Midland Independent School District finances (1993-2013)
While revenues, expenditures and debt all increased in the Midland Independent School District in Texas from 1993 to 2013, debts grew at a rate outpacing the former items. The district's debts saw a percent change increase of 294 percent, revenues 102 percent and expenditures 87 percent.
The district saw an average of $153,158,048 in revenue and $153,529,333 in expenditures, according to the United States Census Bureau's survey of school system finances. The district had a yearly average of $90,835,000 in outstanding debt. The district retired $9,988,810 of its debt and issued $16,133,429 in new debt each year on average.[1]
The graph below shows the district's revenues, expenditures and debts in millions of dollars by year. For more information about recent financial and budget issues in the district, see the issues section. To learn more about how Midland ISD's finances compare to the finances of other districts, see Midland Independent School District in context.
Budget process
The budget for Midland ISD is set annually by the district's board of trustees, a process outlined in Chapter 44 of the Texas Education Code. Texas school districts may choose to begin their fiscal years on May 1 or September 1. The sections below briefly outline some of the key procedural steps in the budget process.[2]
Proposal
A proposed budget for each fiscal year is drafted by the district superintendent in consultation with other district administrators. The superintendent is responsible for all the necessary state filings for the district's proposed and adopted budget each year. After the draft budget has been created, the board of trustees holds a meeting to approve the budget and tax rate.[2]
Advertisement
The annual budget meeting must be publicly advertised in a local newspaper between 10 and 30 days prior to the meeting's date. The advertisement must follow standard language from the Education Code:[2]
| “ | The notice of public meeting to discuss and adopt the budget and the proposed tax rate may not be smaller than one-quarter page of a standard-size or a tabloid-size newspaper, and the headline on the notice must be in 18-point or larger type. Subject to Subsection (d), the notice must:
"The (name of school district) will hold a public meeting at (time, date, year) in (name of room, building, physical location, city, state). The purpose of this meeting is to discuss the school district's budget that will determine the tax rate that will be adopted. Public participation in the discussion is invited." The statement of the purpose of the meeting must be in bold type. In reduced type, the notice must state: "The tax rate that is ultimately adopted at this meeting or at a separate meeting at a later date may not exceed the proposed rate shown below unless the district publishes a revised notice containing the same information and comparisons set out below and holds another public meeting to discuss the revised notice."[3] |
” |
| —Texas Education Code, Sec. 44.004 (2006)[2] | ||
Section 44.004 goes on to detail all of the requirements of the meeting advertisement. Additionally, the district must publish a summary of the proposed budget on its website. The summary is required to include per-student and aggregate spending on instruction, instruction support, central administration, district operations, debt service and other categories that may be designated by the Texas Commissioner of Education.[2]
Approval
A simple majority of board members must vote in favor of the proposed budget at the advertised meeting in order for it to be adopted. Following its adoption, the budget must be submitted to the State Board of Education.[2]
The board may deviate from the adopted budget by amending the budget or by adopting "a supplementary emergency budget to cover necessary unforeseen expenses." Such amendments or supplemental budgets must also be submitted to the state board.[2]
Audit
At the end of each fiscal year, the district's finances must be audited "by a certified or public accountant holding a permit from the Texas State Board of Public Accountancy." This independent audit is reviewed by the state education agency.[2]
Revenue
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From 1993 to 2013, Midland ISD averaged $153.2 million in revenues per year. The 2013 fiscal year saw the highest overall revenues during that period at $222.6 million; the lowest total occurred in 1994 with $105.9 million. Overall, revenues more than doubled during this period with an overall increase of 201.7 percent from 1993 to 2013.
The division of revenues across local, state and federal sources, however, did not change uniformly with the overall revenues increase. During this period, the portion of funds from federal sources more than doubled; the local portion in 2013 was 1.4 times that of its portion in 1993. Revenues from state sources in 2013, meanwhile, reduced to less than a third of their 1993 levels.
