VIRGINIA S. G
Cuero ISD is facing a $3 million deficit in next year’s budget, according to an initial projection by Region 3 Education Service Center that was presented to the school board on May 13.
The state funding formula has not changed (or increased) since 2019, which has challenged school districts across the state, given the increased cost of all goods and services. However, the formula is changing with the current legislative session in Austin, and it looks like CISD will not come out ahead this time.
Because the multiplier in the funding formula shifts at around 1,600 average daily attendance (ADA), Cuero’s funding is facing “an anomaly” because its attendance falls in this range. Whereas with the previous formula, Cuero received $11,650 per ADA, the new formula decreases that amount per student by $1,300.
“We are one of a handful of schools in the state that is an anomaly in that formula,” Superintendent Micah Dyer said. “We even had Omar Garcia look at it, who is the state budget template formula writer, and he said, ‘You've been a winner for the last four years. This year, you're a loser because of the anomaly in the budget, because it was artificially inflated.’ ” Dyer said they have known for two years that the readjustment would likely decrease Cuero’s funding and other projected revenues were still in play.
The good news is several remedies are available, not the least of which is the $1.5 million Formula Adjustment Grant that the state gives districts to ease into the new calculations.
Reg 3 Finance Liaison Kristin Marak outlined other steps that districts can take, including effi ciency audits, staffing studies, pending legislation, Voter Approved Tax Rate Election (VATRE), and reduction in force (as a last resort).
Dyer said districts spend 70-90% of every dollar on staffing and that Cuero is currently in a hiring freeze.
Several local districts, such as Yoakum and Victoria ISD, attempted to increase teacher pay by holding the “golden penny” VATRE elections last November. Voters rejected the measures.
Dyer said VATRE’s tend to do better in stand alone elections because in the big election years, voters tend to reject anything that sounds like a tax increase.
The state allows school districts to keep eight “golden pennies” from property tax revenues that are not subject to recapture and stay within the district rather than going to the state education fund. The three cents that voters are asked to approve in a VATRE election are part of the total eight cents that state law allows districts to keep.
Given the current budget crunch, the CISD board may ask for voter support with a VATRE election in November.
If Cuero voters were to greenlight the VATRE, $700,000 in extra revenue would stay in the district rather than head to Austin.
Dyer said that his cabinet has already trimmed next year’s budget by $1 million and it’s a matter of seeing the final legislation that is passed.
He said the district has faced deficit budgets in the past, including the $4 shortfall when he first arrived in Cuero eight years ago.
“We knew this was coming, guys, the sky is not falling,” he said. “We still have a healthy fund balance with the cuts we're currently making, and things we're looking at. I don't even know that we'll have to free salaries next year, but we're just going to wait and see what comes down from the funding. We're going to be fine.”
