Houston ISD Faces $208 Million Budget Shortfall For 2018-19

HOUSTON, TX — The Houston Independent School District (HISD) is in the works to prepare a budget for the upcoming 2018-2019 school year, and the district announced it's 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 in the upcoming school year, which will mean a significant decrease in state funding. The district also anticipates Hurricane Harvey 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. HISD has yet to receive any indication how much, and when, they’ll be reimbursed for Harvey-related expenditures.

Combined with the district’s 2018-2019 recapture payment, this creates an estimated $208 million deficit and will force HISD to make choices about how funds will be allocated at the school and district levels for the upcoming 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."

HISD has reviewed its current funding model and will propose a shift for the next school year. Schools currently 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 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 percent of the $208 million deficit.

HISD Board of Education members reviewed a draft budget proposal, which includes recommendations from the Principal Advisory committee and proposed department cuts, at a workshop last Thursday.

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.

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