Chief Financial Officer Chris Scott presented the strategies to the board of trustees during its Oct. 21 meeting.
Some context
EISD adopted its 2025-26 budget in June with a $7.1 million shortfall, which was lowered to $3.7 million in September due to additional state funding from the 89th Texas Legislature.
EISD's revenue sources include the Foundation School Program, or FSP, allotment, which include property taxes and state aid. Other revenue sources include investments and School Health and Related Services, or SHARS, funding.
However, EISD's expenditures—which includes payroll, the district's biggest expense—are outpacing its revenues.
Various revenues have decreased over the years, such as SHARS funding, which dropped from $730,624 in 2020-21 to $75,000 in 2025-26. While nonpayroll expenditures have remained relatively flat, payroll expenses have increased due to inflation, Scott said.
"We like to give our staff raises as much as we can afford to give," Scott said. "We've not completely matched inflation, but we've done our best. ... Unfortunately, if you're looking to find money and you need to cut expenses, [payroll is] where you find the money."
The options
Scott said the district can expect state funding to decline along with enrollment over the next four to six years, and that an annual salary increase of 2% will cost approximately $1.6 million.
In order to find $5 million-$6 million to balance the 2026-27 budget, additional measures need to be taken in order to rebuild EISD's fund balance which is projected to be at its minimum 25% threshold at the end of this fiscal year, Scott said.
"It's not just, 'Find $5 million, get a balanced budget, and then we're good,'" Scott said. "You need to start thinking about the year after that. Once we get the balance, if we have less money to work with and higher expenses, we've got to look at that each year."
Five options, which could net over $7 million in savings, include:
- Voter-approval tax rate election, or VATRE: If called by the board, this election would be held in November 2026 and increase the maintenance and operations tax rate above the voter-approved rate. This would allow EISD to adopt up to nine copper pennies, a mechanism that garners additional state funding through the increased tax rate. However, EISD would retain only $3.8 million of the $20 million received, as $16.2 million would be sent back to the state as a recapture payment.
- Other revenue increases: EISD could increase revenues by up to $600,000 by increasing its facility rental rates, which already went up 25% last year; creating online courses; and adding more transfer students.
- Staffing optimization: Adjusting staffing formulas and structures across campuses and central administration could net $3.3 million. "Not to sugarcoat it, this is making class sizes bigger, this is ... having fewer people doing the same amount of work," Scott said.
- Reduce or eliminate district programs and services: These would be evaluated to determine which ones can be reduced or fully eliminated while minimizing disruptions and student outcomes. Estimated cost savings vary. "We don't have any programs like Spanish Immersion, which you looked at last year, that would allow us to create a huge efficiency," Scott said. "A lot of them are not going to grab a lot, so you'd have to look at a lot of different things."
- Salary freeze: Pausing part or all salary increases for one budget cycle could save $1.6 million if the 2% increase is not given.
Trustee Laura Clark said that while adopting copper pennies is "bad business" for the district, it should be considered.
"I'm not a fan of copper pennies," Clark said. "I really struggle with that. It's bad business to be bringing in $20 million from our community and keeping less than $4 million. This is the first time [Scott] got a head tilt from me. ... It is the only thing that we are talking about tonight that does not impact our kids."
Next steps
Scott is expected to provide another update at November and December board meetings in order for the board to commit to a budget plan in January.
Per agenda documents, administration will also gather community feedback through in-person forums and ThoughtExchange surveys starting Oct. 29.
