Budget Basics

School finance in Texas and what it means for Round Rock ISD

Nationally, Texas ranks 49 when it comes to per-student spending. The standard allocation for educating a Texas student, which was boosted to $6,160 annually per student in 2019, has remained unchanged, even though inflation has risen by 14.5 percent. Furthermore, the school district can only receive the entire $6,160 sum for each student with perfect attendance. If a student is absent during the school year, the District’s entitlement for that student decreases, even though expenses such as teacher salaries remain constant.

2024-2025 Budget FAQ

Q: Why were teachers only given a 1% raise, and how does the district make these decisions?

A: The Board has approved a 1% General Pay Increase for all eligible employees and two one-time incentive payments of $500 if enrollment targets are met. The state funding formula has stayed the same since 2019, meaning that the increased cost of education for students is not matched by the district funding for those students. However, it is important to remember that because of the passage of Proposition A earlier this year, our staff received an additional 3% general pay increase on top of the 3% salary increase for all teachers and librarians and 2% for all other staff members that the board approved for the 2023–24 school year. That resulted in an overall 6% or 5% general pay increase for all employees for 2023–24.

Q: What is RRISD doing to compete with the salaries of neighboring districts?

A: For 2022-23, the District increased salaries by 5% for teachers and 4% and 3% for other employee groups. For 2023-24, teacher salaries were increased by 6%, with different employee groups receiving 5%. For 2024-25, the District recommends a 1% increase and two additional enrollment-based incentive payments of $500 each.

Q: How are the personnel in Central Office cutting costs?

A: Department budgets have been reduced, while department vacant positions are eliminated. This means fewer resources are in place to support campuses, students, and employees. Department leaders work hard to realign and sometimes assume duties previously covered by a no longer staffed position.

Q: Will staff need to switch campuses to fill open positions, and what positions are a part of the hiring freeze?

A: There may be situations where employees are reassigned to other positions at their current or another campus. The hiring freeze applies to non-campus positions.

Q: How does changing someone’s position and keeping their salary the same benefit the budget?

A: Staff whose assignment changes will retain their 2023-24 salary for one year. Additionally, the position they are moving from will not be filled, resulting in a budget reduction.

Q: Why does employee insurance continue to rise?

A: We are working hard to make insurance costs affordable for employees. However, the costs continue to increase across the district. As a self-funded district, the district currently provides $466 per employee per month for health insurance. If our overall budget remains the same. If the District provided a higher contribution on behalf of employees, additional reductions would need to be identified to offset those costs.

Q: What changes were made to the ITS structure?

A: ITS staffing will be shifted to a service model, where ITS positions will be determined based on the number of students served at a campus. This will mean that ITS positions will be more equally distributed based on student needs, rather than assigned to a specific campus. The salary for anyone reassigned would remain in place for one year, while the position they were moved from would be eliminated, creating a budget reduction.

Q: Are positions related to mental health and crisis being reduced?

A: Staffing reductions in this area are not being recommended. Three positions have been cut: two crisis social workers and one program coordinator. The two crisis social worker positions were vacant when the new director arrived, and the district did not have enough crises to keep them busy full-time. Their job descriptions did not include a caseload, as they were independent of any vertical learning community. The Behavioral Health Services Department now has two social workers per VLC (10) plus one social worker and one social worker on military leave—12 staff members and the director.

Q: Will special education staff be reduced, and will there be any changes in the stipends for these positions?

A: Special education staff on campus is reduced only when there is a decrease in student enrollment within the respective program, per staffing guidelines, or if an allocation is assigned to a student per their IEP, and that student either leaves the district or changes campuses. When adding or reducing staff, we must ensure that these changes do not reduce overall funding levels for special education services. Any staff reductions must be justified through allowable exceptions, such as decreases in student enrollment or the departure of specific students with assigned resources. Stipends will continue for 2024-25.

Q: Will there be a stipend for taking on extra classes or an increase in the class ratio?

