11 Jan 2005
District Trustees To Begin Considering Budget Scenarios in February
DALLAS—Dallas Independent School District Interim Superintendent Larry Groppel on Tuesday said the administration is considering several possible scenarios that will affect the district's 2005-06 $1.048 billion budget, including a number of measures he said could generate some painful discussions and circumstances.
Among the possible options posed include increasing class sizes at fifth grade and above, reducing non-teaching positions, eliminating or reducing longevity pay, combining or consolidating small campuses, and reducing or eliminating the optional homestead exemption on homes within the DISD's boundaries.
"None of these options is going to be popular or pleasant, but we cannot ignore the fact that there are no new dollars coming to Dallas ISD. We're at our tax cap, we've already eliminated hundreds of positions over the past three years, and we do not anticipate action from the Legislature to have an effect before we begin a new budget year in July of 2005," Groppel said. "We don't want to lower homestead exemptions. We don't want to cut positions of those who are presently working in our district, but the facts are the facts. The current system of funding is going to begin taking a significant toll."
The district's trustees were presented with a budget development update on Tuesday morning. A preliminary budget will be presented to the board in May, with adoption scheduled for June.
The district's official budget for 2004-05 was $1.036 billion. The projected budget for the 2005-06 school year will be $1.048 billion, with a present shortfall of $15.759 million. Under the scenario discussed Tuesday, the option to use a portion of the district's fund balance—it's "rainy day fund," would reduce it to a little less than $101 million.
DISD currently has a local optional homestead exemption of 10 percent. The current taxable value associated with the optional homestead exemption is $2.4 billion. Because taxpayers are guaranteed a minimum exemption of $5,000 for the homestead exemption, there are limits that the district must consider if the rate was to be lowered.
"Lowering the exemption would not have an across the board effect, particularly because there is the guarantee of a $5,000 homestead exemption, and because of those who are over 65 years of age and are exempt from it to begin with," Groppel said. "We are not making a recommendation to the board at this time, but we certainly are putting options on the table for them to consider."
A five percent reduction in the optional homestead exemption and a 96.5 percent collection rate would mean revenues of between $12.6 million and $15 million for the district, Groppel said.
Approval to change the exemption must be made by trustees before June 30, 2005.
On a less desired note, the superintendent said the district must consider what would happen if an exemption rate reduction isn't used to generate revenue. He said district offices are considering the options associated with a reduction in force measure that could mean the elimination of 400 positions districtwide.
"No one wants to see filled positions eliminated, but if other options are not exercised first, we will have no choice but to make some very hard decisions and institute a reduction in force program that could lead to about 400 people's jobs being cut in the district," Groppel said. "We don't want this to catch anyone by surprise, but it is something that could happen."