Editor's note: The headline of this article has been changed to accurately reflect the context of the discussion at KISD's June 19 special board meeting. Decisions have not yet been made in regards to salary changes for employees.

Though a $3.5 million surplus is anticipated in the projected fiscal year 2023-24 budget, Katy ISD officials said salary increases for teachers and staff will take a direct hit from public education dollars unspent at the state level.

In a nutshell

The district’s chief financial officer, Christopher J. Smith, said that despite an $8 billion surplus originally set aside for schools, low attendance rates and higher property values throughout Texas caused the state to underspend on public education.

“Average daily attendance statewide is down, and property values are up,” Smith said at a June 19 special board meeting. “Even though we had the homestead exemption, and we still lowered the maintenance and operations tax rate—it wasn't enough statewide.”


The details

Throughout the 88th legislative session, KISD monitored several items that would impact school finance:
  • A $32.7 billion state surplus
  • Property tax cuts
  • An enrollment-based funding allotment
  • School safety
  • The basic student allotment change
  • Teacher pay
  • Benefits for retirees
Increases to the basic student allotment did not pass, leaving the state funding at $6,160 per student—as it has remained since 2019-20. Additionally, enrollment-based funding and salary increases for staff did not make it through the session.

Meanwhile, school safety mandates and retiree pay did pass. House Bill 3 will see that a school safety allotment dedicates $15,000 toward each district campus, totaling $1.25 million for KISD.

Property tax relief is still under debate at the state level in a special session, and until lawmakers agree, those funds remain untouched, said Smith.


Smith told board members the only funding “saving this budget’s bacon” is a $26 million increase in the district’s golden penny yield—a tax revenue not subject to recapture by the state that is accessible per the discretion of the school board, according to the Texas Education Agency.

A closer look

KISD board of trustees receives updates on the budget throughout the year, up until the budget is finalized in September.
  • January: introduction and budget parameters
  • February: long-term debt plan and projections presenters by debt service fund
  • March: initial look at budget projections, general fund
  • June: in-depth look at budget projections
  • July: all budgeted funds projections
  • August: public hearing to discuss budget and tax rates
At a June 26 meeting, board members will hear a report on an attendance incentive initiative that Smith said could earn the district money toward next school year’s budget. Smith said attendance rates are one of few school finance items within KISD’s control that could influence the budget for FY 2023-24.