The $14 million shortfall is up over $7 million from the $6.29 million deficit adopted at the beginning of fiscal year 2024-25.
Staff may also have to pay an additional amount for insurance, which was previously at no-cost to employees.
What’s happening
District officials amended the HCISD budget during a June 10 meeting to include an additional $7.8 million in expenses.
Part of the additional costs came from a change in payroll platforms, from Munis to Frontline. The district also added 32 teachers, primarily at Cullen and Negley elementaries. District officials initially anticipated transitioning Negley teachers to Cullen, but Negley had 150 students more than projected, resulting in the need to hire more teachers for both campuses.
The additional teachers not being included in the payroll budget totals during the software transitions created shortfalls in the payroll budget.
Additional expenses also included extra pay for overtime and non-standard hourly employees, increases in substitute teachers to help with special education staffing, and the district’s Grow Your Own program for special education teachers.
With the $7.8 million in added costs, the deficit rose to roughly $13.79 million.
The district will need to find an additional $294,284 in cuts to fund a total $1.39 million compensation plan that impacts staff across the district, said Christina Courson, HCISD chief human resources officer.
House Bill 2, signed into law June 4, will provide permanent raises for educators and support staff at varying levels based on the number of students in the district and teacher experience. At HCISD, teachers with three and four years of experience will receive a $2,500 salary increase, and teachers with five or more years will receive a $5,000 increase. The bill does not include staff with less years of experience or administrative positions.
HCISD also received an additional $1.03 million in funding, which the district will use for the remaining 1,711 staff who are not part of HB 2.
The board of trustees discussed how to distribute the pay increases, either through a fixed amount or a 1% increase, but trustees are leaning toward a fixed salary increase of $483.92 for remaining staff, as discussed during the June 10 meeting.
The increase is not yet finalized and has not been voted on by the board. The numbers could also change based on new information from the Texas Education Agency.
With the $13.79 million shortfall—and potential cuts of $294,284 needed to adjust for the teacher compensation plan—that brings the total projected deficit to $14.08 million.
What else
HCISD currently uses the Teacher Retirement System ActiveCare plans for insurance, which increased rates for the 2025-26 school year. New rates will increase from $445 to $484 per month, or a $39 increase.
HCISD currently pays the full $445 per month per employee, at no cost to the employee. If the district continues to pay the full amount for next year, the district would need to make over $1.2 million in additional cuts, on top of the over $7 million needed to balance the budget, Courson said.
In order to avoid an extra $1.2 million in cuts, Courson suggested the district maintain their current contribution of $445 per month per employee, and the employee would cover the remaining $39. This action is not yet finalized and will be discussed when the board adopts the fiscal year 2025-26 budget later this month.
The plan
To combat the looming deficit, Wright said the district will no longer budget for overtime, extra duty pay and non-standard hourly pay at the district level.
If a department has people work overtime or to hire non-standard hourly employees, then it would come out of the department budget. However, HCISD officials have built in the budget template to add $2 million for departments and campuses to help with inflation.
Additionally, the district will no longer offer professional development on school days. Wright said there are currently $10 million in vacancies across the district, both at the campus and department level. District staff will work to cut about $1.5 million through attrition.
To adjust for district growth and additional teachers needed for larger elementary classes, the district is looking at increasing class sizes from a 23-to-1 student-teacher ratio, to 24- or 25-to-1 on a voluntary basis, Courson said at a June 4 budget workshop.
Teachers would receive an additional $3,000 per student if they volunteered to have a bigger class.
Courson said each additional teacher hired would cost $75,000 if the district split classes for smaller sizes.
The board has not yet voted to increase class sizes and a decision to increase the size is not yet final.
Looking ahead
The HCISD board will continue to work on the budget throughout June. The board must adopt the district's budget by July 1.
District staff said the adopted budget will be balanced through cuts and new revenues from additional students to make up the $14 million shortfall.
The next board meeting will be at 5:30 p.m., June 24, in the Hays CISD Keller Board Room, 21003 I-35, Kyle.
