THE BUDGETING PROCESS AND FUNDING
Dripping Springs ISD is committed to sound financial management through integrity, prudent stewardship, planning, accountability, full disclosure and open communication. Federal, state, and local guidelines govern the budget development process. The annually adopted budget includes the General Fund, Debt Service Fund, and Child Nutrition Fund.
DSISD’s proposed budget is prepared by the Superintendent and Chief Financial Officer, with participation of campus and department stakeholders within the provision of the Strategic Plan and state-mandated guidelines for programs.
Dripping Springs ISD builds its budget priorities around its vision and mission, while also meeting the challenges accompanied by student growth. In following those priorities, the district’s charge is to monitor spending in a way that results in the most efficient use of resources, within the limitations and mandates placed upon public schools by statute and regulations. A tight alignment is maintained between the overall budget and the district/school planning that helps DSISD be more efficient in meeting established priorities.
The budget includes four basic segments for review and evaluation:
- Personnel Needs/Costs
- Operational Costs
- Capital and other non-project costs
The budget process includes Board of Trustee budget workshops for the development of each segment, which provide for citizen feedback regarding the process, and allow for sufficient time for the Board of Trustees to address the strategic plan and fiscal issues. The proposed budget and all preliminary budgetary information is posted on the district's website for public view.
A Quick Look at Budget Development: This document details the budget development timeline, the different parts of the budget/tax rate, and the variables that factor into the budget.
Budget presentations were made at the April 19 board meeting and a half-day budget workshop was held June 2, 2021. Presentation links are available below.
During the budgeting process, needs are defined based upon established spending priorities, which tie back to the district vision, mission, and strategic plan. It is very clear that the critical needs of the district are programs that directly serve students; the employees of the district who administer and deliver those programs and the facilities required to support students. Within those categories the district relies on input from the campus administrators, teachers, department directors and staff, district administrators, the Board of Trustees, and the community to address how best to meet those critical needs in the budget process. In addition to input from groups such as the District Advisory Council and Campus Advisory Councils, parents and community members have the opportunity to make comments in public budget hearings at Board meetings.
Because Dripping Springs ISD is designated as a Chapter 41 district by the state of Texas, the district’s budget is impacted by mandatory recapture payments to the state. The amount of recapture is determined by the relationship of the district’s overall property wealth to the number of students served based on Weighted Average Daily Attendance (WADA). Due to state funding formulas and the methods for funding public education in Texas, most school districts –including DSISD – are capped in the additional revenue received when local property values increase.
DSISD’s recapture payment has fluctuated over the years since reaching Chapter 41 (now Chapter 49 with the passing of HB3) status. During the fiscal years 2013-16, the district was classified as a “gap district,” which meant DSISD was Chapter 41 district but did not pay recapture. Due to rising property values, recapture returned in 2016-17 with a payment to the state of $2,901,004. Over the next two years, the recapture payment increased by 183% to a cost of $8,214,196 for the 2018-19 fiscal year. However, with the passage of House Bill 3 by the State Legislature in June, 2019, the projected recapture amount for DSISD in 2019-2020 is $2,581,022, a reduction of 69% when compared to 2018-2019. DSISD’s recapture payment history can be viewed here.
The Texas Education Code establishes the legal basis for the budget development in school districts. These codes require that the District prepare a budget by the date set by the state board of education, currently June 19 for districts with a June 30 fiscal year end. The code further requires that the president of the Board of Trustees call a public meeting, giving 10 days public notice in a newspaper for the adoption of the district budget and posting a comparative proposed budget to the District’s website.
The Board of Trustees must adopt the prepared budget no later than June 30.
A school district’s tax rate consists of two parts: Maintenance and Operations (M&O) and Debt Service/Interest & Sinking fund (I&S). Maintenance and Operations taxes fund the General Operating Fund, which pays for salaries, supplies, utilities, insurance, equipment and the other costs of day-to-day operations.
The Debt Service tax pays off school bonds, somewhat like paying off the mortgage on a house. Revenue from the Debt Service tax rate can be used only to retire bonds sold for specific purposes: construction, renovations, buses, land, technology, and the cost of issuing bonds.
The District may not adopt a tax rate until after the District receives the certified appraisal roll as required by the Property Tax Code, typically on July 25. The District shall adopt its tax rate no later than Sept. 30. The tax rate is determined based on the amount of budgeted expenditures allocated to the General Fund, which accounts for operating expenses to serve the district’s growing student population (M&O), and the amount of money needed to meet payments on the district’s debt (I&S). Dripping Springs ISD had a total tax rate of $1.52 from 2014-15 to 2018-19. In 2019-20, following legislative action (House Bill 3) passed in the 86th session, DSISD's adopted rate dropped to $1.42 ($1.0684 M&O/.35 I&S) per $100 of certified property values. Actual tax bills received by homeowners are the product of the tax rate and the appraised property value.