In the end, they took what they initially rejected.
Houston ISD trustees unanimously passed a $2 billion budget Monday that is nearly identical to the one they narrowly rejected two weeks ago, signing off on significant cuts and agreeing to draw as much as $17 million from the district’s rainy-day fund.
At an hourlong early-morning meeting, trustees said they wanted to pass balanced budgets after back-to-back years of dipping into reserves, but they ultimately approved the spending plan ahead of a June 30 deadline.
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The approved budget calls for about $83 million in spending cuts, which will result in hundreds of layoffs of support service staff. Hundreds of teaching positions also will be eliminated, but HISD administrators said they expect the vast majority of those jobs will be cut through attrition.
The budget includes about $17 million in new spending on dyslexia services, special education, the district’s plan for low-performing campuses and a comprehensive outside performance review. Trustees shaved about $1.5 million off the projected shortfall in recent days by choosing to use the state’s Legislative Budget Board for the performance review instead of a third-party vendor.
Trustees approved a budget last year that used $106 million in reserves to cover a shortfall and pay for raises ranging from 2 to 4 percent for many staff members, though they ultimately used less rainy-day money than expected.
At the June 14 budget meeting, several trustees said they were reluctant to tap reserves again, even on a smaller scale.
Glenn Reed, HISD’s general manager of budgeting and financial planning, said the district likely will not spend as much as is currently budgeted, and it could receive more tax revenue than was projected. As a result, Reed said: “I don’t expect to dip into our reserves next year.”
Administrators built the plan assuming a 1 percent increase in property values, but the Harris County Appraisal District expects HISD to see a 2 percent increase. Concerns about property appraisal appeals related to Hurricane Harvey led to the conservative projection.
HISD is expected to have about $275 million in reserves at the end of June, equal to about a month and a half of operating expenses. District officials have recommended keeping at least 3 months’ worth of operating expenses in reserve to cover emergency costs.
See here for the background. They could have done this last week, but it was definitely more exciting this way. In all seriousness, I get the urge to not want to dip into the reserve fund again, but 1) given the justifiably conservative revenue estimates that the district will almost certainly exceed, they probably won’t need to, and 2) sometimes the alternatives are worse. This was one of those times, so good call on taking the original path. The Press has more.