The tax rate adopted last month by the Gonzales Independent School District is the lowest the district has set in eight years, according to information shared by district administration.
In August, the GISD board unanimously set the tax rate at the voter approval rate of $1.0927 per $100 valuation, a decrease of 0.64 cents from the $1.0991 set the previous year. It marks the lowest the tax rate has been since the 2013-14 fiscal year, when the tax rate was 96.77 cents.
The total tax rate is broken down into the maintenance and operations (M&O) rate of $1.0092 per $100 valuation — which is the same as last year — and the interest and sinking rate (I&S or debt service), which is 8.35 cents, compared to 8.99 cents the previous year.
Due to House Bill 3 and Senate Bill 2, which mandated the compression of local M&O tax rates as a method of property tax relief, the $1.0092 is not only the maximum M&O rate Gonzales ISD can adopt, but it allows the district to make sure it is receiving the highest amount of state funding it can get.
The budget adopted by GISD trustees last month calls for general fund revenues and expenditures of just under $28.8 million, which represents a decrease of nearly $1.43 million in spending and $2.24 million in revenue from the previous year’s budget. The district is expected to begin and end the year with a fund balance of $11,677,467.
The district is expecting to take in $621,535 less in local property taxes, $294,906 less in other local funds, $1.11 million less in state revenue and $209,973 less in federal funding. In response, the district has cut instructional costs by more than $1.09 million from just under $16.57 million to just under $15.48 million.
The food service fund budget expected to be just under $1.65 million in revenues and expenses, leaving an ending fund balance of $276,424. And the debt service fund budget is expected to have revenues of just over $1.45 million as opposed to expenditures of $1.56 million, a variance of $105,588, which will bring the fund balance down from $658,382 to an ending fund balance of $552,794.
The debt service fund has a deficit due to a legal requirement that “the tax levy be reduced by the amount of excess collections received in the preceding year.” Excess collections are the amount by which debt taxes collected in the preceding year exceeded the amount anticipated; since there are an excess in collections, the debt rate had to be decreased by that amount.
“The biggest thing that I would like people to know is that we are collaborating a lot more as a districtwide entity than we ever have in the past,” said Amanda Smith, the chief financial officer for the school district. “We've always used decentralized budgeting where individual directors or principals have complete autonomy in how they utilize their monies. I say complete autonomy, obviously, we collaborate when there's new initiatives or big projects that come up. But we're being more proactive in that this year and doing it more extensively. We communicated more than we ever have to principals as to how their operating budgets are developed, that the number that they get to spend, we do it on a per student basis of our enrollment projections to make it fair and equitable.”
Smith said the district also took all departments this year to “zero-based budgeting,” meaning instead of getting the same traditional amount of money as in year’s past, departments had to justify and explain the amount of money they were requesting for their 2021-22 budget.
“In the past, we said, last year you operated your department on $20,000, so that's what you're getting, assuming nothing's changing,” Smith said. “Well, this year, we said, ‘You're not getting any money, you have to request every penny and justify — not just request but justify — the value in every expenditure you plan to make over the next year. We completely wiped the slate clean and history didn't matter.
“We wanted to know what were your goals for the coming year and are you going to use your money strategically and are you going to use it in the best interests of today's students? Because just because you made that purchase five years ago doesn't mean that is still needed today. Actually, education has changed a lot in the last few years. And so we were kind of challenging our directors to make sure they were keeping up with today's students. So, from day one, principals and department heads could charge in the direction that we wanted them to for the year.”
While the district has traditionally aligned its budget to district and campus improvement plans, it has not historically done so until after the budget was adopted, which always resulted in a large number of budget revisions which “always caused the start of school to not necessarily be headed in the direction we wanted to go for the year as a whole during this first few weeks of school,” Smith said.
This year, schools and departments had to be more in line with their projected expenditures starting the first day of school, Smith said.
“We were ready for that and it was the first year, so, of course, there's areas of growth and improvement, but for a pilot year, but it was really successful,” she said.
“One of our directors came to me after and said, ‘I thought this was awful and I thought you were crazy for wanting me to do this, but I'm so glad that I did this, because I know my budget better than I ever have. And I know that I've got what I need to make sure my kids get what they need this year.’ That was really exciting to hear.”