PEARLAND INDEPENDENT SCHOOL DISTRICT Town Hall on Budget
PEARLAND INDEPENDENT SCHOOL DISTRICT Town Hall on Budget & Taxes March 26, 2019 Turner High School Auditorium
Topics of Discussion • How Pearland ISD develops the annual budget • Where the District’s revenues come from, including: • Impact of property values and tax rate • Current State funding elements • Impact of enrollment and attendance on funding • How a citizen’s property tax bill is calculated • How the District spends its funds • 2019 -2021 Legislative Process Overview PEARLAND INDEPENDENT SCHOOL DISTRICT 2
Budget Process Overview Planning • What do we want to accomplish? • How are we going to accomplish it? Evaluation Preparation • Assess performance of each campus, department, and district as a whole • Were goals and objectives met? • Fundamental part of planning for the next year • Allocate resources to support the goals and objectives established during the Planning phase • Board approval and adoption PEARLAND INDEPENDENT SCHOOL DISTRICT 3
Budget Timeline Nov-Dec Jan Feb-Mar Mar-May • Enrollment Projections & Campus Allocations • District Budget Kick-Off Meeting • Budget Meetings with Campuses & Departments • Budget and Request for Additional Funds Due • Budget Review Meetings with Assistant Superintendents • Compilation of District-Wide Capital Improvement Plan • Board Budget Workshops Jun • Public Hearing to Discuss Budget and Tax Rate • Budget Adoption Aug • Tax Rate Adoption PEARLAND INDEPENDENT SCHOOL DISTRICT 4
General Operating Fund Revenues PEARLAND INDEPENDENT SCHOOL DISTRICT 5
Information Required to Prepare Revenue Assumptions • • School Finance Law/Legislative Outcome Enrollment Projections Student Demographics Attendance Rates Taxable Property Values Tax Rate Tax Collections Other Relevant Factors PEARLAND INDEPENDENT SCHOOL DISTRICT 6
Enrollment Last 10 Years 18, 769 19, 166 19, 586 20, 054 20, 574 '11 '12 '13 '14 '15 21, 137 21, 610 21, 662 21, 617 21, 595 '16 '17 '18 '19 '20* 2019 -2020 Projected PEARLAND INDEPENDENT SCHOOL DISTRICT 7
Comparison of Outgoing Graduating to Incoming Kindergarten Class Size 1, 800 1, 600 1, 400 1, 200 1, 000 Kindergarten 800 Grade 12 600 400 200 '12 '13 '14 '15 '16 '17 PEARLAND INDEPENDENT SCHOOL DISTRICT '18 '19 '20* 8
Average Daily Attendance (ADA) & Weighted Average Daily Attendance (WADA) Last 10 Fiscal Years 27, 500 25, 000 23, 719 24, 212 24, 892 26, 157 26, 227 20, 661 20, 624 25, 422 25, 650 22, 773 22, 500 21, 958 21, 246 20, 000 17, 825 18, 344 18, 698 19, 136 19, 597 20, 200 20, 596 20, 583 17, 500 ADA WADA 15, 000 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20* * FY 19 -20 is based on projections; the spike on WADA during 17 -18 and 18 -19 was caused by an increase on ADA reported for Free & Reduced student counts due to full enrollment coded during September and October 2017 due to Harvey. PEARLAND INDEPENDENT SCHOOL DISTRICT 9
Taxable Property Values Last 10 Fiscal Years (in Billions) $ 7. 79 $ 7. 92 $ 8. 04 '18 '19* '20* $ 7. 23 $ 5. 69 $ 5. 68 $ 5. 73 $ 5. 84 '11 '12 '13 '14 $ 6. 17 '15 $ 6. 44 '16 '17 *18 -19 Actual as of February 2019 *19 -20 Estimates have not been prepared by the County PEARLAND INDEPENDENT SCHOOL DISTRICT 10
Breakdown of Local Property Taxes • Over 46% of the District’s revenue comes from its local citizens through property taxes • The tax rate is comprised of two parts – Maintenance and Operations (M&O) and Interest and Sinking (I&S) M&O I&S General Funds Day to Day Operations Debt Service Fund Can Only be Used to Pay Debt PEARLAND INDEPENDENT SCHOOL DISTRICT 11
