HISD board approves nearly $2 billion budget on split vote

Grady Middle School Art teacher Loren Gardner teaches his classroom and Elijah Chambers, age 14, about perspective at Grady Middle School. The budget adopted early Friday includes salary increase for teachers based on years of experience. less Grady Middle School Art teacher Loren Gardner teaches his classroom and Elijah Chambers, age 14, about perspective at Grady Middle School. The budget adopted early Friday includes salary increase for teachers ... more Photo: Thomas B. Shea, For The Chronicle Photo: Thomas B. Shea, For The Chronicle Image 1 of / 1 Caption Close HISD board approves nearly $2 billion budget on split vote 1 / 1 Back to Gallery

After months of intense debates about Houston Independent School District budget proposals that centered on teacher raises and making funding more equitable across schools, the Board of Education approved a $2 billion budget on a split vote for the 2017-2018 school year.

Thursday night's meeting stretched to about 1 a.m. Friday.

The nation’s seventh largest school district will face an estimated $106.8 million budget deficit during the coming school year, leading officials to take money from the district’s rainy day fund to help pay for its day-to-day operations.

The district’s total property taxes will stay the same – about $1.21 per $100 of taxable property value – but it will increase the amount it collects for its maintenance and operations taxes and decrease the amount it collects in interest taxes.

The adopted budget includes salary increase for teachers based on years of experience. Teachers with five or fewer years of experience will receive a 2 percent salary increase and those with 16 or more years of experience will receive a 4 percent increase.

A budget amendment that would have given all teachers and support staff 5 percent raises across the board failed on a 6-3 vote as some trustees worried how the district would fund salary increases.

Zeph Capo, president of the Houston Federation of Teachers union, said that the increases are a step in the right direction but will not be enough to make Houston ISD more competitive with its neighboring districts.

“I hope that it’s enough to keep every one of the teachers I know who have been offered jobs in other districts to stay here another year until we can fix this,” Capo said. “This is a Band-Aid, but we need a long-term fix.”

Only Trustee Anna Eastman voted against the budget but left the meeting before a reporter could ask about her vote.

It’s the first budget to be brought forward by Superintendent Richard Carranza, who came to the district in September.

While many hailed Carranza at his hiring as someone who would be a change-maker, the budget proposed few changes some had expected to see, including changes to magnet funding and how schools in the district are funded.

Carranza said he held off on some of those changes – particularly changes to how magnet programs are funded – so he could gather input on potential shake-ups. He said he would present the board with a proposal about magnet schools by January 2018.

“This is not a matter of not exhibiting leadership,” Carranza said. “We’re talking about monumental shifts with magnet programs and other concerns. We’re starting that work, but that doesn’t come to fruition in just one budget season.”

The approved budget will see the district dip below the amount of money it's required to keep in its general fund balance, essentially a rainy day fund districts are mandated to maintain, due to its budget shortfall.

The district will have about $308 million on hand for emergencies at the end of the 2016-2017 fiscal year, but that number could drop to about $246 million by the end of next year. That’s about $29 million less than it’s supposed to keep on hand. Some of those reserve funds will be spent to give district staff raises.

District budget officials increased the amount dedicated to salary increases from $26 million presented at a June 15 workshop to about $48 million Thursday after board members groused over how little salary increases for teachers and support staff would be.

District officials also cut funding for Carranza’s Achieve 180 campus turnaround plan by more than $8 million to help pay for raises.

Board President Wanda Adams also proposed an amendment that would cut $200,000 from a fine arts initiative to give elementary school principals a small raise, which was approved.

Also new Thursday was an additional $2.2 million for the district’s special education department that was included after trustees Anne Sung and Jolanda Jones raised questions last week about a lack of funding increases for a department that has faced scrutiny for failing to provide adequate services and testing to special education students.

The $2.2 million includes funding for testing materials, nursing support, three parent liaisons, an autism program at three high schools and a senior program manager for the department.

Budget officials with the district said this has been the most difficult budget to create in recent memory due largely to a lack of funding increases from the state, recapture and uncertainty stemming from the Texas Legislature’s scheduled special session.

Glenn Reed, the district’s general manager of budgeting and financial planning, said his office did not finish finalizing the budget proposal until 10 minutes before Thursday’s meeting.

This is the first year Houston ISD has been ordered to pay recapture fees by the state, giving the state millions to help buoy districts that collect little in property taxes. It could cost the district between $77.5 million and $137 million, although the district’s proposed budget assumes HISD will have to pay the larger amount.

“We have a lot of challenges on our revenue streams, not because Houston’s not growing, but because of a lack of action by our Legislature,” Reed said.

Because of anticipated deficits, Trustee Rhonda Skillern-Jones proposed having schools give any extra money they have at the end of the school year back to the central.

Houston ISD is different from many districts in how it funds its schools, giving principals large pots of money and allowing those school leaders to decide how to spend those funds.

If a school had money left over prior to Skillern-Jones amendment, the school could keep 75 percent and only have to give back 25 percent to the district.

Under the amendment, which was approved on a 5-4 vote, schools now must give 100 percent of those extra funds back to the district after the 2017-2018 school year.

Trustee Anna Eastman did not support the amendment and said when the district previously forced schools to give all of their extra money to the district, school leaders would go on spending sprees to ensure they’d keep their same level of funding for the coming school year.

“If schools didn’t spend money on their needs, that money doesn’t need to be returned to those schools,” Skillern-Jones said. “We need that money because of the budget deficit.”

Trustee Mike Lunceford also proposed an amendment to ask the state’s Legislative Budget Board to conduct a performance review of the district and to take a closer look at how it’s spending money. The board voted 8-1 in favor of asking for the performance review.