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Despite declining revenue, Frisco ISD officials are projecting a balanced budget next fiscal year that could include a 2% raise for teachers and staff.
District officials and the board of trustees reviewed preliminary budget projections during a May 7 meeting.
The overview
FISD anticipates about $752 million in operating revenue for fiscal year 2026-27, down from roughly $771.7 million in the current fiscal year, according to district projections.
Kimberly Smith, FISD’s chief finance and strategy officer, said general fund revenue has decreased largely due to declining student enrollment.
“Enrollment for [2025]-26 declined by more than we expected,” Smith said. “We expect further decline in [2026]-27.”
However, Smith said the district’s Access Frisco program has helped offset some revenue losses. The program allows kindergarten through seventh grade students to transfer to FISD from other school districts.
Smith said the program has enrolled 870 students, generating about $8.4 million in revenue.
What happened
Smith presented trustees with three payroll formula options tied to raises and funding for vacant positions.
The payroll formula includes funding for currently filled positions, turnover savings, potential raises and vacant positions. Historically, the district has fully funded vacant positions because they could be filled throughout the school year, Smith said.
Options for funding the $11.23 million compensation plan included:
Smith said teacher raises would either meet or exceed the district’s new hire pay scale, as starting teacher pay is expected to begin at $64,000.
“If a teacher’s 2% raise does not bring them up to whatever their salary would be were they a new hire to Frisco ISD, we will ensure they are brought up to meet that new hire schedule,” Smith said.
Had trustees supported options A or C, which would create a shortfall, Smith said the district’s fund balance could help offset small shortfalls.
“We have a pretty healthy fund balance that we can manage small, planned deficits with,” Smith said. “I wouldn’t really want to go beyond a $5 million planned deficit.”
Zooming in
Smith said FISD’s operating revenue per student was higher than comparable districts for the first time in 2025, largely because the district began redirecting tax increment reinvestment zone, or TIRZ, revenue toward operations.
A TIRZ is a designated area that captures increases in property tax values over time and directs that revenue into a separate fund for projects. FISD participates in a TIRZ with the city of Frisco that was created in 1997, according to the district’s website.
“If we were to pull that TIRZ revenue out, our revenue per student would be less than our peers,” Smith said.
Smith said FISD’s instructional costs per student continue to increase, which she said could become unsustainable long-term.
“Our population is declining, but we have made a conscious effort to protect the classroom and protect programs as we have made budget cuts,” Smith said.
One more thing
District officials also reviewed the district’s debt service and child nutrition fund budgets.
The debt service fund, which covers district debt and interest payments, is projected to bring in about $175.8 million in revenue and have roughly $201.2 million in expenditures, meeting documents state.
Officials said TIRZ funding will not be used in the debt service fund and will instead primarily support projects in the general fund.
The child nutrition fund is projected to have about $25.3 million in revenue and $27.4 million in expenditures, which Smith said is about the same as the current fiscal year.
What’s next?
The board will hold a public hearing and consider adopting the budget in June, meeting documents state.