The table below separates the district's revenue into the three sources identified by the agency: local, state and federal. In addition to total dollar amounts, the table provides a percent for the portion of the total revenues from each source.
| Revenue by Source | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Fiscal Year |
Local | State | Federal | Revenue Total | |||||||
| Total | % of Revenue | Total | % of Revenue | Total | % of Revenue | ||||||
| 1993 | $60,747,000 | 55.05% | $44,110,000 | 39.98% | $5,485,000 | 4.97% | $110,342,000 | ||||
| 1994 | $49,105,000 | 46.35% | $48,465,000 | 45.75% | $8,376,000 | 7.91% | $105,946,000 | ||||
| 1995 | $50,969,000 | 45.96% | $50,182,000 | 45.25% | $9,757,000 | 8.80% | $110,908,000 | ||||
| 1996 | $53,403,000 | 46.96% | $50,714,000 | 44.59% | $9,610,000 | 8.45% | $113,727,000 | ||||
| 1997 | $56,145,000 | 47.52% | $52,436,000 | 44.38% | $9,562,000 | 8.09% | $118,143,000 | ||||
| 1998 | $61,709,000 | 48.27% | $56,175,000 | 43.94% | $9,957,000 | 7.79% | $127,841,000 | ||||
| 1999 | $67,296,000 | 51.09% | $52,451,000 | 39.82% | $11,965,000 | 9.08% | $131,712,000 | ||||
| 2000 | $67,090,000 | 50.37% | $53,696,000 | 40.31% | $12,408,000 | 9.32% | $133,194,000 | ||||
| 2001 | $71,354,000 | 51.61% | $54,460,000 | 39.39% | $12,446,000 | 9.00% | $138,260,000 | ||||
| 2002 | $77,943,000 | 51.89% | $57,310,000 | 38.15% | $14,953,000 | 9.95% | $150,206,000 | ||||
| 2003 | $76,442,000 | 51.09% | $54,967,000 | 36.74% | $18,217,000 | 12.18% | $149,626,000 | ||||
| 2004 | $79,701,000 | 52.45% | $53,650,000 | 35.31% | $18,594,000 | 12.24% | $151,945,000 | ||||
| 2005 | $87,869,000 | 56.55% | $49,310,000 | 31.73% | $18,205,000 | 11.72% | $155,384,000 | ||||
| 2006 | $97,004,000 | 57.50% | $49,942,000 | 29.60% | $21,754,000 | 12.90% | $168,700,000 | ||||
| 2007 | $107,827,000 | 60.64% | $50,062,000 | 28.15% | $19,931,000 | 11.21% | $177,820,000 | ||||
| 2008 | $99,968,000 | 54.53% | $63,022,000 | 34.38% | $20,341,000 | 11.10% | $183,331,000 | ||||
| 2009 | $113,819,000 | 60.55% | $52,457,000 | 27.91% | $21,706,000 | 11.55% | $187,982,000 | ||||
| 2010 | $119,319,000 | 61.83% | $43,252,000 | 22.41% | $30,400,000 | 15.75% | $192,971,000 | ||||
| 2011 | $126,132,000 | 65.17% | $39,170,000 | 20.24% | $28,236,000 | 14.59% | $193,538,000 | ||||
| 2012 | $137,559,000 | 71.59% | $31,464,000 | 16.37% | $23,129,000 | 12.04% | $192,152,000 | ||||
| 2013 | $171,901,000 | 77.23% | $28,207,000 | 12.67% | $22,483,000 | 10.10% | $222,591,000 | ||||
| Avg. | $87,300,095 | 55.44% | $49,309,619 | 34.15% | $16,548,333 | 10.42% | $153,158,048 | ||||
Expenditures
From 1993 to 2013, Midland ISD averaged $153.5 million in expenditures annually. The highest expenditures occurred in 2009, with a total of more than $206.7 million; the lowest expenditures occurred in 1994 at $105.9 million. Overall, expenditures increased 186.6 percent from 1993 to 2013.
The table below separates the district's expenditures into five categories identified by the agency:
- Instruction: operation expenditures, state payments on behalf of the district for instruction and benefits, and retirement system transfers
- Support Services: support services, food services and retirement system transfers for support service staff
- Capital Spending: capital outlay expenditures (i.e., construction, land or facilities purchases, and equipment purchases)
- Debt & Gov. Payments: payments to state and local governments and interest on school system debt
- Other: all other non-K-12 programs, except food services
Increases in these expenditures have varied across each category. Instruction and support services saw the largest increases over this period. The portion of expenditures for instruction increased by almost 8 percent, and those for support services increased by over 4 percent. The debt and government payments category saw a slight decrease in its overall portion of spending, falling less than a tenth of a percent. Capital spending saw wide variations, indicative of the nature of large but generally temporary expenditures typical of that category.
