Budget deficit not as worrisome as it seems, officials said

Mauricio Julian Cuellar Jr., Alice Echo-News Journal

Alice ISD school trustees approved a three-cent tax increase above the effective tax rate during Tuesday's public meeting.

The tax rate for 2007-2008 will be $1.19650, which is above the $1.16714 effective tax rate, which is the rate necessary to collect the same amount of tax revenue as last year.

Because of tax rate compression mandated by the state, the school district's tax rate has decreased over the last three years, school officials said, from $1.64 per $100 property valuation in 2005, to $1.1986 per $100 of property valuation in 2007.

The school district is still looking at a deficit for the upcoming budget.

That deficit increased by $50,000 after board members approved a cost for new band uniforms, which haven't been purchased in eight years, board members said.

Varsity football players receive new uniforms every two to three years, superintendent Henry Herrera said, during the budget workshop process.

A portion of the cost will be paid by this year's budget and a portion from next year's budget.

The approved budget contains a deficit of $1,072,572.

The district is expected to have $37,217,214 in the general fund, with estimated expenditures of $38,289,786.

Board member Ciro Zamora said that although the district experienced a $1.2 million deficit last year, it looks like by the end of this year, the district will break even.

According to figures presented by AISD, the estimated ending fund balance for 2007 was $5,984,502, after the expected $1.2 million is removed.

Figures show the 2007 budget begins with an estimated fund balance of $7,600,000, which is higher than the beginning fund balance of 2006, which was $7,217,184.

"Last year, it looks like the fund balance wasn't touched," Zamora said. "There is a lot of underlying good for our taxpayers."

Board President R. David Guerrero agreed with Zamora's assessment.

"In the end, it always comes out better than anticipated," Guerrero said.

Herrera said nearly 75 percent of the current deficit comes from non-perpetual purchases, or a necessary one-time item. Perpetual purchases are items that come up every year the district needs to fund on an annual basis.

Herrera said items such as an Ag farm addition, possible bleacher reconstruction for the northside of the stadium and items like band uniforms are non-perpetual and not a constant annual expense. He said the district is conservative in their estimates as to student enrollment, and tax collection history.

"We plan for about 95 percent in collection and delinquent taxes, but history shows that in the end, the number is usually higher, at maybe 98 or 100 percent collection," Herrera said.

That increase of several hundred thousand dollars in district revenue will absorb some of the deficit in the end, which will keep the district from dipping into the fund balance, Herrera said.

Herrera also said if the district received an influx of 20 to 30 students over the course of the year, which would result in additional funding, the district could use those revenues to help lower the deficit.