ARLINGTON -- During the past three months of intense budget cutting at the school district, the prospect of a tax increase rarely reared its head.
Now, a residents committee has put it squarely on the table, recommending that the district ask voters to approve a 5-cent increase in the property tax rate in what is called a TRE or tax-rollback election. The increase would generate $15 million to shore up district finances.
"The consensus was that we may be cutting bone at this point if we continue to make cuts in the classroom," said Charles Brady, chairman of the district-appointed Financial Futures Committee.
The committee proposal comes amid uncertainty over state school funding levels, although the Legislature came out with some potential good news for budget makers late Thursday, about the time the committee was outlining a raft of budget recommendations to the school board.
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House leaders announced that they would accept the Senate proposal to reduce state public school funding by just $4 billion over the next two year, about half the amount the House initially supported in April.
That could relieve the need for a tax-rate election in Arlington, Trustee Aaron Reich said.
"If the budget comes back more favorable -- we get less cuts from the state -- we would be hard-pressed to come to the voters with a TRE," Reich said. He said he could support calling a tax election "only after we realize every bit of efficiency we can without a detriment to our students."
But Trustee Wayne Ogle, who did not seek re-election and attended his last meeting as a board member Thursday, said he favors calling a tax election just to give input to the public.
"It's really about a school board asking the public what funding level they want," Ogle said after the meeting. "I think they should have the election to give the citizens that opportunity."
The Financial Futures Committee voted 11-5 to recommend that the board call a tax election. Brady called it an efficient increase because the $15 million generated would be half of the amount generated by raising the rate by the maximum of 13 cents. That's because the first three cents of an increase triggers additional state funding.
"Those are called 'superpennies,'" he said.
That 5-cent increase in the operations portion of the property tax rate, if approved in an election, would raise the overall rate to $1.40 per $100 of property value.
While waiting anxiously on the final state budget, the district has gone about slashing its preliminary general-fund budget for 2011-12, based on a projected $27.6 million shortfall in state funding. The district has cut 631 jobs and $24 million.
The district originally faced a $13.3 million deficit projected in the current-year budget.
But that has been whittled down to $3.5 million in recent months, thanks mostly to additional state funding because of higher enrollment and attendance, and to a $1 million settlement payment from Medicaid for previous-year claims.
"It was something we had not expected to get," Associate Superintendent Cindy Powell, the district's finance chief, said Friday.
The 2011-12 budget will also get a one-time benefit from an accounting change allowed by the state. The district is moving the start of its fiscal year from Sept. 1 to July 1, which will shorten next year to 10 months.
For that year only, the district will receive 12 months of local and state funding to pay for just 10 months of expenses, and reap the difference of about $30 million.
On paper, the gain will swing the budget from a deficit to a estimated $17 million surplus, which will be added to the district's reserve at year's end.
But, as Powell repeatedly emphasizes, the gain does nothing to change the district's revenue trends and spending habits. The budget-balancing act returns to a 12-month schedule in 2012-13 and every year after.
Operating shortfalls make a hasty return, she said.
"The four-year projections that I've been working off of show us with an $8.7 million deficit in the 2012-13 year," Powell said. "You go right back to having the same operating costs and revenue streams."
At Thursday's meeting, the board postponed action on how to use $10.3 million in federal education-jobs funds until the district knows how much state funding it will receive.
"There are too many unknowns out there," McCullough said.
He also questioned the Legislature's prioritizing of issues, noting, "They gave us permission to use a helicopter to shoot feral hogs."
At a special meeting Monday, Superintendent Jerry McCullough's recommendation to use the federal money to save 291 jobs -- nearly half of the 631 jobs targeted for elimination in budget cutting for next year -- met resistance.
Some board members were interested in Trustee John Hibbs' proposed use of a provision in the federal funding, which would allow the board to divert some of the money to reduce the district's projected deficit.
Hibbs said it is more important to shore up the budget for long-term stability than to provide one-year jobs for people who might face layoffs again next year.
Robert Cadwallader, 817-390-7641