McKinney ISD officials are expecting to dip into the district’s reserve general fund to balance the fiscal year 2024-25 budget.
The budget was approved by the board of trustees June 24 in a 6-1 vote, with trustee Chad Green voting against approval. The board previously discussed the budget planning process in March and May.
The breakdown
Here is a breakdown of the approved FY 2024-25 budget:
- $273.36 million expenditures in the general fund
- $105.27 million expenditures in the debt service fund
- $14.19 million expenditures in the food service fund
- $21.79 million budgeted to balance the revenue shortfall
While $273.36 million in expenditures is budgeted for in the general fund, district officials expect actual expenditures to be $267.35 million—a variance of $6 million. To address the budget shortfall, $21.79 million will be reallocated from the district’s reserve fund balance.
A district’s fund balance should hold enough money for a district to operate for 75 days, according to the Texas Association of School Administrators. The district will have $73.96 million remaining in its fund balance at the end of the 2024-25 fiscal year.
“When we’ve come to financial emergencies or crises, [the board] has allowed the district to continue to operate without having to make draconian cuts or school closures,” said Dennis Womack, assistant superintendent of business, operations and technology. “That’s due to your conservative fiscal management.”
The district’s proposed tax rate is $1.1252 per $100 valuation for FY 2024-25. The FY 2023-24 tax rate is $1.275 per $100 valuation.
Some context
Some increased costs for FY 2024-25 include:
- $5.64 million for a staff pay increase
- $1.9 million for special education growth
- $1.63 million for enrollment growth
- $1.12 million increase in the district’s recapture payment
Looking ahead
District officials remain optimistic the Texas Legislature will provide additional funding to schools in the upcoming legislative session, which begins in January, Womack said. The district will continue to work through financial challenges and develop long-term, sustainable contingencies for the budget.
Opportunities for further review include:
- Continuing to reduce central office budgets
- Increasing student to teacher ratios
- Adjusting or reducing transportation routes
- Considering a voter-approved tax rate election to increase the district’s tax rate
- Allowing nonresidential transfers into the district.
In the fall, district officials will present a list of options ready to implement if they are needed, Womack said.
“We’ve already begun brainstorming on some of the items,” he said. “We’ll continue to work on those items throughout the summer and into the fall.”