Tax Rate (Per $100 Valuation) Tax Rate Tax Year Fiscal Year M&O I&S Total 2017 -18 $1. 04 $0. 3756 $1. 4156 2018 -19 $1. 06 $0. 3556 $1. 4156 2019 -20 $1. 04 $0. 3906 $1. 4306 PEARLAND INDEPENDENT SCHOOL DISTRICT 12
General Operating Fund Revenue Fiscal Year 2018 -2019 $175. 3 Million $80. 9 Local Property Taxes* Other Local Sources $1. 8 State $82. 2 TRS On-Behalf Federal $8. 3 $2. 1 $0. 0 $20. 0 $40. 0 $60. 0 $80. 0 $100. 0 Millions *Includes Current Year, Prior Year, Delinquent, and Penalty and Interest. PEARLAND INDEPENDENT SCHOOL DISTRICT 13
General Operating Fund Revenue Projection $166 Million based on Current Funding Formulas Revenue (in millions) Local Property Taxes Other Local State TRS On-Behalf Federal Total FY 2018 -19 Amended $80. 9 1. 8 82. 2 8. 3 2. 1 $175. 3 FY 2019 -20 Projected $80. 2 1. 8 73. 6 8. 3 2. 1 $166. 0 Variance -$0. 7 0. 0 -8. 6 0. 0 -$9. 3 Fiscal Year 2019 -2020 projections are based on an M&O tax rate decrease from $1. 06 to $1. 04, which reduces local property tax revenue albeit an increase in property values and also decreases State funding also decreases due to a slight decrease in enrollment and a loss of State Compensatory Education (SCE) counts generated during Hurricane Harvey when all students were coded as “Free & Reduced”. PEARLAND INDEPENDENT SCHOOL DISTRICT 14
Millions Local vs. State Share of Basic Allotment $80 $75 $70 Local $65 State $60 $55 $50 '17 '18 PEARLAND INDEPENDENT SCHOOL DISTRICT '19 '20* 15
General Operating Fund Expenditures PEARLAND INDEPENDENT SCHOOL DISTRICT 16
Information Required to Prepare Expenditure Assumptions • • Revenue Levels Legislative Mandates District Initiatives Prioritized Needs Staffing Formulas & Needs Salary Increases Benefit Contributions Other Relevant Factors PEARLAND INDEPENDENT SCHOOL DISTRICT 17
How Much Money is Distributed to Each Campus? Student Enrollment & Staffing • The number of students projected to enroll in the fall determines the number of teachers and support staff that each school receives. • That is, enrollment translates into staff positions, which translates into salaries and benefits. School Operating Budgets – The money each campus receives for supplies, equipment, and other operating expenses are allocated on a per-pupil basis. Staffing is not paid from campus budget allocations. Elementary & Middle $89. 10 Junior High $100. 14 PACE $113. 94 High School $128. 70 PEARLAND INDEPENDENT SCHOOL DISTRICT 18
Budget Breakdown by Object Fiscal Year 2018 -2019 $176. 9 Million Capital Outlay $0. 3 Property & Casualty Ins. $1. 8 Misc. Operating Costs $1. 8 Supplies $7. 6 Utilities $7. 0 Contracted Services $6. 1 Other Payroll Benefits $7. 6 TRS On-Behalf $8. 3 Health & Life Ins. Contrib. $3. 8 Extra Duty Pay $3. 0 Substitutes $2. 2 [CATEG ORY NAME] 86. 1% [CATEG ORY NAME] 13. 9% Salaries $127. 5 $0 $20 $40 $60 PEARLAND INDEPENDENT SCHOOL DISTRICT $80 $100 $120 $140 Millions 19
How is the General Operating Fund Allocated? Fiscal Year 2018 -2019 $176. 9 Million Instruction $108. 9 Instructional Support $27. 4 District Operations $35. 3 Central Administration Other $4. 6 $0. 7 $0 $20 $40 PEARLAND INDEPENDENT SCHOOL DISTRICT $60 $80 $100 $120 Millions 20
District & State-Wide Comparison of Budgeted Operating Expenditures Fiscal Year 2018 -2019 2. 6% 4. 9% General Administration 19. 9% 18. 6% District Operations 15. 6% 15. 9% Instructional Support 61. 9% 60. 6% Instruction 0% 20% Pearland ISD 40% 60% 80% State Source of State Percentages: TEA 2018 -2019 Budgeted Financial Data PEARLAND INDEPENDENT SCHOOL DISTRICT 21
