However, Chief Financial Officer Chris Smith said at the June 16 work study meeting that the actual shortfall figure will be smaller, if not a surplus entirely, due to the district’s history of underspending and property value audit recoveries.
“I didn’t lose sleep over the $26 million [projected shortfall for the 2024-25 FY],” Smith said. “I’m still not losing sleep. We’re going to add a fund balance.”
The gist
Smith said the projected shortfall largely reflects conservative budgeting, excluding expected underspending and property tax audit recoveries, rather than actual financial trouble.
“We budget for underspending, but we continue to always have underspend on top of it,” Smith said. “We budget as a backstop.”
For example, he said about $30 million in underspending helped prevent a deficit for the 2024-25 FY. Additionally, property value audits by the state comptroller, which adjust valuations and often increase funding, brought in $15 million for the 2021-22 school year.
A new audit is expected this year, with funds likely applied to the 2025-26 school year, although payments can sometimes be delayed depending on when the Texas Education Agency receives funds, Smith said.
The snapshot
Under House Bill 2, Smith said KISD received about $28.9 million to fund raises through 2027, including:
- $2,500 for teachers with three to four years of experience
- $5,000 for teachers with five or more years of experience
However, the new funding is still not enough to fully close existing budget gaps, especially in special education, which has a projected $29 million local cost, Smith said.
“It's not gonna close it all the way, but just step towards the right direction,” Smith said.
Out of local funds, Chief Human Resource Officer Brian Schuss said the district is implementing several changes, including:
- Raising starting teacher salary from $64,130 to $66,180
- A 3% raise across all pay grades
- A $5 per day pay boost for substitutes
Trustees also discussed the potential to include the lump sum stipend, which was implemented last year to reward staff for experience.
Important to note
To help pay for the $55 increase in per-student funding, Smith said the state lowered how much money districts can earn from local taxes, although the yield was expected to increase every biennium. As a result, Smith said this presents no “real gain” to the district.
Another thing
In November, Texas voters will consider increasing the state’s homestead exemption from $100,000 to $140,000 through Senate Bill 4 and boosting exemptions for seniors and disabled residents, Smith said.
He said this would potentially cut $22 million in debt service funding, which could be compensated by the state’s Additional State Aid for Homestead Exemption, or ASAHE, program to offset lost tax revenue.
Looking Ahead
The board will vote on the compensation plan June 23, followed by budget approval in July and August, Smith said.
However, Superintendent Ken Gregorski said certain components—such as adjustments to teachers with less than three years of experience—can be finalized at a later date, without holding up approval of the broader plan.
