SISD to run $3.3M deficit budget in 2022
District to offset costs with outside funding
The Sherman Independent School District plans to run a deficit budget for the upcoming year while using outside funding to make up the difference. The board of trustees approved the district's budget last month in anticipation of the beginning of the district's fiscal year on July 1.
This year's budget includes a $3.3 million deficit for the district's general fund. However, district officials said new funding sources have been made available to the district that should leave it safely in the black for the next school year.
The increase in spending comes amid a time of transition for the district as it prepares to start the first full school year in the new Sherman High School. The district is also seeing other related expenses that come with not only the transition to the new high school but also the transition of the previous site into the district's second middle school.
"Obviously, we've had new expenses with opening a new school with Sherman High School and increasing the number of middle schools to two," said Tyson Bennett, assistant superintendent of business & finance. " We've had additional personnel we've hired this year, but we also had additional funding we've had come outside the normal funding process."
For the upcoming year, SISD is anticipating to see just over $80.24 million in revenues for its general fund, with $83.55 million in expenses. This budget will see a 5.5 percent increase in expenses, with maintenance and operation increasing by 7.9 percent and debt service costs decreasing by 6.7 percent.
This represents a 3.5 percent increase for the district's revenue over the previous year. This was made possible in part by a 10 percent increase in the district's tax base, with 66 percent of this related to new property on the tax rolls.
Despite the 10 percent increase to the tax base, Bennett said the total lower increase in revenues is due in part to the inverse relationship between the tax revenue and state funding.
"As this community grows, we are continuing to grow our tax base," he said. "Over the last few years, we've seen it grow anywhere from 10 percent to 12.7 percent."
This year's budget also includes changes that were made as a part of Texas House Bill 1525, which cleaned up some issues left by previous tax reforms aimed at school districts. The new bill restores gifted and talented weighting for funding, which initially cost the district $262,000. It also motified career and technology allotments in favor of the district.
SISD did see some loss in the changes due to a sliding scale on fast growth allotments. The district was initially poised to see about $1.7 million in funding through this revenue stream, however it was later adjusted to about $55,000, Bennett said.
The largest expense for the district is its personnel costs, Bennett said. Normally, the district would need to hire about 100 new people each year. However, this year is likely to be about 40 percent higher and will include 36 additional teaching positions.
The district will also be paying its teachers slightly more starting this year. As a part of the budget, the district proposed to increase the starting pay for a first-year teacher to $52,500 — an increase of $1,250 from last year.
Existing employees are expected to see a $1,450 pay raise as a part of the budget. Full-time employees will also see a one-time supplemental payment of $500.
These new expenses will be offset by part of the city's allotment under the Elementary and Secondary School Emergency Relief fund. These funds were created to help provide relief during the COVID-19 pandemic and the recovery after it.
While many of the approved expenses are directly related to the pandemic response, others, including technology and mobile hotspots have lasting impacts for the district.
The fund released $11.2 billion in new funding under ESSER III distributions. The district's full allotment totals $13.35 million, with $3.66 million allocated in the upcoming year.
The last question for the district will be what its final tax rate is calculated at. The district expects an answer to this question in August when the state calculates the proposed rate.
"Instead of us proposing a tax rate now, we will propose a tax rate in August," Bennett said. "The state actually now is giving us what our tax rate is going to be. That is a big change for schools and we are still getting used to it."