1. Community Conversations HISD’s Budget & Legislative Overview

2. Overview of HISD 2 Number of Students202,773 Number of Schools298 Percent Economically Disadvantaged79.25% Percent Bilingual20.6% Percent ESL8.21% Percent LEP30.7% Percent At Risk63.2% Percent Special Education8.14% Percent Gifted/Talented13.35%

3. Overview of HISD 3 Accountability Ratings Exemplary Recognized Acceptable Unacceptable 84 121 47 12 Number of Staff Teachers Principals Assistant Principals Other Campus Staff School Support Personnel 12,829 255 381 4,654 10,850

4. 4 HISD Where does HISD gets its funding? ? ?

5. 5 HISD Major Funding Sources Include: General Operating Fund$1,659,507,068 Special Revenue Funds$ 341,016,845 (local, state and federal grants) Debt Service Fund$ 208,618,298 (principal/interest on bonds) Capital Projects Funds$ 211,186,408 (current year spend on bond projects) Food Service Funds$ 111,834,796 (National School Lunch and Breakfast Programs) Where does HISD get its funding?

6. 6 HISD Where does HISD get its General Operating Fund dollars? ? ?

7. 7 HISD Where does HISD get its General Fund dollars? Local Property Tax Revenue Current Taxes Delinquent Taxes State Revenue Foundation School Program Available School Fund Other Local Revenue Investment Income Rentals Insurance Recovery Sale of Bonds Transfers from other funds Crossing guard reimbursement from City of Houston Federal Revenue Indirect Costs Army, Air Force, Navy reimbursement

8. 8 HISD Local Taxes vs. State Formula Funding

9. 9 HISD Harris County School District Tax Rates

10. 10 HISD Where are the dollars currently budgeted? ? ?

11. 11 HISD General Fund: $1,659,507,068* Resource Allocation Funding $815,625,474 (49.15%) School Allocations (60%) Districtwide Accounts (26%) Support Services (14%) *Includes State Fiscal Stabilization Funds (SFSF) accounted for in a Special Revenue fund

12. 12 HISD Direct School Budget Funding (49.15%) Special Education Funding (5.97%) Utilities and Other Campus Allocations (3.37%) Magnet Funds (1%) School Allocations: $987,249,706 NOTE: Chart represents 60% of General Fund.

13. 13 HISD Operations--Police, Transportation, Custodial, Maintenance (8.25%) Human Resources: (.35%) Communications: (.29%) Chief of Staff: (.11%) Superintendent: (.03%) Audit: (.08%) Legal Counsel: (.06%) Other: (.05%) Support Services: $234,335,577 Academics (3.15%) Finance and Technology (2.15%) NOTE: Chart represents 14% of General Fund.

14. 14 HISD District-wide Accounts: 26% of General Fund District-wide Benefits - $184.9m Medicare TRS On-Behalf Health Insurance TRS Payroll Fees Workers’ Comp Retiree Benefits Unemployment Social Security District-wide Operations - $154.5m Debt Service Appraisal District Fees Tax Increment Reinvestment Zone (TIRZ) Property, Liability & Auto Insurance Utilities Other (Legal Fees, Audit Fees, Election Costs) District-wide Other - $98.5m Stipends Capital Outlay ASPIRE District programs

15. 15 HISD Operational Cost Increases The costs associated with the day-to-day operations of the school district have increased tremendously. 2004 (in millions) 2010 (in millions) Increase: 2004 to 2010 (in millions) Utilities$27.17$57.98$30.81 Property Insurance$4.10$6.69$2.59 Health Insurance$48.14$65.43$17.3 Transportation$28.06$34.29$6.23 Security$12.20$16.74$4.55 Maintenance$86.95$94.24$7.29 TRS Payroll Taxes$14.57$23.65$9.08 TOTAL INCREASE$77.85

16. 16 HISD General Fund Budget 2003 to 2011 Total budget increases$587,393,913 Total budget decreases$389,287,937 Net budget increase$198,105,976 Average Per Year$22,011,775 Average Percent Range$1.34% to 1.67% Appropriations adjusted to exclude capital, chapter 41 recapture and on-time fund balance contributions $1.00 expended in 2003 now requires $1.19 for the same expenditure. Average inflation rate was 2.5%

