Plano ISD approves $435 million budget: 3 percent raises included for all employees

Even with a $10 million loss in state funding, Plano ISD was able to pass a budget that included employee raises and no layoffs.

The $435 million general operating budget passed unanimously Tuesday night, ending months of work led by new superintendent, and former chief financial officer, Richard Matkin. He said while the future of educational funding is up in the air due to several lawsuits filed by school districts against the state, smart financial planning by Plano ISD has allowed the district to make the best out of a bad situation.

"The budget process is a year-long process and we will start next year's budget as soon as this one is passed," Matkin said. "I think what will be the wild card in next year's budget is that the Legislature is meeting, so we will need to focus on them."

The 3 percent raises apply to all employees, and will result in teachers with bachelor's degrees receiving an additional $1,555 per year, while those with master's degrees will receive an additional $1,614. The raises will cost the district $9.6 million during the 2012-2013 school year. Trustee Missy Bender said the raises were necessary, since the cost of living continues to rise and no raises were handed out last year.

With the loss of state funding and an increase in spending largely tied to pay raises, the district is facing a $19.1 million budget shortfall. This deficit will be covered using the district's fund balance, which is estimated to be slightly more than $160 million at the end of this fiscal year.

Several trustees praised the work the district administrators have done to keep costs down, including keeping general administration spending at only 2.1 percent of the total budget. In comparison, instructional spending makes up 68.4 percent of the budget, while instructional support makes up another 12.1 percent.

"We are not wasting money here. We are putting it exactly where it needs to go and doing the right things with it," said Trustee David Stolle, who has previously said the district built up its fund balance for a rainy day, and that he believes it is currently raining.

Prior to the 2011-2012 school year, the district faced a $24 million reduction in state funding, which it dealt with by laying off several hundred employees and cutting funding to many extracurricular activities. Some of those activities, such as Destination ImagiNation, Whiz Kids and sending fourth graders to the Collin County Adventure camp, will once again not be funded in the upcoming school year. However, the district is not ruling out restoring funding when its financial situation improves.

"We are going to have relief from the Legislature, or some kind of revenue generator, in order to return some of those things," Matkin said. "All of our money was put back into raises, as well as for supplies and things related to student growth. There were no programs put back in this year."

Included in the appropriations is a $24.6 million recapture payment to the state, which is required since Plano is classified as a Chapter 41, or property-wealthy district. The state will redistribute this money, as well as the money sent in by other Chapter 41 districts, to poorer school districts throughout the state. In 2011-2012, the state's recapture payment was $38 million.

Plano ISD currently has one of the lowest tax rates in the area, a point which will remain true in 2012-2013. The maintenance and operations rate will remain at $1.04 per $100 of assessed value, while the interest and sinking (debt service) rate will remain at $0.3334, for a total tax rate of $1.3734.

Linda Madden, the district's executive director of finance, said the average Plano homeowner, whose home is valued at $253,700, will pay about $3,278 in taxes. However, even with the tax rate remaining unchanged, the average homeowner will pay $31.58 less in taxes this year due to a slight dip in property values.

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