Board of Trustees begin new budget creation process

The San Marcos Consolidated ISD is in budget mode once again.

At a special called meeting Monday at the San Marcos High School, one of the few agenda items was a scheduled budget workshop.

In the workshop presentation, it was discussed that the revenue projection for the 20222023 school year is currently in the range of $79 to $81 million, and the projection for the 20232024 school year is $84 to $86 million.

The reason for the increase in projected revenue over time is “due to the fact that the yield that’s earned on golden pennies has increased by the state,” Executive Director of Business & Finance Michael Doyle said. “The maximum compressed rate for an ISD that is set by the state of Texas plus whatever golden or copper pennies on top of that.”

For Doyle, money under discussion included what is now a complicated set of criteria that are imposed on local school districts by the state, among which are the various “pennies” that can impact school finances.

Doyle said, “As property value increases, the maximum compressed rate decreases, which is currently 80 cents. We have six golden pennies, and we can adopt up to 8 golden pennies and 9 copper pennies. Golden pennies are termed golden because they are not subject to recapture, so they are money that will stay within a district. They earn a yield or have a value. Our adopted M&O (maintenance and operation) rate is 86 cents. The yield of those golden pennies has increased from $98.56 this year to $126.21 for the 2023-2024 school year and will be $129.52 for the 2024-2025 school year. Which helps us generate revenue for the school district.”

What can be distilled from this, though, is that the use of golden pennies, as defined by the state, affects the budget dramatically.

There were two budget scenarios presented by Doyle at the meeting: a zero base plan and one with a $1,750 stipend for teachers. In the zero base plan, if all staffing remains the same, the salary cost would be $72,847,863 and maintenance and operations would cost $16,728,725, making the total $89,576,588. This plan would create a budget deficit of approximately $3.8 million, with the net change in the fund balance of approximately $10.5 million. The impact on the fund balance would be approximately $39 million–making the total unassigned fund balance approximately $15 million.

Doyle told the trustees and Superintendent Michael A. Cardona, that with the plan that carries a $1,750 stipend for teachers and a 2% increase for administrative staff, the salary cost would increase to $75,149,346, while maintenance and operations would stay the same and the total would increase to $91,878,071.

He said this plan would increase the budget deficit to approximately $6.1 million, with a net change in the fund balance of approximately $12.8 million with the total unassigned fund balance of approximately $12.7 million.

At-Large Trustee Dr. Mari Salmi asked to see a scenario in which there is a 2%increase across the board.

Salmi questioned whether the stipend to teachers would have a benefit over a pay increase. The benefit “would be receiving compensation,” Doyle said. “The other thought behind it is the increase in basic allotment, which, if that does come through, a percentage of the income has to go toward teacher payment.”

He explained that this is an item to be decided by the Texas Legislature, sometime in May or June.

“Last time that we gave a pay increase to the teachers ahead of the state, we didn’t get the credit for it,” said Anne Halsey, at-large trustee, who noted this could negatively impact the budget.

Cardona discussed a possible financial incentive for teachers to be based on outstanding performance. District 4 Trustee Brian Shanks said he agreed with that approach.

“There’s no incentive for the teachers that are doing really well to put in the extra work necessary for their students to do really well when they’re getting the same pay raises as teachers who aren’t putting in the same amount of work. And at some point, if we want things to change we have to try something different,” Shanks said.

Halsey said she disagreed and suggested incentivizing the positions that are hardest to fill in the district.

Salmi said she was open to the idea only if there were objective, clear and transparent measures presented to the teachers ahead of time.

She said she was “not really interested in the STAAR test being a part of that criteria.”