The Texas Education Agency (TEA) and other entities (Texas Association of School Boards, Texas Association of School Administrators, etc.) are diligently working to interpret, define, and quantify HB3 and the impact on districts throughout the State of Texas. Here is what we know for Lovejoy ISD:
- Property Tax Relief – Your Lovejoy ISD Maintenance and Operations (M&O) property tax will decrease from $1.17 to $1.06 per $100 of valuation.
- Local Revenue Cap – The State is capping Lovejoy ISD’s revenue growth from property values at 2.5%. Meaning when your property values increase by 2.5% or more Lovejoy ISD must compress the M&O tax rate so that local revenue does not grow by more than 2.5%.
- School finance experts are concerned when Texas school districts receive less local revenue, as the State must make up the difference. Unfortunately, by limiting local revenue the cost to the State will grow by billions of dollars every year, with no identified source for replacing that revenue. This will likely push the State into a painful budget shortfall which will likely result in severe education spending cuts similar to those following The Public School Finance and Property Tax Relief Act of 2006.
- State Dollars – The State is adding funding to “make-up” for the reduction in local property taxes. However, there is concern the State’s plan is not sustainable and is likely to lead to future cuts in education similar to the drastic cuts following The Public School Finance and Property Tax Relief Act of 2006.
- Teacher Pay – School districts are required to spend 30% of any State funding increases on compensation for teachers, nurses, counselors, and librarians (with priority for those with 5 years of experience or more). There are no compensation requirements for support staff such as teacher aides, bus drivers, custodians, cafeteria workers, and office staff.
- Recapture (Robin Hood) – The State will reduce Lovejoy ISD’s recapture payments, allowing those funds to remain in the district and help fund the property tax relief.
We are waiting for the final numbers from TEA; however, we estimate Lovejoy ISD will have a total loss in revenue of approximately $3 million dollars, which will increase our 2019-2020 deficit to approximately $4 million dollars.
Additionally, we are required to pass a budget by June 30, 2019, and we must account for decreases in expenditures and increases in revenue sources to fund the budget. We have worked collaboratively with the Board over the last seven months and with increased vigor over the last two months to develop budget options for this scenario. To make up for the lost state funds, the budget under development includes:
- Program changes that resulted in reducing ~ 20 staff positions
- ~ $300,000 in cuts to Central Administration Budgets
- Use of $1.1 million from fund balance
- Reinstate parent paid "fee for service" for bus transportation and extracurricular participation
In prior years, Lovejoy has taken bold steps to offset the loss of state funding by cutting as far away from the classroom as possible, cutting as many non-personnel items as possible, adding new sources of revenue, and initiating other significant austerity measures. Because over 80% of the district’s budget is in personnel; unfortunately, staffing is the only area left to cut to make up for the lost state revenue. Over the past two months the Board and Administration have had to make the very difficult decision to change programs to reduce staff. Staff reductions will cause some reorganization, which means there will be some re-tooled positions as we restructure for a more cost-effective, leaner model in the impacted areas. Our primary focus, as we face this tough challenge, remains to provide quality academic instruction with more limited resources. Make no mistake, staff reductions will have an effect on Lovejoy. When impacting someone's profession, career, and livelihood, it is very emotional and agonizing. We know and care for these educators. As we restructure, the District will strive to make the most effective use of our more-limited resources, and we will continue our efforts to provide an excellent student experience.
The district has worked strategically to develop innovative sources of revenue. These revenue producing programs are currently contributing ~ $ 2 + million dollars to our revenue stream outside of state funding, including:
- Transfers with Tuition
- Tuition based Pre-K program
- Summer Enrichment offerings
- Elementary Campus Camp Outs
- SAT Prep Courses
- Advertising Partnerships at the Stadium and Competition Gym
What were the program changes that resulted in reducing staff positions and how much does that save?
The following four program change areas will save ~ $1,500,000
- Central Administration Student Support Services
- WSMS Course Delivery Structure (students move from an 8 period day to a 7 period day)
- Campus Based Student Support Services
- K-2 Gifted & Talented Structure (curriculum will be differentiated by the homeroom teacher)
After we use $1,100,000 from fund balance, will the fiscal well-being of the district be protected?
Yes, with the utilization of $1.1 million from fund balance, we will have sufficient funds to cover cash flow in the fall semester until tax payments begin to come into the district.
What is the proposed "fee for service" for bus transportation?
The preliminary fee for bus service will be similar to the amount passed in June 2017 at $350, per student, for a full school year. This breaks down to $2 per day to ride the bus to and from school.
What is the proposed "fee for service" for participation in extracurricular activities?
The per student proposed extracurricular fee for athletics and fine arts will be less than those passed in June 2017. The preliminary fee amounts are $350 for grades 9-12, $250 for 8th grade, and $150 for 7th grade. Additionally, there has been consideration for a family fee cap, but an amount has not yet been established. The fee will cover all activities regardless of the number of sports and fine arts activities in which students choose to participate. The district will offer hardship waivers and/or scholarships if necessary to ensure no student is denied participation.
You are welcome to join us for the Board Workshop on Monday, June 24th at 6:00 PM and the public hearing and Board Meeting Wednesday, June 26th at 7:30 PM in the Lovejoy Elementary Gym.
With respect and admiration,
Dr. Dennis Womack
LISD Interim Superintendent