,000 $285,000,000 FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 One-time expenses $1,250,000 $4,750,000 $4,000,000 $2,250,000 $3,500,000 Where all students connect, learn, grow and succeed. 12
TAX RATE HISTORY $2.00 HB1: Tax Rate Compression $1.82 $1.82 $1.82 $1.81 $1.80 $1.80 $1.67 $1.65 $1.63 $1.63 $1.60 $1.60 $1.39 $1.39 $1.34 $1.34 $1.34 $1.34 $1.34 $1.34 $1.34 $1.34 $1.34 $1.40 $0.35 $1.20 $1.00 $0.80 $0.60 $1.04 $0.40 $0.20 $0.00 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 OPERATING DEBT SERVICE Where all students connect, learn, grow and succeed. 13
Impact of Tax Increase on Average Residence 2017-18 2018-19 Last Year This Year Increase Taxes Due to 2018 DCAD Value Increase $ 2,772.59 $ 3,265.44 $ 492.85 Tax Rate Increase $ 0.13000 Taxes Due to Recommended Tax Rate Increase of $0.13 $ 305.39 $ 305.39 $ 798.24 Note: Difference of 12 cents from newspaper notice of public hearing increase of $798.12 due to rounding. Where all students connect, learn, grow and succeed. 14
Where all students connect, learn, grow and succeed. Tax Ratification Election (TRE) 15
WHAT IS A TAX RATIFICATION ELECTION (TRE)? The Tax Rate consists of two components (per $100 of property value) Maintenance & Operations Tax Bond Tax Total Tax $1.04 $1.39 $0.35 • Sustainable revenue required to operate schools • Costs of infrastructure: new • Unchanged since 2007 facilities, renovations, etc. • Lowest rate since 1991 • Increased $0.05 in 2016 Where all students connect, learn, grow and succeed. 16
“I am paying more school property taxes. Doesn’t that mean the school district has more money?” As School Property Taxes Increase RISD gets property tax increase dollars ONE time … THEN $ State Funding decreases the next year Where all students connect, learn, grow and succeed. 17
WE Are Paying A Bigger Share of Funding for our Schools Local Share of Funding State Share of Funding 100% 90% 80% 85% 84% 82% 79% When property values go 75% 70% 71% up, state aid goes down. 67% 60% 63% 50% The only way to get more 40% revenue per student is to increase the tax rate or 37% 30% 33% hope for legislative change. 29% 20% 25% 21% 18% 16% 15% 10% 0% 2016 2017 2018 2019 2020 2021 2022 2023 Where all students connect, learn, grow and succeed. 18
2017 TAX RATES – NORTH TEXAS PEERS DISTRICT M&O I&S Total WYLIE ISD (COLLIN COUNTY) $1.17 $0.47 $1.64 MCKINNEY ISD $1.17 $0.45 $1.62 GRAND PRAIRIE ISD $1.17 $0.43 $1.60 ALLEN ISD $1.14 $0.43 $1.57 MANSFIELD ISD $1.04 $0.50 $1.54 FRISCO ISD $1.04 $0.42 $1.46 GARLAND ISD $1.04 $0.42 $1.46 MESQUITE ISD $1.04 $0.42 $1.46 PLANO ISD $1.17 $0.27 $1.44 ROCKWALL ISD $1.04 $0.40 $1.44 IRVING ISD $1.17 $0.26 $1.43 RICHARDSON ISD $1.04 $0.35 $1.39 CARROLLTON-FARMERS BRANCH ISD $1.17 $0.21 $1.38 ARLINGTON ISD $1.04 $0.33 $1.37 DALLAS ISD $1.04 $0.24 $1.28 Where all students connect, learn, grow and succeed. 19
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