College Station ISD plans cautiously as enrollment declines, state funding uncertainty grows

Even with that projected shortfall, Superintendent Tim Harkrider and Chief Financial Officer Heather Wilson told Community Impact the district is in a stronger position than other Texas school systems because of years of financial planning and a sizable fund balance.

“We’ve done everything we possibly can,” Harkrider said in an interview with Community Impact. “I feel really good where we’re at right now.”

The backstory

For years, College Station ISD operated as a fast-growing district, typically adding 2.5%-3% more students annually.

That pattern changed after the COVID-19 pandemic.

Wilson said districts across Texas are now adapting to slower growth or outright enrollment declines tied to charter school expansion, private school growth, demographic shifts and lower birth rates.

District projections presented May 19 show smaller incoming kindergarten classes gradually replacing larger graduating classes over the next several years.

For the 2025-26 school year, Wilson said average daily attendance, or ADA, was recorded to be close to 96%. Harkrider said this year’s ADA was at its highest level since the pandemic. But because Texas public schools are funded based on attendance rather than enrollment, districts still lose funding when students miss school.

Harkrider said that difference costs College Station ISD an estimated $4 million annually compared to an enrollment-based funding system.

While Harkrider initially compared public and charter school funding imbalances, Brian Whitley with Texas Public Charter Schools Association told Community Impact Texas charter schools are also funded on attendance.

How we got here

District officials described the anticipated deficit as manageable and driven largely by statewide conditions rather than overspending locally.

Among the district’s biggest financial pressures are:

• Flat or limited increases in state funding
• Inflation affecting utilities and operations
• Expiration of federal Elementary and Secondary School Emergency Relief Fund pandemic relief funding
• Declining enrollment

At the May 19 workshop, Wilson explained how district leaders consolidated legal and insurance budgets into centralized accounts, reduced contingency spending and reevaluated staffing allocations throughout the district.

Overall, non-payroll spending increased by about $83,000 despite added costs tied to:

• Expanded event security requirements
• Utilities for the district’s new career center
• Additional custodial needs
• New Teacher Incentive Allotment software
• Expansion of the RISE student services program

The district also spent several years transitioning positions previously funded through temporary federal ESSER relief dollars into the general operating budget.

Harkrider said much of that adjustment work began before current district leadership arrived, helping soften the long-term financial impact.

Diving in deeper

Enrollment has become one of the district’s primary financial priorities.

College Station ISD has lost roughly 400 students over the past two years, Harkrider told Community Impact. It’s a decline that is already influencing staffing and operational planning.

Wilson told trustees at the May 19 meeting that the district now reviews every vacant position before refilling it to determine whether reductions can occur without affecting classroom instruction.

“We’ve done all of the hard work, I feel,” she said. “If the enrollment continues to decline or things like that, we’re ready to make those decisions.”

So far, staffing reductions have largely happened through attrition and reassignment rather than layoffs. Through attrition, the district may redistribute an outgoing employee’s tasks to other employees who can take on the additional work.

“We’ve been blessed that we’ve been able to [rely on attrition] and don’t have to have any layoffs and people are not losing their jobs,” Harkrider told Community Impact.

To help stabilize enrollment, the district also accepts a limited number of out-of-district transfer students.

Harkrider said district leaders increasingly view student recruitment as part of competing within a changing education marketplace.

“We can either play the victim, or we can create competition,” he said.

District leaders said roughly 25-30 transfer students have enrolled so far, with potential expansion to additional campuses depending on capacity.

By the numbers

Payroll accounts for roughly 83.4% of district spending, making enrollment closely tied to staffing levels. According to budget material from that same meeting, the 2025-26 total budget by object was about $156.3 million.

“We’ll always make decisions that’s best for our kids and best for our staff members,” he said, adding how the board of trustees also work to prioritize employees.

Compensation remains one of the district’s largest unresolved budget discussions heading into summer.

Trustees are currently weighing multiple raise options while trying to remain competitive with nearby districts, including Bryan ISD.

At the May 19 workshop, Wilson recommended increasing substitute teacher pay rates to remain competitive regionally and highlighted ongoing transportation staffing shortages.

Place 5 trustee Kimberly McAdams said uncertainty influenced her reluctance to approve aggressive spending increases despite the district’s healthy reserves.

Managing the impact

Wilson and Harkrider repeatedly emphasized that a projected deficit does not mean College Station ISD is in immediate financial trouble.

College Station ISD currently holds approximately $41.5 million in unassigned fund balance, which is well above the district’s required three months of operating expenses. A three-month fund balance for CSISD would be roughly $39.1 million.

Wilson explained that school districts rely on fund balances for cash flow because expenses are often paid months before state or federal reimbursements arrive.

Harkrider compared the reserve to a household savings account.

“We want to continue to try to operate with that three-month fund balance as long as we possibly can,” he said.

Trustees discussed several compensation scenarios May 19 that would still keep the district above its minimum reserve requirement, though some board members voiced concern about getting too close to that threshold if state funding stagnates.

Breaking it down

Even with budget pressures, local property owners could see a lower school tax rate next year, based on conversations in the May 19 budget workshop.

Preliminary projections show the district’s maintenance and operations, or M&O, tax rate decreasing from approximately $0.6963 per $100 valuation to somewhere between $0.6759 and $0.6878, depending on final property values certified this summer.

The M&O tax rate pays for the day-to-day operation of the district, including:

• Teacher and staff salaries
• Utilities and transportation
• Classroom materials and programs
• Campus operations

Harkrider also confirmed with Community Impact that College Station ISD is not considering a voter-approval tax rate election, or VATRE.

At the Capitol

While local budgeting decisions play a large role in planning, district leaders point to the Texas Legislature as the biggest variable shaping public education finances.

District officials said their primary legislative priorities include:

• Increasing the state basic allotment
• Moving from attendance-based funding to enrollment-based funding
• Restoring greater local control over school finance decisions

“We don’t really have anything to negotiate with or against since vouchers are in play now,” Harkrider said. “It puts us in a bad position.”

He added that districts could potentially face higher contributions to the Teacher Retirement System fund in future years, creating additional financial strain.

“[It’ll] be more of a defensive session for public [education] versus an offensive session,” he said, “and I think that will probably be a common trend for the next several years.”

The local impact

While College Station ISD leaders describe the district as financially stable, nearby Bryan ISD is navigating similar challenges with slightly different strategies.

Bryan ISD officials report larger enrollment losses in recent years and are studying multiple options to address projected budget gaps, including staffing adjustments through attrition and the launch of its Virtual Academy. Its board recently approved a voluntary efficiency audit ahead of potentially ordering a VATRE to go on the November ballot.

Both districts cite declining enrollment, inflationary pressures and limited increases to the state’s basic allotment as the primary drivers reshaping school finance across the region.

District leaders in Bryan and College Station alike say the biggest long-term factor will be whether the Texas Legislature provides additional funding flexibility for public schools.

Looking ahead

District leaders Wilson and Harkrider stressed that College Station ISD is not currently facing a financial crisis.

However, they also acknowledged that continued enrollment declines or stagnant state funding could eventually require more difficult decisions, including:

• Additional staffing reductions through attrition
• Department efficiency reviews
• Adjustments to staffing ratios
• Potential class size increases

“You may not have seen the effects yet,” Harkrider said, “but if things don’t change within the next three to four years, it’s going to change.”

Trustees are expected to continue budget and compensation discussions in upcoming meetings before adopting a final budget later this year.