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Klein ISD okays $550 million budget

August 28, 2018

Klein ISD’s board voted 6-0, with one trustee absent, to approve a $550 million budget Monday night, more than two months after voters in the northwest Houston-area district rejected a tax hike that would have injected an additional $30.2 million into the district’s coffers.

To make ends meet without the additional tax revenue, Klein budget officials used a series of one-year, stop-gap measures available to districts affected by Hurricane Harvey.The emergency financial maneuvering will allow the district to get an additional $15.1 million in state revenue.

School officials also slashed about $6 million in spending compared to its 2017-2018 budget, mostly in the form of staffing and benefits. Klein ISD will reduce its contributions to employee health insurance by $2.1 million, increase student-to-teacher ratios by one and eliminate permanent substitute teachers to save nearly $3.5 million.

Superintendent Brett Champion praised finance officials for creating a balanced budget that did not necessitate layoffs but said it reflects a sea-change in how the district must operate in the future.

“This was incredibly challenging, and while we celebrate the passage, we must never forget this is a change in the way we do business in Klein ISD,” Champion said.

The approved budget comes after voters on June 16 shot down a tax hike that would have raised its maintenance and operations tax rate from $1.04 per $100 of a home’s assessed value to $1.13. For a home valued at $200,000 with a $25,000 state homestead exemption, the tax increase would have amounted to about $13.13 more each month.

Tax ratification elections, or TREs, have become more common in recent years as school districts try to raise more local revenues to make up for dwindling state funds. Pasadena ISD, for example, avoided a $20 million deficit this year by passing a TRE in the fall of 2017. South San Antonio ISD failed to pass a TRE this month, which would have allowed them to raise an additional $6.3 million in revenue.

Before Klein ISD’s TRE failed, the district had expected to increase its spending by $22 million over 2017-2018 in order to create about 229 new positions to operate the new Hofius Intermediate, create a new grade level at Klein Cain High, add employees to its special education department and hire additional police officers. The district had already hired people for those positions before the TRE failed, which meant the district would need to eliminate roughly 224 jobs in other areas. Ultimately, those positions were eliminated through attrition, with current employees filling some of those vacancies.

Still, the district needed to cut an additional $6 million to make ends meet.

The biggest cuts came from eliminating permanent substitutes by contracting with subs on an as-needed basis instead of keeping some on retainer. The district will also cut its contributions to employees’ health insurance benefits to $311 across the board, including staff who have dependents on their plans.

Another factor in closing Klein’s projected budget deficit was an increase in local and state revenue thanks to the one-time Harvey measures, and an increase in local tax revenues from property value increases and growing student enrollments. Those factors will provide nearly $25 million in additional revenue over last year.

But when the $15.1 million in one-time Harvey-related funds dries up next year, Klein ISD Chief Financial Officer Dan Schaefer said the district will need to find more cuts to stay afloat.

“At this point, we still have a big gap we’ll have to close because of the one-time monies we’re getting this year,” Schaefer said. “We still have a long way to go before we can balance our budget.”

shelby.webb@chron.com

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