Welcome to Season 2 of Clear Creek ISD's Clearity Podcast series. In this episode of Let's Talk CCISD, Dr. Karen Engle, Alice Benzaia, and Elaina Polsen share an update on school funding.
It's Time to Talk, CCISD.
Join Dr. Karen Engle, Alice Benzaia, and Elaina Polsen for this episode of Let's Talk CCISD—a podcast for Clear Creek ISD employees to keep them updated on what's happening in our District. We are back for season 2 and in the first episode, the team discusses school funding, tax rate and bond elections, and more related to CCISD.
Click here for the presentation discussed in this episode.
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Speaker 1
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Speaker 3
Hello and welcome to our Let's Talk CCISD podcast. Today we are joined by Dr. Karen Engle, Superintendent of Schools, and Alice Benzaia, Chief Financial Officer. Dr. Engle as we are recording this podcast, we are in the midst of welcoming new teachers to Clear Creek ISD. You had the opportunity to visit with teachers new to education and shared with them the power of our star.
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Speaker 3
Can you share a little bit more about your message to our employees?
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Speaker 1
Yes. It was so exciting to me with all the brand new teachers to the profession. It's a little overwhelming, I think too, to come into a profession and explained our district. We have over 5000 employees, 46 schools, two counties, and about 110 square miles and and joining an organization like that, but really emphasize the fact that the district is their family and then their school is their home away from home, their school family.
00;00;57;13 - 00;01;21;01
Speaker 1
And our emphasis is on belonging and being a part of that school community. And we did talk about the star and our logo that we've had for over 70 years is our Clear Creek ISD star and what that means and thinking about we've had a lot of input and a lot of discussion on what does that mean to us.
00;01;21;04 - 00;01;43;05
Speaker 1
And the star is truly a symbol of hope, of excellence, innovation, integrity, family, collaboration, and many, many more things. But they'll come to know that. But they were excited to be here and little bit nervous. But we know as we get into this school year, we have an amazing group of outstanding new to the profession teachers.
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Speaker 3
We certainly do. Today's topic is to explain to our listeners about the financial challenges many school districts are facing and how we in Clear Creek ISD plan to overcome them. As many of our listeners know, the 88th Legislature adjourned at the end of May without coming to an agreement of how to fund public education, especially in light of inflation.
00;02;02;08 - 00;02;31;25
Speaker 3
In fact, we had a podcast not too long ago on this very topic when the legislature was in session and we were talking about the need for a minimum of a $1,000 increase in the basic allotment to just cover the increasing cost of education. And they adjourned and did not do anything with that basic allotment. And while they may come around to that at a later date, we're having conversations with our community about how to best support our teachers and our staff here in Clear Creek ISD.
00;02;31;27 - 00;02;53;17
Speaker 3
And so we've had five community meetings to talk about this topic and the complexities of school funding. Dr. Engle and Alice Benzaia will go through the presentation titled Power of Pennies. The presentation materials will also be included in this podcast for listeners. So Alice, do you want to or Dr. Engle, you can get us started,
00;02;53;17 - 00;03;19;13
Speaker 1
Yeah, I'd be happy to. And just kind of starting off. Just like I said, I'm Clear Creek ISD offers quality education and for more than 40,000 students and the heart of the organization lies with the people and the people who work here. And we're welcoming those new people. And we know that our community values what we offer, and that's why we're turning to the community for help.
00;03;19;13 - 00;03;48;09
Speaker 1
And we've been talking about a voter approval tax rate election. As we go through the intricacies, I guess in the complexities of this, I've found the state funding system. There are really two buckets when it comes to monies as we work through our funding in the district. Maintenance and operations covers the basic things that we use everyday expenses like you would use at home.
00;03;48;11 - 00;04;13;21
Speaker 1
The fund pays for insurance, fuel, electricity and this is where our salaries come from. And we have 90% of our general fund or maintenance and operation is spent on people because we're in the people business of educating children. So all of those moneys combined are what we use, what you would do in a household every day. We also have another bucket, Interest and Sinking.
