SISD anticipates $41 million deficit, no pay raises next school year
by Claudia Lorena Silva, El Paso Matters
May 14, 2024
The Socorro Independent School District is anticipating a $41 million deficit during the 2024-25 school year and is looking to cut costs by lowering its contributions to employee health care, reducing overtime, forgoing pay raises and closing its aquatic center.
While the district isn’t planning any layoffs, Socorro ISD’s Acting Superintendent James Vasquez told El Paso Matters it has paused hiring staff to fill vacancies.
Vasquez said he knows asking employees to pay more toward their health insurance is a “sensitive area.”
“By law, we have to contribute $225 per employee per month. Currently, we are contributing $575 per employee per month, so we're looking at that closely,” he said. “Obviously, this is an extremely sensitive area. So many of our employees and their families have health issues and they rely on (health insurance). So we understand the constraints that may put on our employees.”
The Socorro ISD school board is expected to approve its employee compensation plan in May and its budget for the 2024-25 school year sometime in June.
Most public school districts set their budgets in the summer before the beginning of the fiscal year, which can start on July 1 or Sept. 1. The majority of El Paso school districts have a fiscal year that runs from July 1 to June 30 of the following year.
SISD trustees during their board meeting on Wednesday are expected to discuss teacher and administration contracts for the upcoming school year as part of their budget workshops. The meeting is at 6 p.m. in the District Service Center Board Room, 12440 Rojas Dr.
The budget talks come as the district has been embroiled in controversy, including being placed under conservatorship by the Texas Education Agency and two of its trustees having been arrested on charges related to their official duties. District officials said neither should impact the budget adoption process, and that the two trustees arrested and indicted – Pablo Barrera and Ricardo “Richard’ Castellano – can remain on the board as voting members.
Penny swap, tax increase not off the table
The district’s former superintendent, Nate Carman, who was placed on paid leave through June, suggested during a February board meeting that the district could get up to $50 million in additional revenue with a penny swap election. This would allow the district to move pennies from the interest and sinking tax rate — which is used to pay off debts — into the maintenance and operations tax rate.
Vasquez said the district is not currently looking to increase taxes or hold a penny swap election, but noted the school board may consider it in the future.
“First and foremost, we have to look internally just to ensure that we're being responsible with our cuts across the district, and make sure we’re spending responsibly,” he said.
“But I think at some point because of lack of funding from the state, it might be necessary to look at other areas of revenue, such as a penny swap to support the district,” Vasquez continued. “But any sort of tax increase or penny swap would require board approval. So at this point, I don't think I would take anything off the table.”
SISD enrollment decline, transfers impact budget
These developments come as the district continues to deal with a $33 million deficit for the 2023-24 school year and declining enrollment.
SISD’s enrollment had mostly grown over the last 10 years, but recently started seeing declines.
The district enrolled 44,517 students during the 2013-14 school year, according to data published by the Texas Education Agency. That number gradually grew to 47,575 by the 2019-2020 school year and dipped slightly to 47,061 the following year before it inched up again.
The district celebrated its peak enrollment in January 2023 at 48,000 students. TEA data shows the district reported enrolling 47,843 students during the 2022-23 school year.
The district has about 47,300 students enrolled this school year, TEA data shows.
Socorro ISD has also seen an increase in students transferring out of the district mid-school year.
During the 2018-19 school year, 6,254 students transferred out of Socorro ISD. That number rose to 8,603 in the 2022-23 school year, then dropped slightly to 8,143 in 2023-24.
SISD is projecting enrollment to drop to 46,975 during the 2024-25 school year, the district’s Chief Financial Officer Vicki Perez said during a board meeting on May 5.
SISD projected budget, deficit for 2024-25 school year
Perez said Socorro ISD projects $462.6 million in revenue next school year, with $503.6 million in expenses. The majority of expenses – $431.6 million – is earmarked for employee pay, with about $26.8 million slated for contracted services.
Trustees during the May 5 meeting discussed ways to save the district money, including:
- Reducing employer health care contributions
- Reducing the substitute teacher budget
- Reducing mileage stipends
- Reducing overtime
- Cutting non-student travel
- Cutting new land and vehicle expenses
- Suspending operation of the SISD Aquatics Center
- Reducing days on employee’s schedules
If the district goes ahead with all these recommendations, Perez said it could lower next year's deficit to $11.5 million.
Though Socorro ISD will look at various ways to reduce expenses, Vasquez told El Paso Matters the cuts won’t affect safety or the quality of education students receive.
“We want to hold those sacred. We also want to ensure that instructional programs remain intact. So we're looking at cuts at the highest levels administratively, looking at employee travel, looking at hospitality, non-school furniture, those types of things that don’t impact student instruction,” Vasquez said.
The acting superintendent said the district has already made cuts to its travel expenses that would reduce the current school year's $33 million deficit by about $1 million, but won’t know the final figure until after the fiscal year ends in June.
SISD will likely have to use its reserves to cover the cost of the deficit. That stood at about $72.9 million at the end of the 2022-23 school year, the district’s annual financial report shows. That is only enough cash on hand to keep the district running for 55 days, district staff said during a January board meeting.
The state does not have requirements on how much school districts should have in their unassigned fund balance, but they need to have enough to keep running for at least 75 days to get an A in the Financial Integrity Rating System of Texas.
Vasquez said he does not know what the district’s fund balance will look like at the end of this school year or how many days it will have to keep the district running. He said that information should be released over the summer.
This article first appeared on El Paso Matters and is republished here under a Creative Commons license.