| Expenditures by Category | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Fiscal Year |
Instruction | Support Services | Capital Spending | Debt & Gov. Payments | Other | Budget Total | |||||
| Total | % of Budget | Total | % of Budget | Total | % of Budget | Total | % of Budget | Total | % of Budget | ||
| 1993 | $50,462,000 | 46.13% | $33,395,000 | 30.53% | $23,006,000 | 21.03% | $2,507,000 | 2.29% | $17,000 | 0.02% | $109,387,000 |
| 1994 | $58,885,000 | 55.61% | $38,157,000 | 36.04% | $6,961,000 | 6.57% | $1,867,000 | 1.76% | $15,000 | 0.01% | $105,885,000 |
| 1995 | $61,373,000 | 56.94% | $39,033,000 | 36.22% | $5,437,000 | 5.04% | $1,930,000 | 1.79% | $7,000 | 0.01% | $107,780,000 |
| 1996 | $63,340,000 | 57.78% | $39,742,000 | 36.25% | $4,523,000 | 4.13% | $1,897,000 | 1.73% | $123,000 | 0.11% | $109,625,000 |
| 1997 | $66,068,000 | 56.69% | $41,154,000 | 35.31% | $6,627,000 | 5.69% | $1,900,000 | 1.63% | $795,000 | 0.68% | $116,544,000 |
| 1998 | $68,720,000 | 52.69% | $43,591,000 | 33.43% | $14,422,000 | 11.06% | $2,841,000 | 2.18% | $840,000 | 0.64% | $130,414,000 |
| 1999 | $72,625,000 | 52.16% | $46,336,000 | 33.28% | $16,779,000 | 12.05% | $2,511,000 | 1.80% | $994,000 | 0.71% | $139,245,000 |
| 2000 | $76,104,000 | 52.94% | $47,145,000 | 32.79% | $16,749,000 | 11.65% | $2,816,000 | 1.96% | $950,000 | 0.66% | $143,764,000 |
| 2001 | $79,974,000 | 56.12% | $48,903,000 | 34.32% | $7,267,000 | 5.10% | $5,305,000 | 3.72% | $1,051,000 | 0.74% | $142,500,000 |
| 2002 | $82,849,000 | 59.17% | $49,212,000 | 35.15% | $2,487,000 | 1.78% | $4,307,000 | 3.08% | $1,154,000 | 0.82% | $140,009,000 |
| 2003 | $85,736,000 | 59.56% | $52,425,000 | 36.42% | $1,902,000 | 1.32% | $2,607,000 | 1.81% | $1,291,000 | 0.90% | $143,961,000 |
| 2004 | $84,735,000 | 52.81% | $53,364,000 | 33.26% | $16,846,000 | 10.50% | $4,264,000 | 2.66% | $1,252,000 | 0.78% | $160,461,000 |
| 2005 | $86,191,000 | 46.79% | $55,530,000 | 30.15% | $35,991,000 | 19.54% | $5,185,000 | 2.81% | $1,303,000 | 0.71% | $184,200,000 |
| 2006 | $91,620,000 | 51.42% | $58,773,000 | 32.99% | $21,552,000 | 12.10% | $4,727,000 | 2.65% | $1,507,000 | 0.85% | $178,179,000 |
| 2007 | $94,332,000 | 56.58% | $60,554,000 | 36.32% | $4,867,000 | 2.92% | $4,891,000 | 2.93% | $2,071,000 | 1.24% | $166,715,000 |
| 2008 | $96,462,000 | 51.75% | $65,167,000 | 34.96% | $16,229,000 | 8.71% | $6,478,000 | 3.48% | $2,056,000 | 1.10% | $186,392,000 |
| 2009 | $101,366,000 | 49.04% | $69,437,000 | 33.59% | $27,784,000 | 13.44% | $6,148,000 | 2.97% | $1,973,000 | 0.95% | $206,708,000 |
| 2010 | $103,873,000 | 54.57% | $72,862,000 | 38.28% | $5,766,000 | 3.03% | $5,875,000 | 3.09% | $1,958,000 | 1.03% | $190,334,000 |
| 2011 | $103,124,000 | 56.70% | $68,478,000 | 37.65% | $2,281,000 | 1.25% | $5,674,000 | 3.12% | $2,320,000 | 1.28% | $181,877,000 |
| 2012 | $99,120,000 | 56.33% | $65,921,000 | 37.46% | $4,058,000 | 2.31% | $4,584,000 | 2.60% | $2,295,000 | 1.30% | $175,978,000 |
| 2013 | $110,133,000 | 53.94% | $70,621,000 | 34.59% | $16,198,000 | 7.93% | $4,843,000 | 2.37% | $2,363,000 | 1.16% | $204,158,000 |
| Avg. | $82,718,667 | 54.08% | $53,323,810 | 34.71% | $12,272,952 | 7.96% | $3,959,857 | 2.50% | $1,254,048 | 0.75% | $153,529,333 |
Debt
Midland ISD's outstanding debt nearly quadrupled from 1993 to 2013. While the district averaged $90.8 million in outstanding debts annually during this period, the overall amount of debt continued to trend upwards during this period and peaked at $174.8 million in 2013.