General Operating Fund Summary & Estimated Days in Fund Balance Fiscal Year 2019 -2020 Projections (in Millions) Fiscal Year 2019 -2020 revenue projections are based on current funding law; projected expenditures are held at current fiscal year levels, with no salary increases and without restoring prior year budget cuts. The $10. 9 million deficit is due in large part to reverting the M&O tax rate from $1. 06 to $1. 04, a slight decrease in enrollment coupled with a conservative growth in property values, and a loss of the additional revenue generated through the SCE counts during Hurricane Harvey. PEARLAND INDEPENDENT SCHOOL DISTRICT 22
Effect of an Increase to the M&O Tax Rate Fiscal Year 2019 -2020 (Estimated) Additional Funding (in Millions) Rate Tax Rate Increase $1. 05 + 1 cent $1. 06 + 2 cents $1. 07 + 3 cents $1. 13 + 9 cents $1. 17 + 13 cents State $1. 96 $3. 92 $3. 99 $4. 43 $4. 71 Local $0. 78 $1. 56 $2. 34 $7. 02 $10. 15 Total $2. 74 $5. 48 $6. 33 $11. 46 $14. 86 Annual Taxpayer Impact $23. 81 $47. 62 $71. 43 $214. 28 $309. 51 Notes: • Each cent raised in taxes generates $780, 000 in local funds and $1. 96 million in State funds (up to $3. 92 million in State funds, for a maximum of two additional cents). • Each cent increase beyond an M&O rate of $1. 06 generates an additional $72, 000 in State funding. • The annual cost of each cent beyond $1. 04 for a taxpayer with an average appraised home value of $263, 087 is $23. 81. PEARLAND INDEPENDENT SCHOOL DISTRICT 23
Surrounding Area School District Tax Rates for Fiscal Year 2018 -2019 School District M&O Tax Rate I&S Tax Rate Total Tax Rate GALENA PARK ISD 1. 2433 0. 3300 1. 5733 DEER PARK ISD 1. 2367 0. 3020 1. 5387 PASADENA ISD 1. 2000 0. 2800 1. 4800 ALVIN ISD 1. 1700 0. 2800 1. 4500 PEARLAND ISD 1. 0600 0. 3556 1. 4156 CLEAR CREEK ISD 1. 0600 0. 3400 1. 4000 FRIENDSWOOD ISD 1. 1700 0. 1970 1. 3670 PEARLAND INDEPENDENT SCHOOL DISTRICT 24
Debt Service Fund The Debt Service Fund is used to pay the principal and interest on bonds that we issue to finance construction, renovations, and other capital improvements. PEARLAND INDEPENDENT SCHOOL DISTRICT 25
$- PEARLAND INDEPENDENT SCHOOL DISTRICT $ 35 $ 30 $ 25 $ 20 $ 15 $ 10 $5 Interest 2041/42 2040/41 2038/39 2037/38 Principal 2039/40 $ 40 2036/37 2035/36 2034/35 2033/34 2032/33 2031/32 2030/31 2029/30 2028/29 2027/28 2026/27 2025/26 2024/25 2023/24 2022/23 2021/22 2020/21 2019/20 Millions Debt Service Requirements $ 45 26
Debt Service Fund Tax Rate to Meet Debt Service Requirements Tax Year Fiscal Year Tax Rate Increase/ (Decrease) in cents Updated Projection 2017 -18 $0. 3756 2018 -19 (2. 00 cents) $0. 3556 2019 -20 3. 50 cents $0. 3906 2020 -21 2. 00 cents $0. 4106 2021 -22 2. 55 cents $0. 4361 2032 -33 (23. 50 cents) $0. 2011 2042 -43 (19. 28 cents) $0. 0083 PEARLAND INDEPENDENT SCHOOL DISTRICT 27
Calculation of Property Tax Bill PEARLAND INDEPENDENT SCHOOL DISTRICT 28
How is Your Property Tax Bill Calculated? Based on Tax Year 2018 Average Market Value of Residences $263, 087 Less: Homestead Exemption (25, 000) Total Taxable Value $238, 087 ÷ Taxable Value (per $100 of assessed valuation) × Tax Rate Total Property Taxes Due 100 $2, 380. 87 × $1. 4156 $3, 370. 36 M&O $2, 523. 72 I&S $846. 64 Pearland ISD grants the state-required $25, 000 homestead exemption for all homeowners that apply to the appraisal district for that exemption. Homeowners who are disabled or age 65 or older are entitled by state law to an additional $10, 000 exemption. PEARLAND INDEPENDENT SCHOOL DISTRICT 29
Thank You! Pearland ISD Business Office www. pearlandisd. org/transparency Follow us on Twitter @Pearland. BIZ PEARLAND INDEPENDENT SCHOOL DISTRICT 30
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