00;04;13;23 - 00;04;45;14
Speaker 1
And this these monies are what I like to equate to is taking out a home loan or a car loan. These are things that we use somewhat like a mortgage. We pay off long term debt with our interest and sinking, and we accrue this by selling bonds. So this money we would pay for new facilities, renovating, major renovations, maintenance and repairs on things that remember 90% of our daily operating budget comes is for people.
00;04;45;14 - 00;05;02;13
Speaker 1
So we don't have a lot left over for these major projects like you would at home. The interest and Sinking Fund, the bonds cannot be transferred to operations, so we can never transfer those monies to utilize those for basic operations.
00;05;03;04 - 00;05;19;22
Speaker 3
And also the maintenance and operations tax rate that we'll be talking about during this podcast that is tightly regulated, frankly, by the state of Texas, that as property values go up, the state requires us to lower our taxes and our tax rate history shows that.
00;05;19;22 - 00;05;49;17
Speaker 1
Yes, as a matter of fact, our tax rate history and we just have some information from 2016 to 2023, but the combined tax rate has been going down over the years, as you can see. And taxpayers will see a further tax rate decrease thanks to the legislation passed just two weeks ago. Ah, several weeks ago now, I believe, as well as a $100,000 homestead exemption that the voters will have an opportunity to approve in November.
00;05;49;20 - 00;06;15;13
Speaker 1
But our tax rate continues to go down while our expenses have, you know, and those monies with the tax rate going down, we don't receive any additional moneys in the school district. And we do we're kind of in a situation now with inflation, I think. Ms. Benzaia will talk about that. We haven't received any increased funding, but the taxpayers have received, all of us,
00;06;15;15 - 00;06;20;05
Speaker 1
most of us, anyway, have received will receive a decrease in our taxes.
00;06;21;10 - 00;06;26;25
Speaker 3
And Ms. Benzaia, do want to talk a little bit about our budget, where we stand today, and what it looks like in the future.
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Speaker 4
Sure.
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Speaker 4
So we have been and we always have a long range projection here at Clear Creek ISD and in our general fund budget, which is the bucket that Dr. Engle spoke about that funds our regular daily operations. We have had a couple years with a deficit budget where we've needed to transfer funds from our reserves to cover to cover the budget and looking out into next year's budget.
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Speaker 4
We weren't facing or are facing a deficit of about 17.4 million in the following year, about 31.7 million. So this is something we were watching the legislature very carefully this year to see what would happen. We, along with all other districts in the state and all of us at home are facing high inflation cost. So our inflation here, it the inflation affects Clear Creek ISD significantly in terms of looking at our general insurance policies, our property and casualty insurance, our fuel costs that we need to fuel our busses, paper costs, garbage, health insurance, school security, all of those things have had a significant rise in their prices and that impact on our expenditure line.
00;07;42;29 - 00;08;17;18
Speaker 4
And so it looks from 2019, our CPI Consumer Price Index has increased by 17% and we estimated it would take $1,000 increase in that basic allotment from the state to meet our needs that we've had from inflation. But as we know, the state did not make any increases to that basic allotment. So over the past year, we've looked at we put together a strategic budget sprint team to look at what we can do as a district to generate revenues and also to reduce expenditures.
00;08;17;18 - 00;08;44;25
Speaker 4
And so we have looked at our staffing where 88, 90% excuse me, staffing is in our budget and we have reduced by about 144 positions over the past two years. We've looked at Department budgets and made reductions there over time. We've also done things like eliminating out of state travel and limiting professional memberships, as well as making some energy management modifications.
