Alvin ISD officials expect the operating budget for fiscal year 2026-27 to remain flat at about $391.4 million, unchanged from the FY 2025-26 budget.
AISD’s Chief Financial Officer Daniel Combs attributed this projection to slowed enrollment growth, changes in the state funding model and other variables discussed during the budget presentation at the board of trustees' May 5 workshop session.
The breakdown
Combs said revenue is expected to remain relatively flat due to slower-than-expected enrollment, and expenditures are also expected to remain stable, compared to FY 2025-26.
The budget for FY 2025-26 was built using an assumption of around 30,400 students, while updated projections for the 2026-27 school year are closer to 30,200 students, according to budget documents.
Maintenance and operations, or M&O, revenue, which funds daily operations, is primarily driven by student enrollment and attendance-weighted funding rather than property values, which limits revenue growth under current enrollment conditions, Combs said at the workshop.
The district originally modeled around $5 million in revenue growth for FY 2026-27 based on continued historical growth, according to budget documents.
“We all know sitting here right now, based on enrollment counts, that that's not going to happen,” Combs said at the workshop. “That $5 million that we hoped would compound and build over three years is no longer there.”
What residents need to know
The district is projecting a preliminary tax rate of $1.1353 per $100 valuation of a home for FY 2026-27, according to budget documents.
This tax rate combines $0.7405 for M&O and $0.3948 for interest & sinking, or I&S, which pays bond debt, according to budget documents.
The context
A significant long-term financial issue for AISD is the expiration of its tax increment reinvestment zone, or TIRZ, tied to Shadow Creek Ranch, a 30-year agreement established in 1998 to fund infrastructure through property tax growth.
Property values within the TIRZ are excluded from the state’s school finance formula, meaning the district is funded as if those values do not exist and therefore receives more state aid.
That structure effectively increases the district’s budget capacity by roughly $35 million-$38 million annually, Combs said at the workshop.
About $10 million of that is already factored into the district’s debt service plan, leaving roughly $25 million in operating capacity at risk when the agreement ends in FY 2028-29.
“Those values are not part of the value that goes to the Texas Education Agency to calculate our local fund assignment,” Combs said. “When TIRZ ends in three years, that structure changes. Those collections now go to increase the local fund assignment, and so there are no collections outside of that.”
The district is exploring options to offset the loss, including online programs, extending the school year and pursuing new state incentives, but none are expected to generate revenue at a scale comparable to student enrollment growth, Combs said at the meeting.
What’s next
The board of trustees is scheduled to consider adoption of the FY 2026-27 budget at its June 9 meeting.
The district expects to receive certified Tier 1 tax rates from the TEA in August and adopt the tax rate in September, according to budget documents.
