KISD looks to solve budget woes
By LESTER MURRAY news2@kilgorenewsherald.com

If there is a silver lining behind every dark cloud, the Kilgore school board is back there, looking.

Last night, prior to a regularly scheduled school board meeting, the KISD board of trustees entered into their first budget meeting.

Revard Pfeffer, business manager for KISD, presented a slide preparing the board for the upcoming budget meetings. The picture wasn't pretty.

Last year, the district started the year with a fund balance of $10,605,000. After a series of construction projects the fund balance expected on Aug. 31, 2008 is $5,842,000.

Further, Pfeffer said the district is facing a budget deficit of approximately $600,000 because a drop in student enrollment will reduce the state's contribution which is based on average daily attendance.

He said KISD will be working off the exact same revenue budget it started with for the 2007/2008 school year.

Jody Clements, superintendent, told the board the administration is looking for guidance as to what approach the board wants the district to go in solving the deficit.

There are several options, one of which will not be coming from the State of Texas. Even though increased property values means more property taxes revenues for the district, the state will cut its contribution in proportion to increases.

Based on the state formula, Pfeffer said, if the district had a total budget of $25,000,000, with the local funds generating $15 million and the state funds being $10 million, and property values went up the next year and KISD then had $18 million in local funds, the state would then decrease their funding to $7 million.

The board may, though, ask voters to increase the district's tax rate. Pfeffer said the current rate is $1.04, after the mandatory decrease of the tax rate from $1.50. "The school district can raise this rate as much as 13 cents, but only by voter approval," said Pfeffer.

Increasing the tax rate by two more cents, which these are stilled considered the golden pennies because any revenue these two cents bring in goes directly to KISD. "If the voters approved a tax increase of two cents it would generate an additional revenue increase for KISD per year of $469,822," said Pfeffer. "Every one-cent increase of one cent over that number, it would increase KISD's funding by $172,428 per year approximately" because the state would keep a share.

If the district were to ask voters for that tak rate hike, it couldn't happen until the general election in November. If the voters approved this tax increase, not only would local funding increase, but the amount the state pays would also go up, said Pfeffer. "The state rewards school districts for increased tax rates and tax effort."

Pfeffer said the district is alsoanticipating fuel costs will increase significantly for the 2008/2009 school year. "With the cost of diesel going up, so does the amount we need to budget for fuel," said Pfeffer.

Clements told the board that the state provides revenue for school districts for transportation. However that funding has not increased since 1982. "The amount of the funding we use for fuel is up to us," said Clements. "The state money is to help with all the district's transportation needs, such as new buses."

Pfeffer said the state gives KISD $252,149 per year for transportation. "Last year's transportation budget was $1,478,117," said Pfeffer. "There $450,000 in that budget for new buses, but even without that purchase the state's portion comes nowhere close to the budget KISD uses for transportation costs."

During last night's regular session the board approved next years fuel purchase at a rate 3 cents per gallon above "rack (wholesale) prices" and only on bidder offered to sell fuel to the district - United Fuel and Energy out of Tyler.

KISD is also looking at cutting trips taken by students and faculty during the upcoming school year due to increased fuel costs. "The increased fuel costs projected for the upcoming budget is $149,500," said Pfeffer. "We are also looking at needing two new buses and one vehicle at a cost of $185,000, the Kilgore High School roof replacement project has already begun at a projected cost of $300,000, there will be increased utility costs and we still have personnel positions that need to be filled."

Clements said the administration is suggesting a freeze on salaries except the mandate step-increases for teachers. "The district will also have to look at not filling positions as they come open and combining duties for certain positions where feasible," said Clements.

However, Clements said the administration would not recommend cutting positions and funding for academic programs due to the negative impact it could have on the students.

Pfeffer said also the staff will have to understand in many areas KISD is equal to or above what other school districts are paying for custodial and paraprofessional staff. "All of us want a raise, especially with the cost of living going up," said Pfeffer. "It would be unreasonable to think we could maintain a quality staff if we did not give raises for five years."

Pfeffer said salaries and employee benefits make up 82 percent of the budget.

Bryan Cole, board member, said he wants the public to know and be educated on just what kind of decisions the board is having to make in regard to the budget and would hope people would start coming to the board meetings and the budget meetings.

If nothing changes in the state funding formula, the tax rate does not change, student population stays the same and employees get only a three percent pay raise, the district's fund balance will be down to $608,270 by the 2011/2012 school year, said Pfeffer.

The next budget meeting will be held on Tuesday, July 1, at 5 p.m. at the KISD administration building. The meeting will be open to the public.