What you need to know
Administrators say the district is planning a budget for the 2025-26 fiscal year along the lines of the 2024-25 fiscal year. This comes as the 89th Texas Legislature is set to come to a close in June, and the district nears its July 1 deadline to set a budget.
HISD Chief Financial Officer Caleb Steed told administrators that his staff is preparing the following budget scenario, as legislators work out a restructuring of how public schools are financed:
Maintenance and operations budget:
- Expenses: $129.36 million
- Revenue: $125.83 million
- Shortfall: $3.5 million
- Expenses: $45.6 million
- Revenue: $46.6 million
- Surplus: about $1 million
- Expenses: $6.29 million
- Revenue: $6.29 million
- Balanced budget
This is the same tax rate passed in the 2024-25 financial year, Steed said, and will likely be lowered at final approval.
The details
Steed said the figures presented May 8 did not represent what could change if new legislation was approved, and the district has not yet factored the additional cost of general pay increases for employees.
Each 1% pay increase could add about $1 million more to the $3.5 million shortfall already included in the budget projection for the 2025-26 financial year.
Employees paid on a step scale would still receive increases if they are due for one, Steed said.
He said this is also the last year that the district would be able to pass a budget with a shortfall of that size before HISD must add funds to its general fund balance. This is because Texas school districts are required to keep 90 days of operating expenses in the form of cash on hand, he said.
What they're saying
Steed said there are several cost pressures impacting the 2025-26 budget, including increased staffing needs to open Lee Martinez Elementary School, increases in the cost of employee benefits, utilities, insurance and many contracted services.
"Our goal this year was to maintain that same deficit, if not reduce it," Steed said. "But because of opening of the school and all those things, I feel pretty happy with the result that we're at sitting at this point."
What's next?
The district will hold a public hearing on its budget and tax rate at a June 26 board meeting, after trustees voted May 21 to set the hearing date.