00;08;44;28 - 00;09;17;01
Speaker 4
Overall, we've saved about $10.2 million on the expenditure side. And one of the things we always like to talk about is the how much we're spending in the classroom. And we're very proud to say that we spend 65% of our budget directly in the classroom on instruction and instructional resources, and that is higher than the state average. It's also higher than the average in region four. On the other hand, we like to look at our administrative costs and make sure that those are staying in line.
00;09;17;04 - 00;09;44;14
Speaker 4
We have very low administrative costs ratios here in Clear Creek ISD. Our general administrative costs are at about 2.1%. The state average is 3.7% and the region average is 3%. So we're proud to say that we keep those administrative costs below what the state average in region average is. And we did talk a little bit about our tax rate over the year for the Region 4 area.
00;09;44;14 - 00;10;17;00
Speaker 4
We have one of the lowest tax rates out there. In fact, CCISD, M & O side of our tax rate is the fourth lowest in the state of Texas. So we have produced a great educational system with very low tax rate. We're very proud of that. But as we move on and talk about a tax rate election, what we are asking our voters to approve or will be asking our voters to approve this November is the addition of three pennies to our tax rate.
00;10;17;01 - 00;10;41;06
Speaker 4
These are considered golden pennies by the state. The reason that they're called golden is because they generate not only local taxes but also matching state funds. And so each penny brings in about $3 million in taxes to the district, and the state almost matches those dollar for dollar with another 3 million. So that's a significant source of revenue for us.
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Speaker 4
And with that approval of that tax rate election, that will help us balance our budget here at Clear Creek ISD for the next year.
00;10;51;15 - 00;10;58;13
Speaker 3
And so in summary, Dr. Engle, what is the plan moving forward?
00;10;58;13 - 00;11;21;11
Speaker 1
The board will consider officially the voter approval tax rate election in August. And then from that time we will go out and seek our taxpayers support. You know, we are really just asking for some help. As Ms. Benzaia said and we've talked about our M&O tax rate is one of the lowest in the state greater Houston area.
00;11;21;11 - 00;11;45;18
Speaker 1
The only M & O tax rate lower than we have is HISD and anywhere around our area. So we need we need our our voters help, but also it's our community and we are looking to our community members, our partners to help ensure that our educational system remains that shining star in the community, in the district. We know how important that is.
00;11;45;24 - 00;12;07;27
Speaker 1
One of our beliefs is that parents, community and the school have a shared responsibility for the education of youth. We talk to people all the time that move to Clear Creek ISD area for the schools, and we're asking our our taxpayers just to help support that, help support everything that we do in Clear Creek ISD. And this
00;12;07;27 - 00;12;28;21
Speaker 3
is the first time that we've gone out to our voters for a tax rate election. We certainly have gone out previously for school bonds, but this is a new process for us and we've been talking to community. We've had five meetings this summer and Ms. Benzaia, because I know that was a question that came up about what's what does this mean for me as an average homeowner?
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Speaker 4
Yes. So one
00;12;29;20 - 00;12;52;28
Speaker 4
of the things that we wanted to show during our community meetings was the tax impact of the tax rate election. So we looked at a home that had a value of $350,000. And we’ve all, many of us have received increases in our property value. So we reflected a 10% growth in this home value, which brought it up to $385,000 next year.
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Speaker 4
There's a couple of things that are going on at the state level. The state provides a $40,000 per year homestead exemption to our homeowners, and they are increasing that to $100,000. So that's a great benefit for taxpayers. In addition to that, with this property value growth, the district is required to reduce our tax rate on the M & O side.
00;13;14;21 - 00;13;23;01
Speaker 4
So we will be reducing that tax rate by $0.18, which is very significant and will produce savings for our taxpayers as well. So
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Speaker 4
Without a tax rate election, a homeowner would be seeing a savings of about $750 per year in this situation. With the passage of a VATRE, the savings would go down to about $670.
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Speaker 4
So really those three pennies generate a cost to the taxpayer of about $80 per year.