The district retired some of its debt each year, but it also issued new debts in two-thirds of the years examined. On average, each year saw the district issue 1.62 times the amount of debt that it retired. The average retired debts equaled almost 11 percent of the average outstanding debt at the end of each year.
The table at the left shows the amount of debt retired, issued and outstanding in the district for each year. The graph above displays the same information as a chronological line graph, with the green line representing the average outstanding debt across the entire time period.
For more information about the role of bonds in the district's finances and debt, see the bonds section of this page and the district's bond history page.
| Debt | |||
|---|---|---|---|
| Fiscal Year |
Retired | Issued | Outstanding |
| 1993 | $14,422,000 | $13,927,000 | $44,396,000 |
| 1994 | $22,580,000 | $22,977,000 | $44,794,000 |
| 1995 | $2,535,000 | $492,000 | $42,852,000 |
| 1996 | $2,564,000 | $520,000 | $40,711,000 |
| 1997 | $2,460,000 | $20,000,000 | $48,380,000 |
| 1998 | $3,862,000 | $0 | $44,518,000 |
| 1999 | $4,925,000 | $21,115,000 | $65,714,000 |
| 2000 | $3,530,000 | $2,180,000 | $64,880,000 |
| 2001 | $1,986,000 | $0 | $62,908,000 |
| 2002 | $1,633,000 | $0 | $59,744,000 |
| 2003 | $23,264,000 | $55,420,000 | $91,897,000 |
| 2004 | $4,530,000 | $26,976,000 | $114,993,000 |
| 2005 | $1,843,000 | $0 | $112,717,000 |
| 2006 | $15,442,000 | $14,015,000 | $111,720,000 |
| 2007 | $4,465,000 | $37,035,000 | $145,973,000 |
| 2008 | $6,195,000 | $0 | $139,402,000 |
| 2009 | $10,465,000 | $4,635,000 | $132,815,000 |
| 2010 | $4,965,000 | $0 | $128,300,000 |
| 2011 | $5,500,000 | $0 | $122,928,000 |
| 2012 | $57,800,000 | $49,335,000 | $113,130,000 |
| 2013 | $14,799,000 | $70,175,000 | $174,763,000 |
| Avg. | $9,988,810 | $16,133,429 | $90,835,000 |
Bonds
Budget issues
Midland joins 600 districts suing Texas government
On September 1, 2015, lawyers for both the state of Texas and 600 school districts in the state made their oral arguments in a lawsuit over funding issues.[4] Joining the districts was Midland ISD.
According to David Garcia, the district's CFO, Midland must give over $50 million in funds for the 2015-2016 school year so that the state can re-distribute the money to "property poor" districts in Texas. "It is a real challenge for us, having to send the amount of money that we are having to send the state on trying to balance property poor versus property rich. All the while we're only going to be receiving about 4 million dollars in state funding to educate our kids so the bulk of it, 236 million dollars of out [sic] budget that was just approved last week, is being funded by our local tax payers," said Garcia.
