Budget 101

Budget Basics

School districts operate on limited revenue sources:
  • federal funding
  • state funding (target revenue, hold harmless-ASATR)
  • local revenue (gate receipts, marketing, interest, donations)

School budgets are divided into two separate funds:

  1. Maintenance & Operations M&O (supplies, salaries, utilities, etc.)
  2. Interest & Sinking I&S (bonded indebtedness)

Personnel Costs

About 85% of Carroll ISD's $121 million M&O budget is personnel-related costs.

The I&S budget may not be used for operational costs. One common misconception is that you can use debt service (bond) money to pay for salaries and decrease class sizes. This is not legal.

Student Enrollment

Student enrollment plays a significant role in formation of the public school budget. Districts have a per pupil expenditure to consider, and student funding is directly related to the number of students in the district. There are several terms which are used to describe student population.

  • “ADA” is Average Daily Attendance.
  • “Refined ADA” is the Average Daily Attendance adjusted for special schedules and other minor refinements
  • “WADA” is the weighted average daily attendance figure used in several state funding formulas to calculate the amount of state and local funds a district is entitled to receive.

Local Revenue

Local funds consist primarily of property taxes collected from the community. Property taxes are levied based on rates set annually by the Carroll Board of Trustees. Other sources of local revenue include admission to sporting events, rental fees, activity fees, marketing revenue, etc.

Federal Revenue

Federal revenues are based on specific programs set up by the federal government and administered through the Texas Education Agency. These funds are generally earmarked for special needs or economically disadvantaged children. Carroll ISD receives limited federal funding. This source of revenue represents 2% of the CISD budget.

State Revenue

These funds are provided by the State of Texas for education. State revenue consists of foundation grant money, as well as several special allocations. For Carroll ISD, these funds have historically represented less than 10% of the total operating revenue.

Beginning in 2002 Carroll ISD became a Chapter 41 (wealthy) school district. In the state of Texas, wealthy school districts are required to send a portion of locally generated funds from the district to other less wealthy districts in the State of Texas.

At this time the payment Carroll ISD makes to the State for “Robin Hood” is much greater than the funds received from the state. The computation of this amount is critical to future funding.

Fund Balance

Districts maintain a Fund Balance account - a sort of reserve fund. Most districts, however, do not maintain a large enough balance to meet all facility needs so they have to have a bond election to get permission for a "loan."

District policy requires CISD to maintain at least a 45-day operating reserve (approximately $15.1 million). The Texas Education Agency recommends an Optimum Fund Balance, which is calculated based on district cash flow needs and expenditures levels (approximately $38.4 million for CISD).

Carroll ISD currently has a fund balance of $39.2 million. About $9 million came from a 2008 oil/gas lease that is no longer in place, and the 2006 sale of property on Peytonville Avenue.

About $10.6 million of the $39.2 million Fund Balance amount has been committed specifically to account for funding shortfalls in this current biennium.