The Midway Independent School District expects to receive an additional $3.6 million in revenue under the recently passed state school finance reform law, with at least $1 million of that going toward salary raises.

The Midway ISD Board of Trustees held a budget workshop Tuesday night to discuss how the newly passed House Bill 3 may impact the district’s budget for the next couple of years.

House Bill 3 devotes $11.6 billion to school finance reform, with about $6.5 billion in new public education spending and about $5.1 billion dedicated to lowering residents’ property tax bills, the Texas Tribune reported.

The measure includes money for teacher raises and funding for free full-day pre-K for eligible 4-year-olds. It also decreases the amount of money wealthy districts must spend to subsidize poor districts through the state’s recapture program, known as “Robin Hood,” according to the Texas Tribune.

Assistant Superintendent of Finance Wesley Brooks, who called House Bill 3’s investment in education “unprecedented,” presented estimates of how the new legislation will alter the district’s budget. He said he hopes to have more information for the board when it meets again July 16.

Under House Bill 3, state funding per student will increase by about 20%, Brooks said. He estimated Midway’s per-student allotment increasing to $8,317, including local contributions. That is up from this year’s per-student allotment of $7,867.

Out of that $1 million intended for staff raises, about $813,693 would go toward salary increases for teachers, nurses, counselors and librarians, Brooks said. House Bill 3 requires that at least 30% of the additional money districts receive goes toward raises for full-time, non-administrative staff, and that 75% of the additional money goes to raises for teachers, nurses, counselors and librarians.

Brooks said this school year’s budget was about $88.4 million, and next year’s is estimated to be roughly $88.6 million. The largest addition to the budget is an extra 51 positions, costing $2.7 million.

The 2019-20 budget estimate also includes 2% raises, costing $920,770, Brooks said, although the district may have to increase that percentage to comply with the new law.

Brooks said funding will be more equal between state and local sources for the next two years, with 55% of Midway’s funding coming from local taxes and 45% coming from the state.

School board President Pete Rusek said the property tax revenue caps put in place by House Bill 3 for school districts will ensure the state’s share of funding remains the same, which presents challenges for school districts.

“It’s even more likely that if we have a dip in the economy with no new funding source, the state’s going to be hard-pressed to make this thing work,” Rusek said of House Bill 3. “They’re going to have to do something to sustain it. We’ll see.”

Midway will see less local tax revenue this year than last year because House Bill 3 requires districts to compress their tax rates so they do not increase property tax revenue by more than 2.5%, Brooks said. The district’s tax rate will decrease by 7 cents, to $1.25 per $100 valuation.

Superintendent George Kazanas said the new law will save the average Midway homeowner roughly $160 a year. The average Midway home is valued at $225,000, he said.

Brooke Crum joined the Tribune-Herald as the education reporter in January 2019. She has worked for the Springfield News-Leader in Missouri, Abilene Reporter-News, Beaumont Enterprise and the Port Arthur News. Crum graduated from TCU in Fort Worth.

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