Fort Worth ISD’s $1 billion budget is by all means not simple.
The sheer size of it makes it a complex beast, said Michael Ball, the district’s chief financial officer.
The budget can be confusing for residents. Here’s what you need to know about Fort Worth ISD’s budget and how it is assembled.
What is the timeline for putting the budget together?
Months before the budget reaches the school board’s agenda, administrators work on it. The planning process begins around December or January each year.
Each annual budget covers a period between July 1 to June 30 of the following year.
In June, the school board will consider approving the proposed budget.
Then, in August, trustees will consider adopting the tax rate. The delay between rate and budget approval is because of when the Tarrant Appraisal District releases certified values to taxing entities. The appraisal district sets the values for all properties inside Tarrant County. Taxing entities typically receive certified values in July.
School officials use estimates from the Tarrant Appraisal District to form the district’s revenue projections and later issue a budget amendment to reflect the anticipated revenue based on the final values.
What’s in the budget?
Fort Worth ISD’s 2021-22 school year budget calls for more than $1 billion in expenditures and projects about $995 million in revenue. The school board approved the budget in June.
This year’s budget centers on initiatives aimed at helping students recover their learning losses, according to district officials.
“The current year budget is focused primarily on facilitating student learning in a way that maximizes their ability to recover any instructional time lost as a result of the pandemic,” Ball said.
The largest part of the budget is compensation for teachers and other staff. Ball estimates it is 80 to 85% of the budget. Some of the other major categories in the budget include debt service, capital outlay, professional and contracted services, supplies and materials, and other operating expenses.
Compared to last year’s budget, expenditures grew by almost $8.7 million, or a nearly 1% increase.
Biggest pieces of budget
Most of Fort Worth ISD’s budget is dedicated toward compensation, but that money is spread over several categories. Here’s a look at the five largest pieces of the budget.
- Instruction – $487,486,217
- Debt service – $106,088,100
- Plant maintenance and operations – $103,225,637
- School leadership – $52,015,060
- Guidance and counseling, evaluation – $49,102,901
The 2021-22 budget has a deficit of $27.7 million between expenditures and revenue. Ball explained the financial document was prepared using conservative estimates. That means the district is betting on either more revenue coming in or spending fewer dollars than expected.
“If the deficit is actually realized, it will be made up from the fund balance,” the chief financial officer said.
A fund balance essentially acts as the leftover funds from a budget. School districts and other local governments are required to have one as well as have enough money in it to keep operating for at least three months in case a major emergency occurs.
As of June 30, 2020, Fort Worth ISD’s general fund had a fund balance of $205.9 million and its debt service had a fund balance of $56.9 million.
Ball also described the fund balance as a stopgap during the time before the district begins receiving property tax revenue from residents.
What about the tax rate?
Typically, the biggest portion of a residents’ tax bills comes from their school district. That is true for Fort Worth ISD residents.
Currently, the district levies a property tax of $1.3432 per $100 valuation. The average net taxable value of a home in Fort Worth ISD is $176,430. That homeowner would owe $2,369.81 in property taxes to the school district.
The overall tax is composed of two smaller rates: $1.0512 is for maintenance-and-operations and 29.2 cents is for debt service.
Trustees approved the 2021-22 tax rate in August. The district expects to raise $602 million in property taxes — a $32 million increase from last year.
The rate is a decrease compared to last year’s tax. However, that does not necessarily mean residents will see lower tax bills because of growing property appraisals.
Many taxpayers will continue to pay more because of rising property appraisals. This year, the Tarrant Appraisal District pegged Fort Worth ISD’s net taxable value at $44.8 billion — a $3.4 billion jump from 2020. That is an 8.2% increase since last year.
About 58% of the school district’s general fund revenue comes from property taxes. Another 39% of revenue comes from the state and the remaining 3% comes from other sources.
More on tax rates
As every taxing entity considers a new tax rate, they also must disclose to the public two other rates: the no-new-revenue rate and the voter-approval rate.
As its name suggests, the no-new-revenue rate is the rate that would bring in the same amount of property tax revenue as the prior year on existing properties.
Fort Worth ISD’s no-new-revenue rate was $1.279091 per $100 valuation.
The voter-approval rate acts as a threshold for taxing entities. If the rate is set above that figure, the entity would have to seek voter approval in November to ratify the new tax.
Fort Worth ISD’s voter approval rate was $1.3432 per $100 valuation.
Jacob Sanchez is an enterprise journalist for the Fort Worth Report. Contact him at email@example.com or via Twitter. At the Fort Worth Report, news decisions are made independently of our board members and financial supporters. Read more about our editorial independence policy here.