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Speaker 3
Thanks you. I will say that we have had really great response from our community. I understand it takes a while to understand the challenge because it's so complex with school funding, because of property values going up so high, although we have no control over that. But the state then requires us to lower that tax rate. So there is this misunderstanding that I'm paying all this in taxes.
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Speaker 3
Why are why aren't you receiving it? And that just is, that’s the Robin Hood system that we're operating under in the state of Texas. And so as long as people stay engaged and informed on this topic, they become more connected to it. And the community members that we've talked to, at least they seem to understand it and want to help.
00;14;31;02 - 00;14;55;22
Speaker 3
And it is important that this tax rate election passes in November, because if not the projection, the budget shortfall for not just this next school year but the following year is pretty significant. And we don't want to have to go through that challenge. And so I think it's landing well in the public and that we're just trying to get our employees up to speed on what's happening since they've hopefully been enjoying a nice summer, a well-deserved summer.
00;14;55;22 - 00;15;19;21
Speaker 1
Well, I was just going to say to you that we have had some very positive feedback. And going back to that budget sprint team that Ms. Benzaia talked about, that was a recommendation out of that team to generate revenue. And as well as they talked about how can we cut expenditures and that was one of the strong recommendations was to generate revenue this way.
00;15;19;24 - 00;15;45;16
Speaker 1
And it is such a when people think about the fact that we're going to get almost matching state funding when the taxpayer, you know, with for each penny that we receive, almost that amount of funding in return from the state stays local local dollars is a great return on investment as from our taxpayers put money out. But then the state definitely provides monies back into our district.
00;15;45;16 - 00;15;58;03
Speaker 1
So that's a real it's been a strong surprise, I think, to a lot of us that it's such a it's such a great way to get money back into the district. And we
00;15;58;03 - 00;16;19;19
Speaker 3
certainly would have liked to have given more in salary increases this year. Again, going back to what you said, the board really felt it was important to do something even though we're in a deficit for this next school year. But some school districts have gone out there and have announced pretty significant salary increases. And so how do we how do we explain that to our employees?
00;16;20;11 - 00;16;51;19
Speaker 4
You're correct. Districts across the area have, in fact, provided raises and some have not. And many, if not most of our area districts have provided increases, have also adopted deficit budgets, and they needed to do that to be able to provide those increases. So really, every district is unique when it comes to school finances. For example, some districts have maximize their taxing capacity, so they are using all of their available pennies that they can to raise tax revenue.
00;16;51;21 - 00;17;15;18
Speaker 4
And there's an area district that's one example that has all 17 pennies on their tax rate that they're allowed to have. Here in Clear Creek, we've been using just four pennies on our tax rate to maximize dollars. So that presents a challenge. And some districts have high at risk students and have generated a lot more in federal funding from the pandemic than other districts.
00;17;15;21 - 00;17;45;16
Speaker 4
And many of those funds were used to fund salaries. And finally, just a drop in enrollment growth has created a different financial picture for Clear Creek ISD versus area growing districts. And as we've been explained in our presentations, we're funded based on the number of students in attendance and that also that set rate by the state. So it's extremely challenging and it requires us to find other areas for expenditure reductions or new revenue sources.
00;17;45;18 - 00;18;24;28
Speaker 4
So I met last week with area CFOs and we're all unique in our factors that I mentioned but we're all facing the same financial impact from the state, from that lack of an increase in that basic allotment at the state level. And we value our employees and our budget. Our Board of Trustees has a budget goal to provide competitive salaries here in Clear Creek ISD and we're working diligently on a plan over the next year to balance our budget and also remain competitive with our salaries and the passage of this tax rate election is just an integral piece of that plan.
00;18;25;01 - 00;18;32;05
Speaker 3
Dr. Engle, as Ms. BenzaiaI said, we are certainly not alone in this situation. What are you hearing from other leaders as to what may or may not happen
00;18;32;05 - 00;19;00;11
Speaker 1
at the state level? Right now, we continue to talk to not only local districts and superintendents, but also our state legislators. And we do hear that there will be possibly a special session on education later on in the fall. And so we look forward to that and potentially some support, not next year, but the year after, but the basic allotment increase to cover those inflation costs that we had originally anticipated.