On the other hand, Attorney General Ken Paxton's office responded that, though not perfect, public education money fulfills Texas constitutional standards for an efficient system providing a "general diffusion of knowledge."[5] The Texas Supreme Court has no set timeline to decide on the case, but according to The Texas Tribune, "The consensus among experts and insiders is that a decision will come early next year and likely will require a 2016 special legislative session because it will favor, at least in part, the 600 school districts suing the state."[6]
2015–2016 shortfall
In June 2015, it was reported by the Midland Reporter-Telegram that the district could experience a $24 million financial shortfall for the 2015-2016 school year. The district struggled financially in the 2014-2015 school year as well, when it feared (but did not ultimately experience) a $3.7 million deficit. The uptick was attributed to a number of factors, namely state funding formulas, decreases in student enrollment and an oil downturn that affected local property valuations. A factor in the funding decrease appears to be the state's "Robin Hood" program, which recaptures property tax revenue from wealthy school districts and redistributes it to "poorer" districts. As it stands, the state is set to recapture anywhere from $47 million to $57 million from Midland. The numbers are based on the district's 2014 property tax values, which are significantly higher than the present rates.[7]
Current estimates state that Midland ISD's enrollment will decrease by 700 students in the 2015-2016 school year. Since enrollment numbers factor into the amount the district receives from the state, the district gets to keep less of the allocated money. "We want more kids in seats because that’s more money that we’re collecting from our local taxpayers that gets to stay here in Midland,” said Midland's Chief Financial Officer David Garcia. District officials won't know the exact enrollment count until the 2015-2016 school year begins.[7]
Unfortunately for teachers, the district might need to look to teacher salaries—which take up 85 percent of the budget—when making cuts. "When you have the potential to lose $24 million, and 85 percent of your budget is in salaries, and the biggest part of those salaries are in classrooms, there’s going to be an impact of course," said Garcia.[7]
Robin Hood law
Chapter 41 of the Texas Education Code provided for the redistribution of property tax revenues to equalize resources for schools throughout the state. In 1993, the Texas legislature enacted a plan requiring equitable school financing for all districts in the state. It became known as the "share the wealth" or "Robin Hood" law (for the legendary thief who robbed from the rich and gave to the poor). This bill took property tax revenue from wealthier regions of the state and shared those funds to less prosperous regions.[8]
According to Midland's chief financial officer, David Garcia, the district was property wealthy since 2007; however, he said it had to pay approximately $16 million in the 2013 fiscal year. Garcia added that Midland would have to send more money to the Robin Hood fund in the next fiscal year. "We have no option," he said.[9]
On November 5, 2013, voters living in the Midland school district were asked to give trustees permission to buy "attendance credits" which would adjust the district's per-student income level to match the state average.[10] In a message to the community published by the Midland Reporter-Telegram on October 21, 2013, Midland Superintendent Warren explained the need for this referendum as laid out in the Robin Hood law.[11] The initiative passed with 57 percent of the vote.[12]
See also
External links
- Midland Independent School District
- United States Census Bureau: Public School System Finances
- Electronic Municipal Market Access
Footnotes
- ↑ United States Census Bureau, "Public School System Finances: Historical Data," accessed December 1, 2015
- ↑ 2.0 2.1 2.2 2.3 2.4 2.5 2.6 2.7 Texas State Legislature, "Education Code," accessed December 4, 2015
- ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
- ↑ NewsWest9.com, "School Funding Lawsuit Goes to Texas Supreme Court," accessed November 24, 2015
- ↑ Huffington Post, "Case With More Than 600 School Districts Suing Texas Goes To State Supreme Court," accessed November 24, 2015
- ↑ The Texas Tribune, "Experts: Expect Early 2016 School Finance Ruling," accessed November 24, 2015
- ↑ 7.0 7.1 7.2 Midland Reporter-Telegram, "MISD could lose $24 million 2015-16 school year," May 17, 2015
- ↑ Texas Education Agency, "Chapter 41 Wealth Equalization," accessed December 18, 2015
- ↑ Odessa American, "School districts cope with Robin Hood requirements," June 25, 2014
- ↑ Midland Reporter-Telegram, "Chapter 41, TEA-mandated election required for MISD," October 20, 2013
- ↑ Midland Reporter-Telegram, "Ryder Warren: School going smoothly with impending change in district," October 21, 2013
- ↑ Midland Reporter-Telegram, "Recap: 2013 Election night," November 5, 2013
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