Fort Worth ISD likely won’t have a balanced budget for the 2023-24 school year, according to officials.
The school board on May 9 received its first look at the district’s next budget. Numbers are preliminary and could shift depending on how the Texas Legislature changes school finance laws and certified property values from the Tarrant Appraisal District, which are expected in late July.
Chief Financial Officer Carmen Arrieta-Candelaria presented two versions of the early budget, one based on possible changes from the state Capitol and the other without. Regardless, both projected Fort Worth ISD spending more than its revenues.
The CFO has said balancing the books through a shift to zero-based budgeting could take a couple of budget cycles. Zero-based budgeting means every expense is justified and revenues and expenditures are balanced.
Superintendent Angelica Ramsey also is in the middle of reshuffling Fort Worth ISD, including a cheaper and more nimble administration, to deal with the effects of declining enrollment.
“I think it’ll take another year to drill down and make those adjustments,” Arrieta-Canderleria told trustees. “There is no one specific item that gets us to a balanced budget.”
However, newly re-elected trustees Tobi Jackson and Quinton Phillips previously told the Fort Worth Report they expected a budget without a deficit this cycle.
Proposed budgets
Without any law changes, the proposed 2023-24 general fund budget is more than $854.1 million. Projected revenue is more than $800.4 million. That leaves a $53.6 million deficit that the district would cover with its reserves of $357.6 million. The district’s reserves would decrease to $304 million.
With changes, the proposed general fund budget calls for $853.4 million in spending and nearly $811.7 million in revenue. The deficit — which is created when expenditures exceed revenue — would be more than $41.7 million and lower reserves to $315.9 million.
For more than a decade, Fort Worth ISD’s general fund budget has included a deficit.
The 2022-23 budget started with a more than $40 million deficit that grew to $80 million. However, the budget is now expected to end in the black because of more than $66.8 million in additional revenue, according to district documents.
The CFO told trustees she expects the district to pay more under the state’s recapture law, which takes excess local revenue from property-rich districts to property-poor districts.
Estimates show Fort Worth ISD paying more than $8.6 million to the state. The district paid more than $3 million in the 2022-23 school year, the first time Fort Worth ISD fell under the Robin Hood law.
Reasons for deficit
Arrieta-Candelaria attributed part of the deficit on several initiatives the district plans to fund for the upcoming school year.
Raul Peña, chief talent officer, presented plans for raises for all employees. Trustees likely will decide between a 3% raise across all employees or a package that calls for different pay boosts depending on the type of employee.
What’s the timeline for the budget?
Fort Worth ISD officials are working on the next version of the budget. Trustees will adopt a budget in June then consider the next property tax rate in August. Here are some key dates to remember:
May 23: Proposed budget update to school board.
May 29: Texas Legislature ends.
June 14: Fort Worth ISD publishes public notice of budget and school board holds budget workshop.
June 27: School board considers adoption of budget.
June 30: 2022-23 fiscal year ends
Estimates pin the cost of the 3% increase at $23.7 million and price of the other option at $24.8 million.
The district also has to spend almost $9.5 million to purchase textbooks for next school year, Arrieta-Candelaria said. Trustees Anne Darr and Michael Ryan, both of whom are educators, blamed the expense on the state government for not providing adequate funding to schools.
Additionally, the district plans to buy more than $7.8 million in student laptops.
Enrollment dropping, attendance up
Enrollment is expected to drop another 2,000 students in the 2023-24 school year, according to district officials. More than 70,600 students are expected next year.
Enrollment is a key figure for the budget. State funding is based on the number of students who show up to school every day. School districts receive $6,160 for each student who attends school.
The CFO expects an attendance rate of about 90% in the next school year. In the 2022-23 school year, the district had an attendance rate of 87.1%. A higher attendance rate means additional state funding because more students are showing up to class.
Fort Worth ISD wants lawmakers to tie state funding to enrollment instead of attendance.
Fort Worth ISD plans to hire a demographer to drill down into enrollment to determine what external factors are affecting the district, Arrieta-Candelaria said.
Still, trustees were concerned about enrollment. Trustee Anael Luebanos asked for an update on the district’s $1.2 million marketing plan, which the school board approved in July 2022 in an attempt to compete against charter schools and other school districts.
David Saenz, chief of innovation, expects the marketing campaign to bear fruit this summer as parents enroll students. Currently, parents of younger children are signing up for pre-K. However, the response to the district’s marketing has been positive, Saenz said.
“The jury is still out,” Saenz said.
In the coming weeks, Saenz told trustees to watch out for more digital ads, a television commercial and mailers sent directly to parents.
Other school districts already have sent mailers, trustee Roxanne Martinez said. She recently received an advertisement from another area district in the mail, she said.
Jacob Sanchez is an enterprise journalist for the Fort Worth Report. Contact him at jacob.sanchez@fortworthreport.org 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.
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