August 2, 2023 533 PM
MARFA — The Marfa ISD Board of Trustees is currently poised to adopt a 2023-2024 school year budget with a deficit of around $1 million or more.
The board met this week with Interim Superintendent Arturo Alferez and Chief Financial Officer Rosela Rivera for the latest in a series of ongoing budget workshops where they discussed legislative updates, bond payments, salary structures for support staff and approved contracts for six new employees.
Board members Teresa Nuñez, Lori Flores, Stela Fuentez and Ruben Martinez were present. Members Yolanda Jurado, Rene Gonzales and Ernie Villarreal were absent.
The district, along with others across the state, is adjusting to recent legislative changes brought about by Senate Bill 2, an $18 billion school property tax relief bill passed during the second special legislative session this July. The largest property tax relief bill ever passed, it included an increase in homestead exemptions from $40,000 to $100,000 — which will go up for public vote as a constitutional amendment this coming fall before it can be finalized — and a 10.7 cent reduction for school district’s M&O, or maintenance and operations, tax rates.
The changes will amount to an average savings of 42% over the next two years for Texas homeowners on their school property tax bills, according to a press release from Senator Paul Bettencourt, the bill’s primary author.
As a result of the legislation, school districts will bring in less money this year from property taxes. Marfa ISD, for example, will be required to lower their tax rate by around 18 cents — the state average — from the previous year. While the state plans to make up for that loss with additional state aid, school district funding is stagnating, not increasing.
Legislators have yet to reach agreements on teacher pay raises or an increase in the per pupil allotment, changes public education advocates — including local Alpine ISD Superintendent Michelle Rinehart — have voiced strong support for in the wake of inflation and what they call a flawed school funding formula.
A public education and school voucher-centered legislative session is anticipated to take place this October. At the Marfa ISD board meeting this week, district leaders were hopeful the coming session would result in a sorely-needed influx of state money.
As it stands, the district will need to dip into its $3 million fund balance, or savings account, to cover the roughly $1 million-plus deficit. A final budget has yet to be adopted, and the district will hold a meeting in late August to pass the finalized budget and set a tax rate. For now, they are working to make cuts where possible — a new $375,000 school bus would likely need to be grant funded as opposed to being funded through a budget allocation.
CFO Rivera told the board that making smaller cuts to the budget here and there, to extracurriculars, etc., was only so impactful and that if the district continues down the route of unsustainable funding, salaries and personnel — which make up larger chunks of the budget — would have to be assessed.
“We take another hit like this next year, we’re in big trouble. The only real place that you’re going to bring down the budget is in salaries, that’s what it comes down to,” said Rivera. “Our fund balance depends on the surpluses that we have, and we don’t have that much. It’s very scary.”
The district is also making its 2022-2023 school year recapture payments this month — money MISD is required to send back to the state because it is considered a “property rich” district by the state. The latest recapture payment for the last school year was up to $1.7 million dollars from just over $1 million the previous year, according to Rivera.
The strategies for paying off the district’s remaining bonds was also discussed at length with Duane Westerman of SAMCO Capital, the district’s bond advisor. The district has two remaining bonds totaling around $6.3 million to pay off from previous infrastructure projects. In addition to their annual payment of $432,000, the board is assessing options for paying off additional debt, a process referred to as defeasance.
The district leverages an I&S, or interest and sinking, 15 cent tax rate to pay off existing debt. They are looking at two options to pay off an additional $500,000 this year in addition to their annual payment, one which involves more interest savings, roughly $200,00 — which the board favored — and one which would totally pay off an existing 2013 bond.
So far, the district has made strides towards paying off its debt, with almost $1 million in principal paid off, totaling $440,000 in interest savings.
Switching up salary structures in order to create a more transparent, longevity-based system for the district’s support staff, including aids, administrators and custodians, was also discussed. Included in the 2023-2024 budget will be a $910 stipend for all returning employees — money which is coming out of the remainder of the school’s ESSER, or pandemic-era federal relief funds, that needs to be spent this year.
The board also voted to hire six new employees at the end of the meeting — a high school history teacher, a junior high math teacher, a special education paraprofessional, a paraprofessional and two other teachers, one with the Industry Career Vocational Education program and another with the Disciplinary Alternative Education Program.