A: There are one-time incentives tied to student enrollment targets that would be paid to employees in December and June. Only employees who are employed through a target date will be eligible for the incentives. Elementary classroom teachers with more than 5 students enrolled over the class size target at a particular grade level may be eligible for additional compensation. Stipend information for the 2024-2025 year.

Q: What is happening to the stipend tied to dual language teachers?

A: Teachers and intervention teachers will retain the $7,000 dual language stipend. Dual language stipends are being reduced for non-classroom teachers for 2024-25.

Q: Can the district challenge recapture or refuse to give Robinhood money?

A: It would take a change in the law. Voters would need to elect legislators to vote to change the recapture law. There are further repercussions from the state if we do not pay our recapture payments. We would prefer to see a change in the law regarding school funding. If the basic allotment is increased to match inflationary pressures (in both salaries and goods/services), recapture would be calculated to a lower amount.

Q: Does the district have a budget and staff to lobby the state legislature and governor on behalf of our public schools, and what can staff do to help advocate for more money?

A: The district website has the Legislative Priorities 2023 listed. The district belongs to the Texas School Alliance TSA, which works on advocacy for member districts. Besides speaking with others about public education topics and advocating for public schools, staff members have the right to vote and being able to contact state representatives.

Q: Has the district considered transitioning to a four-day school week to cut costs?

A: This option has not been considered. Moving to a four-day week would significantly impact our community, specifically our families, who may have to identify care options for their children if the district is closed for an additional day.

Q: What are the athletics plans and possible double-blocking schedules?

A: The district will maintain the double-block schedule for high schools. However, high school teacher staffing formulas have changed, which will reduce the number of sections taught. This could impact the number of coaches a program can staff based on the overall campus and student schedule choices.

Q: How often is enrollment looked at, and how does changing enrollment affect the district’s budget?

A: The district continues to evaluate enrollment and registration data each week, which includes all new enrollment data. Staffing may be adjusted based on the needs of each campus. Increasing enrollment in any area will increase the district’s funding from the state as the overall enrollment for the district will increase.

Q: Do we spend district money on rent allotments to our staff?

A: The District does not pay rent allotments for new hires. A fund established by the Texas Workforce Housing Foundation provides subsidies to up to 100 qualified District employees.

Q: What technology programs are being cut, and how can staff know what platforms will be available for the 2024–25 school year?

A: Although updates are still being made to this site through the summer to reflect changes, the Digital Learning Applications and Textbooks website provides a list by subject of what is managed at the district level. The Instructional Software website provides information regarding online applications reviewed in the district. One way we are trying to address the issue of redundancy in technology is through the software approval process to review resources on a 3-year timeline that aligns with purchasing guidelines. Information was shared with campus principals regarding the changes to platforms on 5/22/24. Schoology student licenses will be purchased for secondary students (teachers at all levels will continue to have access). The district will not purchase Blocksi and Pear Deck next year.

Budget FAQs

Q: What makes up a district tax rate?

A: A school district’s tax rate comprises Maintenance and Operations (M&O) and Debt Service (I&S). M&O taxes finance the General Operating Fund, which covers the District’s routine operating expenses, including salaries, supplies, utilities, insurance, equipment, and other costs. The Debt Service tax pays for school bonds and can only be used to repay the principal, interest, and expenses of bonds issued for particular purposes. Each year, usually in September, the Board of Trustees approves the tax rate.

Q: What makes up a public school district budget?

A: The M&O fund finances the school district’s day-to-day operations, including expenses like salaries, utilities, and supplies. The I&S fund pays off the bonded indebtedness. School districts conduct bond elections to secure authorization from local voters to issue bonds and levy taxes for repaying the bonded indebtedness. The proceeds from the bond sale are for constructing and improving facilities, and purchasing equipment, furniture, or land. However, the funds collected from the I&S side of the budget cannot be used for maintenance and operations expenses. According to Texas law, using I&S funds to pay teacher salaries is not permissible.

Q: What is recapture? How does it impact us?

