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By Gabriella Beker

Decreased enrollment leads to decreased budgets in school districts.

That theme was the center of conversation at the Nov. 3 Budget 101 information session.

Throughout the session, Chief Financial Officer Eduardo Ramos shared grim projections for the upcoming fiscal year, and explained how the budget is affected by trends in the district’s local tax rate, student enrollment and recapture payments.

“When we started the school year, we knew we would be short in our overall sources of revenue by $43.6 million,” Ramos said. 

Ramos said that means the district will either have to make up that shortfall through fund balance — a savings account for the district — or reducing how much it spends through the school year.

Impacts of enrollment

While presenting the anticipated deficit for next year’s budget, Ramos highlighted that there are currently almost 3,000 fewer students enrolled in �鶹������ý ISD than projected. This will result in an additional $18.6 million loss, bringing the district’s total deficit to $62.2 million.

“When our enrollment is reduced or less than the amount we anticipated, the state considers us wealthier, and we have to send additional funds back to the state,” Ramos said.

Leaders from the Offices of Human Capital and School Leadership also foresee enrollment impacting staffing and programming across the district.

Participants were concerned that decreased enrollment would result in decreased staffing for students in special programs or receiving services like Special Education.

“Our formula is developed based on individual students,” Chief Human Capital Officer Leslie Stephens said. “Regardless of where the students are in the district, we try to make sure that campuses are getting additional staffing to meet some of the needs of the students.”

Recapture payments

One area that received attention Wednesday was recapture, which is how school districts are funded in Texas.

School districts with more taxable property values have to send a portion of the property taxes they collect back to the state. The state then uses that money to reduce what it has to pay to fund school districts without as much taxable property.

�鶹������ý ISD collects 94.6% of its funding from local sources, including property taxes. Nearly 50% of that amount is sent to the State of Texas as a recapture payment.

�鶹������ý ISD’s recapture payment has historically been nearly 6 times more than that of neighboring property-rich districts.

“As a school district, we send the highest recapture payment back to the state,” Ramos said. “When you look at all recapture payments throughout the State of Texas from wealthy school districts, �鶹������ý ISD sends about 25% of those total overall payments.”

Enrollment will also factor into the recapture payment. Because if a school district has high property values but comparatively fewer students, it's going to have to send more money back to the state.

“That’s what makes our budget even more challenging,” Ramos said. “Because our property values are continuing to increase as a school district just because of the �鶹������ý area market, and then we receive fewer students than anticipated.”

Next steps

Beginning in January, campus principals will work with Campus Advisory Councils to complete their campuses’ itemized budgets. Campuses will complete these by the end of March and the Board of Trustees will vote on a final budget in June.

The district will host a series of budget community conversations and feedback sessions, both virtually and in person, in January. Feedback can also be submitted until January 30, 2022 through the .