17. 17 HISD  State Comptroller’s revenue estimate projects a state shortfall of $28.6 billion  Statewide property value projections estimate a decrease in overall values  TEA shows increased cost of the Foundation School Program of $5.7 billion, plus replacing $3.25 billion in stimulus funds  Texas Senate Finance and House Appropriations Chairs have stated that education funding will be cut this session in order to balance the budget but don’t know by how much or how the cuts will be made What We Know Right Now

18. 18 HISD  Potential cuts and even elimination of some grant programs by the Texas Education Agency needed to balance the state budget, which will reduce services to district students  Pre-Kindergarten Funding ($4.8m)  Teacher Incentive Funding ($13.6m)  Student Success Initiative—academic support for students failing TAKS. ($2m)  Optional Extended Year Funding ($1.1m)  A portion of all school districts’ budgets are currently funded through the federal stimulus funds, which will expire at the end of the 2010–2011 fiscal year What We Know Right Now

19. 19 HISD  Health insurance costs are still trending upward and will require a budget increase in 2011–2012  Utility costs are expected to increase due to the Renew Houston drainage ordinance  Gasoline prices are rising  Title I funding offers less opportunities for district initiatives due to required set-asides What We Know Right Now

20. 20 HISD  By law, HISD must adopt a budget by June 30, 2011  It takes 7–9 months to complete a review of the district’s budgets and priorities  Budget must be prepared with an anticipated shortfall that will have to be adjusted in spring or summer 2011  Superintendent’s Cabinet is meeting to discuss budget process, potential issues, and how to engage schools and communities Potential Issues for HISD

21. 21 HISD  Develop a budget that potentially cuts the funds necessary to balance the budget.  Review of all central-office departmental budgets and organization charts  Review of business operations (custodial, police, transportation) to look at how services are provided and if there are alternatives to current service models  Review of district-wide activities for possible cost reductions  Modeling of cuts to school allocations and impact on schools  Human resource implications from cuts  Review of district-wide educational program models to check alignment against strategic plan as well as results from prior years Budget Review Process

22. 22 HISD  Deputy Chief Academic Officer  Chief Financial Officer  Chief Schools Officers (3)  Chief Operating Officer  Chief Communications Officer  Chief of Staff  Chief Human Resources Officer  Chief Officer of Major Projects  General Counsel  Assistant Superintendent for Academic Services  General Manager, Budget and Financial Planning  Controller Superintendent’s Budget Committee

23. 23 HISD  Role of committee is for input and feedback  Committee Participation: –Principals (10) High Schools (2) Middle Schools (2) Elementary Schools (6) –Public Engagement Committee (2) –Superintendent’s Parent Advisory Committee (2) –District Advisory Committee (2) The Budget Advisory Committee will meet once in November, once in December, and twice monthly starting in January. Budget Advisory Committee

24. 24 HISD  Board Member Constituent Meetings  District Advisory Committee  Superintendent’s Public Engagement Committee  Superintendent’s Parent Advisory Committee  Principal Advisory Committee  Consultation Groups  Hattie Mae White Educational Support Center Employees  Monthly Principal Meetings Other Regular Meetings

25. 25 HISD  Ensure that the Legislature maintains the current level of funding to school districts that accounts for student population growth and also covers ARRA funds used to replace Foundation School Funding during the 2009 legislative session.  Preserve funding for full-day prekindergarten and extended-year programs.  Maintain the funding available through the District Awards for Teacher Excellence (DATE) grant.  Allow the district to receive school start date waivers for 20% of its schools.  Allow middle-grade students who are completing core courses for high-school credit to be assessed with the relevant end-of-course examination(s). HISD Legislative Agenda

26. 26 HISD  HISD partnering with Cypress-Fairbanks, Spring and Spring Branch ISDs on a Legislative 101 training for parents and community members on January 27 at 8:30 a.m. at HMW  How districts can work together on legislative issues important to Houston children will be discussed  Contact the offices of the Governor, Lt. Governor and legislators to let them know that funding for public education should be preserved and why it is important for your child’s success. Go to: http://www.houstonisd.org/portal/site/GovernmentalRelations and click on Legislative Contacts http://www.houstonisd.org/portal/site/GovernmentalRelations How Can You Help During the Legislative Session?

27. 27 HISD  For parents, work with your school’s PTA/PTO or Parents for Public Schools  Sign up to receive twitter messages from Houston ISD’s Government Relations Department for legislative updates: www.twitter.com/HoustonISDGov How Can You Help During the Legislative Session?

28. 28 HISD Q & A Budget Suggestions/Comments—Send to: CFOcomments@houstonisd.org