A: State funding formulas for school districts are designed to reduce state funding for education as property values increase. The State’s recapture plan, also referred to as “Robin Hood,” means Round Rock ISD taxpayers subsidize education costs for other Texas school districts.

Recapture is part of the Texas Education Code governing school funding that was enacted by the Texas Legislature. Recapture takes local tax dollars from “property rich” districts and redistributes the funds to “property poor” school districts to help fund operations. Round Rock ISD became a recapture district during the 2002-2023 school year.

This means that Round Rock ISD, and 159 other Texas public school districts, send millions of dollars in taxpayer funds back to the state every year for redistribution. These are funds that would have otherwise been used to help fund school operations and salaries in their zoned school district.

Only the Texas Legislature can reverse the increasing flow of local taxpayer dollars to the State’s budget.

Q: How much has Round Rock ISD contributed to State recapture each school year?

A: 2022-2023 $85,863,000
2021-2022 $61,479,569
2020-2021 $16,397,380

Q: What are bonds? How long does it take to pay them off?

A: Voter authorization is mandatory for school districts to issue bonds, essentially debt instruments allowing investors to lend money to the district. The funds raised through the bond sale are used for financing long-term projects and other capital expenditures. The district repays the principal amount of the bonds and interest over an extended period. As per Texas laws, the maximum maturity period for a bond is 40 years.

Round Rock ISD has never issued bonds with a maturity period of more than 25 years, even though the assets financed by the bonds have a longer life span. During a bond sale, multiple bonds are issued, each with a maturity period ranging from 1 to 25 years. Assets with a shorter life span, such as technology devices, are financed with bonds with shorter maturities corresponding to the asset’s useful life.

Q: What are fund balances?

A: School districts must employ “governmental fund accounting” to keep track of their funds. In Texas, school districts usually maintain various types of fund accounts, each comprising three components: assets (economic resources of the fund), liabilities (financial obligations of the district associated with a particular fund), and fund balance (the remaining value of assets after accounting for liabilities).

Round Rock ISD maintains an adequate fund balance to ensure smooth operations during periods of negative cash flow. Nonspendable and restricted fund balance use is limited by externally enforceable limitations like laws and regulations.

The Board of Trustees allocates committed and assigned portions of the fund balance for specific purposes such as emergencies, small capital projects, one-time items, and educational equipment, including musical instruments. The District’s Board Adopted Fiscal and Budgetary Strategy mandates a minimum unassigned fund balance of 25% of budgeted operating expenditures. Sufficient reserves are necessary to meet ongoing monthly spending because of the timing of payments received from the state of Texas and tax collections.

Q: Can the District use fund balances as a “rainy day” fund?

A: A fund balance is not a reserve for emergencies. Instead, it is the surplus of assets a District possesses over its liabilities. This surplus comprises liquid assets like cash and investments and non-liquid assets such as delinquent taxes, accounts receivable, and inventories. Moreover, the surplus amount in a fund balance fluctuates significantly over a year. Therefore, when a district reports its fund balance, it reflects a particular moment in time that is subject to change as assets are collected, and financial obligations are fulfilled. For instance, districts with a fiscal year-end on June 30, like Round Rock ISD, may have larger fund balances than usual simply due to the time of the year.

Q: Can a school board use the fund balance in any way they deem fit?

A: While School Boards possess discretionary authority over fund balances, it is essential to recognize that not all funds comprise readily available liquid assets. A significant portion of the fund balance constitutes non-liquid assets like delinquent taxes, accounts receivable, and inventories. And due to the timing of cash flows, the School Board only receives approximately 85% of revenues six to seven months into the fiscal year. In contrast, expenditures are evenly spread out throughout the year. Therefore, a significant portion of the unassigned fund balance, which the Board has discretionary control over, is utilized to cover expenses during periods of negative cash flow. Furthermore, other components of the fund balance, such as non-spendable, restricted, committed, and assigned funds, are subject to spending restrictions.