00;19;00;11 - 00;19;20;14
Speaker 1
I'm not foreseeing that that's going to happen, but that's okay. We can go out and we have some definitely we have not used our taxable resources and we know that. So as we go back out to the taxpayers and ask them to kind of help contribute like most of the other districts are in our area, and we're also being creative.
00;19;20;14 - 00;19;31;13
Speaker 3
and have increased revenues too. And so we did talk about the policy change that was passed in June, June, I believe. Yes, on open
00;19;31;13 - 00;20;07;17
Speaker 1
Enrollment. Yes. We're very excited to announce that a grandparent living in our district, in our taxable district with grandchildren can bring their grandchildren to Clear Creek, ISD. Whether those grandchildren live in the district or not. So as our community ages up a little bit, we continue to pay taxes. And this is a wonderful way to kind of, you know, really allow that multigenerational community that we have that we do have in this Clear Creek ISD.
00;20;07;17 - 00;20;29;09
Speaker 1
So if you are a grandparent now, we're kind of staffed, we're pretty full right now, but we will make plans and begin opening that up fully next year in early spring. If you're a grandparent, you want your grandchildren to come to Clear Creek ISD, and that information will be out before you know it. And we welcome them and also.
00;20;29;09 - 00;20;35;23
Speaker 3
employees who are grandparents can also participate in that limited open enrollment.
00;20;35;23 - 00;21;02;09
Speaker 1
Yes, they can. And even an employee who retires, their grandchildren can stay. So we are just really embracing our community. And we know that we've had some employees that said, I'm afraid to retire because my grand I don't my grandchildren don't live in the district. And the policy changes have made that possible, thanks to the board. And we’re expanding tuition based pre-K?
00;21;02;11 - 00;21;04;16
Speaker 1
Yes. We have two classes opening
00;21;04;16 - 00;21;13;07
Speaker 3
this fall that we're planning to. The goal is to increase enrollment by 300 for the 2425
00;21;13;07 - 00;21;36;22
Speaker 1
Yes. And we have kind of a long range plan we call Vision 2030 and that long range plan. We would like to open have every family in Clear Creek ISD that would like to bring their children to pre-K. Some qualify for that service and they at no charge but have a tuition based pre-K for every family in Clear Creek ISD.
00;21;36;24 - 00;21;48;03
Speaker 1
So you have the chance to bring your children to Clear Creek ISD teachers and schools that we're working towards that also expanding opportunities. So the board
00;21;48;03 - 00;22;05;26
Speaker 3
will take a vote on August 21st to call for a tax rate election, which will move us out of the deficit spending for this budget year. We do encourage every employee who resides in our district to register to vote for the November election, and we'll certainly have a lot more information out after the board meeting this month.
00;22;05;28 - 00;22;07;26
Speaker 3
Dr. Engle is there anything else you'd like to say before we close out?
00;22;07;26 - 00;22;32;24
Speaker 1
Well, we're just grateful for all of the participation. I'm so grateful for the community budget sprint team for our employees, for everybody that has really worked so hard to maintain a focus on children as we get ready to open school. We are so excited and there are some budget things going on. But we, as we like to say, we keep the main thing, the main thing, and that is our children.
00;22;32;24 - 00;22;47;06
Speaker 1
And to ensure that each child, each child achieves, contributes and leads with integrity. That is our goal and we are grateful for our employees that are returning and are going to ensure that that happens. So just thankful for everybody.
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Speaker 3
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00;22;50;19 - 00;22;51;25
Speaker 1
Thank you. And thank you both for being with us today.
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Speaker 1
Have a great year.
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Speaker 2
Thank you.
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Speaker 3
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