Financial impact of Harvey and recapture creating deficit for 2018-2019 school year

As HISD begins to prepare a budget for the upcoming 2018-2019 school year, the district is estimating a $208 million shortfall as result of the financial impact of Hurricane Harvey and recapture.

HISD has seen a decline in student enrollment and is planning for a further decline for the coming school year, which will mean a decrease in state funding. The district also anticipates the storm will have a significant impact on the city’s property values, which will be released in April 2018. HISD’s main source of funding is property tax dollars. To date, the district has received no indication of how much and when they’ll be reimbursed for Harvey-related expenditures.

Click here for a complete FAQ on HISD’s 2018-2019 budget. This document will be updated frequently.

These factors, combined with the district’s 2018-2019 recapture payment, is creating an estimated $208 million deficit and is requiring HISD to make difficult choices about how funds will be allocated at the school and district level for the upcoming 2018-2019 school year.

“While we may have made it through Hurricane Harvey, we are now firmly in the financial storm,” said HISD Superintendent Richard Carranza. “The financial struggles brought by Harvey, recapture, and school finance have put us in a difficult position, but it is our duty to proceed thoughtfully about the resources, materials, and staffing we need to ensure we meet our goals of educating the whole child and providing all students with the essential services they need to be successful.”

Utilizing an equity lens, the district has reviewed its current funding model and is proposing a shift for the 2018-2019 school year. Currently, schools receive funding through a Per Unit Allocation (PUA), which allocates dollars per student and allows principals to decide how those dollars are used on their campus. Under the proposed staffing model, or Full-Time Equivalent (FTE) model, principals will still decide whom they will hire, but the district will ensure that every school has essential positions such as a nurse, counselor, and librarian. Schools would be assigned positions rather than dollars based on the number of students they serve.

A Principal Advisory Committee has been assembled to assist with the process of creating the district FTE model in a way that meets the needs of all schools. The committee includes representatives from all trustee districts, school levels, and types of schools. The committee has, and will continue to meet, regularly with the HISD budgeting department to offer their feedback, which will be included in all budget presentations made to HISD Board of Education.

In addition to the proposed FTE school budgeting model, all HISD departments are being asked to make cuts for the coming school year totaling $116 million, which is 56% of the $208 million deficit.

HISD Board of Education members will review a draft budget proposal, which includes recommendations from the Principal Advisory committee and proposed department cuts, at a workshop on Thursday, Feb. 1, at 2 p.m.

Future board workshops and community meetings will be held over the coming weeks and months to review changes and updates to the proposed budget. By law, the HISD Board of Education must approve a budget by June 30, 2018.