A Look at LGISD Budget Planning

The La Grange I.S.D. Board of Trustees began preparations for next years budget at a meeting last Monday, July 18.

“Budgeting is tough, because we have to try and predict what’s going to happen this time next year,” said the district’s director of finance, Diana Fitzpatrick. “What are gas prices going to be? It makes it difficult - the volatility of prices.”

The school gets funding from three major sources. Fitzpatrick said LGISD gets about 70 percent of its revenue from property taxes. About 20 percent of the district’s revenue comes from state and federal funds. The remainder comes from other local sources such as facility rentals, donations, auction proceeds and ticket sales for athletic events and other school functions.

Fitzpatrick told the trustees that Texas House Bill 3, which passed in 2019, changed the state’s funding formula in a way that was supposed to bring public schools more revenue. That hasn’t been the case for La Grange, she said.

“As taxes go up, aid from the state goes down,” Fitzpatrick said. “So unfortunately what happens is that the total dollar amount that a district receives from this new funding formula does not increase enough to keep in step with funds that are needed for pay raises and the increased cost of goods and services.”

State funding is tied to enrollment and attendance. Fitzpatrick said enrollment at LGISD has dropped slightly every year since Hurricane Harvey in 2017. Last year’s enrollment was down 30 students, a decrease of 1.5 percent.

Also, she said the state formula provides extra funding for special needs student and gifted and talented (GT) students, since those students receive extra services.

Taxpayer protections passed as part of House Bill 3 limit the amount by which a school district can increase its tax rate for maintenance and operations (M&O). Fitzpatrick said her preliminary calculations indicate that the school’s maximum M&O rate for next year would drop to $0.9341 per $100. The current M&O rate is $0.9534. (The school district’s current total tax rate is $1.1470, which includes a debt service rate of $0.1936).

Based on that tax rate, Fitzpatrick projected revenue of $17.16 million next year.

Fitzpatrick said state school funding laws would allow LGISD to add an extra penny to the tax rate with a simple majority vote of the school board. She said the district has never exercised that option. If the board chose to do so, Fitzpatrick said it would generate approximately $140,000 next year.

“That’s something you may want to look into,” Fitzpatrick told the board.

Fitzpatrick said she hoped to present a draft budget to the school board at the next budget workshop, scheduled for Aug. 29. The school board accepted her comments but took no official action on the budget.

In other business, the board voted unanimously to change their August meeting date from Aug. 15 to Aug. 29 in order to give staff additional time to work on the budget.

The board also voted unanimously to approve an agreement with IQS, Inc., the company that provides custodial services to the district. According to the agreement, the school will pay IQS $740,929.27 for cleaning and custodial services at the two school campuses and administration complex.