By BILL PETERSON
Editor at Large
Don’t be too surprised if the Hays CISD trustees go to voters asking for a tax increase next year. If they want to keep giving pay raises to teachers, they may not have a choice.
Trustees wrestled with the 2008-09 budget Monday evening, trying to work in pay raises of $1,000 for teachers and two percent for other employees. The proposal to raise compensation for 1,945 school district employees costs $3.5 million.
School officials believe they can work that increase into the new budget for next year. But such a pay raise stands to be a problem the following year.
In the past, the Hays district has generally stayed below the state maximum Maintenance & Operations (M&O) tax rate of $1.50 per $100 of taxable property value. However, school finance reform in recent years has reduced that maximum to $1.04, and Hays is right on it. If the district wants to raise taxes beyond that amount, it needs voter approval.
School districts charge two tax rates. The M&O rate raises operating funds for payroll, utilities and other annual expenses. The Interest & Sinking (I&S) rate pays for debt service to finance capital improvements, such as new schools.
On the I&S side, Hays CISD benefits from local commercial development because those revenues aren’t shared in the state’s Robin Hood system. Thus, the school district passed a $46.3 bond issue in 2006 without a tax rate increase, and it’s going back to voters on May 10 for $86.7 million, again without a tax rate increase.
The M&O rate works differently. Traditionally, Hays is a so-called “property poor” school district, meaning it receives revenue-sharing money from the state for M&O. However, as property values in the school district increase, the school district receives less money from the state.
So, the Hays CISD is in a position in which it can raise increasing money without raising the tax rate on the I&S side. But school officials don’t believe they can increase funds enough to maintain programs and keep up with increasing payroll expenses on the M&O side unless without raising the tax rate.
Hays CISD Superintendent Kirk London said the school district has to compensate employees along the lines of suburban districts in order to stay competitive. London not only wants to pay teachers better, but growth calls for the school district to continue adding teachers. The budget for next year includes 31 new teachers, five special education teachers and four “reserve” teachers in case enrollment exceeds projections.
For now, school officials believe they can handle the increases within the budget. But the following year is shaky.
“We are not able to raise taxes at all without having an election,” Trustees President Chip DuPont said. “We have no leeway without having an election. We’ve got to look at it and say, ‘This is the rule,’ and plan accordingly … The following year, we’re going to have to have an election. That’s the only way we can do salary increases from now on.”