Editor’s Note: This article was originally published in the Oct. 3, 2025, print edition of The Liberty Hill Independent.
During the September LHISD Board of Trustees meeting, Chief Financial Officer Rosanna Guerrero was joined by Leo Lopez, Chief Financial Officer of MoakCasey, as they presented the results of a mandatory efficiency audit to the board.
As mandated by House Bill 3 in 2019, any school district that seeks voter approval on a maintenance and operations tax rate increase must complete an efficiency audit before such a proposal can be placed on the ballot. The board voted in August to move forward with an increase to the M&O tax rate, and they hired MoakCasey to conduct the necessary audit.
MoakCasey is a finance, education and economic development consulting firm that offers school finance services, among other things.
Lopez outlined the proposed increase in the M&O tax rate from 64 cents per $100 of home valuation to just under 74 cents per $100. This increase is expected to generate $10.7 million in revenue for the district, which would be used to reduce class sizes, bolster safety and security measures, and fuel efforts to recruit and retain staff.
In August, the district presented a different number: $10.9 million in revenue.
This discrepancy is largely due to a difference in the estimated maximum compressed tax rate, also known as the MCR, which is calculated by the TEA. The deadline for the TEA to have the final determination of the MCR was Aug. 31, while the deadline for the board to approve a new tax rate was Aug. 18.
Consequently, the board had to approve the total tax rate of $1.24 per $100 of home valuation before having the final calculation of the MCR portion of that rate.
“We were planning on that rate to be 57 cents from the state, based on all the data that we had,” said Interim Superintendent Travis Motal. “Well, since the end of August, the state came out and said the tax rate is going to be 59 cents.”
Because the board had already adopted a rate of $1.24, two cents had to be removed from the voter-approved portion of the proposed rate in order to account for the two-cent increase of the MCR portion. The difference in “value” between the two pennies and their eligibility for state recapture leads to both a drop in expected revenue and a drop in necessary state recapture payments: $10.9 million to $10.7 million and $1.5 million to $998,000, respectively.
One way to get a good grasp on how effectively a district is managing its finances is to compare it to similar districts.
“Peer districts are selected for a number of reasons,” Lopez said. “We look for districts that closely represent your school district. We look at a few that are nearby, but we also look at other districts that meet very similar criteria to you in terms of enrollment, five-year growth and total tax rate.”
Compared to all six of the listed peer districts, including Georgetown, Dripping Springs and Hutto, Lopez said the 2024-2025 M&O tax rate held by LHISD is the lowest, even sitting over six cents under the state average.
“In terms of the tax burden you have been levying on your taxpayers, you’ve been pretty conservative in that regard,” he said.
Other sources of funding for the district, specifically federal revenue streams and miscellaneous local revenue streams, are also shown to be generating less than peer districts, and considerably less than the state average.
“If you look at what all of our funding [amounts to], it comes out to $9,368 [per student],” said Trustee Kendall Carter following the conclusion of Lopez’s presentation. “Comparatively, we’re about $400 short of peer districts, and we’re $1,300 short of the state average.”
Making sure the district is utilizing funds to effectively meet the needs of its students plays a major role in determining its financial efficiency, and as such, academic accountability ratings are taken into account during the audit process.
“Your district received a B in the comparison school year, which is right in line in terms of the numerical score. You’re on the upper end of your peer districts,” said Lopez.
Operating expenditures are perhaps the most important piece of the puzzle. How does the district utilize the funds it has? LHISD expends $9,836 per student in total operating expenditures, a touch lower than the peer district average of $9,851 per student, but marginally lower than the state average of $10,765 per student.
Slicing that even further, the audit also shows that LHISD has a lower average teacher salary and a lower average administrative base salary than peer districts – about $2,000 and $3,000 lower, respectively.
When compared to state averages, there is an even larger difference: about $5,500 for the average teacher base salary and $4,500 for the average administrative base salary. Despite these gaps, the district’s payroll accounts for 86 percent of its operating expenditures – 8 percent higher than its peer average, and 3 percent higher than the state average.
Lopez pointed out the difference between where the district allocates its staff compared to its peers.
“One of the things I wanted to call out is that your teaching staff and your paraprofessional staff percentages are both higher than the peer district average,” he said. “Your administrative staff ratio is lower than the peer district average. Relatively speaking, you’re putting more of your payroll into the classroom.”