The Liberty Hill Independent School District (LHISD) Board of Trustees received a financial efficiency audit review from Moak Casey at the Sept. 16, 2024 board meeting. The independent efficiency auditor found that LHISD is facing financial challenges that will impact the current education and extracurricular programming provided to students.
House Bill 3 (86th Legislative Session) generally requires school districts' board of trustees to conduct an efficiency audit before conducting a Voter Approval Tax-Rate Election such as the School Funding Election that LHISD trustees have called for this November. The Legislative Budget Board has released guidelines that govern what must be included in a district’s efficiency audit. As the district prepares for the upcoming school funding election, the independent efficiency audit report shows the underlying reasons why the district needs additional revenue. This article breaks down the key factors driving the district’s current financial strain and why the board of trustees selected to go out for an election in November 2024.
Tax Rate Comparison
Through elections, many nearby districts have increased their rates, resulting in higher local revenues that directly support school operations. These districts have passed elections, allowing them to add "pennies" to their tax rate, providing them with financial flexibility. LHISD has not yet raised local tax rates through elections, so these peer districts receive more funding per student than we do.
Revenue Shortfall
When property value increases, the state’s proportional contribution decreases. Because there is a gap between the property tax rate and the state's contributions, the district realized a $2 million deficit this school year. The efficiency audit report showed that LHISD receives significantly less funding per student compared to peer districts. Districts with larger populations in categories like special education (SPED), bilingual, career and technology, and economically disadvantaged students receive additional state funding, which LHISD lacks in proportion. As a result, our revenue per student falls below both peer districts and the state average, creating a financial strain as we work to meet the diverse needs of our students.
Operating Expenditures
Despite the revenue challenges, the audit shows that LHISD operates with financial efficiency as the district’s operating expenditures are lower than those of peer districts and the state average. The largest portion of these expenditures goes toward instruction, maintenance and operations, school counselors, mental health services, and specialized staff such as special education diagnosticians and speech-language pathologists. “We choose to make sure our kids are mentally healthy,” said LHISD Board Vice President Kathy Major. “Because if they aren’t mentally healthy, then they can’t learn what’s before them.”
While we have been able to stretch our resources; however, the district’s ability to maintain this efficiency is not viable.
Teacher and Administrative Salaries
A critical area affected by this revenue shortfall is staff compensation. The audit report showed that the average 
teacher base salary at LHISD is below that of peer districts and the state average, making it difficult to retain and attract qualified educators. This discrepancy extends to administrative salaries, which are also lower compared to peer districts. Despite our efforts to be resource-efficient, the disparity in salaries is unsustainable as we compete with higher-paying districts for top talent. “Every cut we make is more work on our teachers,” said Superintendent Steve Snell. “We already pay our staff less than school districts our size in Texas, to make any additional cuts would mean more work on our teachers that are under the strain of state mandates and deserve more money, while handling the challenges of today's classroom.”
Unsustainable Fund Balance
The efficiency audit demonstrated that while the district once maintained enough funds to cover three months of operating expenses, rising costs due to growth and inflation have outpaced revenue, eroding the district’s financial savings. Though the district’s student population continues to grow, bringing in additional state funding, the increase in revenue does not match the rising costs of educating more students. Compounding this issue, as property values rise, the state contributes a smaller share of funding, placing a proportionally larger burden on local taxpayers and the district. “Whether you have kids in public school or not, it’s a privilege that the local government can step in and choose to help students in our district when we don’t have enough money coming in from the state right now,” said LHISD Board President Megan Parsons.
A Breaking Point
LHISD is doing everything possible to make the most of its resources, including seeking additional grants and funding to support the needs of its students. However, the district is at a breaking point, where “doing more with less” is no longer a sustainable option. Without the passage of the upcoming school funding election, LHISD faces the possibility of severe budget cuts, diminishing the current educational programs and extracurricular opportunities offered to students.
To learn more about the school funding election, visit www.LHvotes.com.
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