Galveston Independent School District’s board of trustees Wednesday approved a budget for the new fiscal year that includes a $2.5 million deficit driven, in part, by a decision to give pay increases to all teachers after improved performance on state accountability ratings.
“It was two reasons,” Vice President Jeff Temple said. “Our teachers are doing an outstanding job based on the current results. Second, we had to. All the competing districts were paying more than we were, and either we weren’t going to be attracting as many, or we would be losing teachers after we trained them to other districts.”
The district’s 2018-19 fiscal year budget projects $88.1 million in revenues and about $90.6 million in expenditures, leaving a deficit of a little more than $2.5 million, according to budget documents.
About $1.7 million is set aside for teacher raises, which differ based on a sliding scale, said Tim Bargeron, the district’s assistant superintendent for business and operations.
Trustees approved the budget about a week after the district showed improvement based on the state’s controversial new accountability system.
Galveston, like most other school districts in the county, didn’t receive an overall rating on the state’s new A-F system thanks to an exemption granted because of disruption Hurricane Harvey caused. Only districts that earned an A rating were officially ranked this year.
The district would have achieved a B rating and been the third-ranked in the county, however, Trustee Anthony Brown said.
Budget deficits might not be sustainable long-term, but giving teachers raises makes some economic sense, Temple said.
“It’s not necessarily sustainable, but neither is losing teachers and having a high teacher turnover,” Temple said. “If you can keep teachers in the district, you don’t have to hire as many new ones each year and save money as well.”
Trustees have passed budget deficits several times over recent years, straining under the weight of increasingly large payments to the state as part of the so-called Robin Hood funding program, which “recaptures” local property tax revenue and sends it to other districts.
The budget for the 2018-19 fiscal year includes a $26.2 million payment as part of the recapture program, according to district records.
While trustees had to pass a deficit budget, there is a good chance the district doesn’t actually end up in a deficit, Bargeron said.
“The biggest impact is implementing the salary increases,” Bargeron said. “To pay that, we’re dipping into our reserves, but the long-term plan is to reduce other expenditures.”
For instance, trustees passed a deficit budget to cover the 2017 fiscal year, but ended with a surplus of about $1.2 million and could have another one for 2018, officials said.
District officials are in a good position to cover the potential deficit because they have about $17 million in undesignated fund balance, Bargeron said.