GISD balances budget, lowers tax rate

A balanced budget and lowered tax rate were adopted by the Graham ISD Board of Trustees following a public hearing this week.

The board tasked GISD Business Manager Don Davis with balancing the budget before adoption Wednesday, Aug. 28. In a budget workshop Wednesday, Aug. 14, the board approved a proposed deficit budget with a request to amend the budget to be balanced with anticipated revenues.

“Just an update from our last board meeting, per the board's request, I increased the revenues that we've discussed in that meeting (to balance the budget),” Davis said Wednesday.

A tax rate of $0.9888 per $100 valuation was adopted, which is a little over a three-and-a-half cent drop from the current tax rate of $1.0239 per $100 valuation. 

The tax rate is made up of two separate rates: the maintenance and operations (M&O) rate and interest and sinking (I&S) rate, or the debt rate.

“(For the M&O rate) the state has a formula that it takes your prior year certified values and your current year values, and if you have growth, then that growth is going to drop your tax rate and the tax rate that it drops it to should equal a levy that would gain you equal taxes from the prior year,” Davis said.

The district has in the past redeemed their bond payment early and will continue that trend for the upcoming year. The district will be redeeming a bond payment of $1.49 million which is beneficial because it will not increase the I&S tax rate above the current $0.3106.

“We're paying off interest faster by doing this. We're lowering the tax rate three-and-a-half cents. We're paying off the bond faster. We're lowering the interest we're paying on the bond, while keeping the 31-cent capacity for the future bond,” Davis said.

Davis said Aug. 14 that the deficit budget was proposed due to the district receiving a second payment of $1.1 million from the Senate Wind farm project, in addition to $219,000 payments over 10 years.

“So the $1.1 (million) is going to be realized next year (in January), in addition to any other... revenues, for example, delinquent taxes, I think that was over $100,000,” Davis said. “So what that means at the end of next year, unless the board chooses to spend additional money, it should be a balanced budget.”

In regards to balancing the budget, Davis said his estimates could come under what was budgeted.

“The revenues that I put in state funding could be less, because if enrollment goes down, then those could be less, and we're trending down,” he said. “So... just to be cautious I budgeted on the same number of refined ADA (Average Daily Attendance), but if that goes down, then the revenue will go down.”

Unlike enrollment, the refined ADA is the number of students counted each day within a 15-20 minute period and determines the state funding received by the district. 

Student enrollment since 2013 has trended downward from 2,552 in 2013 to 2,175 in 2024, with occasional increases year over year. Refined ADA also is showing a downward trend from 2014, with 2,378 in 2014 and 1,996 in 2024, with occasional increases year over year.

The district had $3,009,807 in revenue over what they budgeted for 2023, but also had $5,599,311 in expenditures over what was budgeted. In total, the district is $2,589,504 over what was budgeted for 2023 and that funding has been budgeted from the fund balance.

“I'm projecting that... we're going to reduce the fund balance by about $2.6 million,” Davis said.

That follows a trend that also extended to tax collections and state funding for 2023, which were under what was budgeted.

“I had budgeted for tax collection... $6.291 (million and) we collected $355,000 less. In state funding we collected $152,000 less than what I budgeted. So that's the example of... what we're going to receive could be less,” Davis said. “...I know that we have some outstanding collections. We're probably going to collect those. They may be delinquent. And we don't know that about the appeals yet, because we're budgeting on without knowing the appeals they're going to be approved, and there's a lot of appeals out there.”

In the proposed budget, the instruction line item is increasing from $13,324,571 to $14,240,709. That line item has categories for salaries, supplies, travel and contract services.

Elementary and Secondary School Emergency Relief (ESSER) was federal emergency relief funds to address the impact COVID-19 had on elementary and secondary schools. Purchases under that funding have been absorbed into the budget.

“The biggest increases (in the budget) are in additional staff and raises and that accounts for... $2 million. We were using ESSER money to pay for some reading interventionists and mentors. We were using it for two half-time diagnosticians, and they were on contracted services, and we are moving them over into the budget. And then the curriculum money that was used in ESSER was for NWEA math and Eduphoria. So those are the increases in ESSER that we've absorbed,” Davis said.

Salaries in the instruction portion of the budget make up $13,300,000 of the $14,240,709 proposed in the budget.

The proposed budget has $28,865,210 in revenues and expenditures, which was adjusted from the previous proposed deficit of $1,357,425. Expenses increased $1,385,325 in the general fund, $72,130 in the athletic fund and $71,970 in the food service fund. General fund revenue over expenditures is still a positive $54,630.

The total revenue consists of $11,661,231 from local and intermediate sources, which includes $6.1 million for tax collections and $1.3 million in wind farm revenue. Along with these revenues are state program revenues of $15,999,882 and federal revenue of $1,204,097. 

Additionally, GISD is required to approve the North Central Texas College tax rate which was adopted at $0.042367 per $100 valuation, an increase over the current rate of $0.040390.