McKinney ISD officials are projecting a nearly $6 million budget shortfall in the 2026-27 school year.
The big picture
The district’s board of trustees unanimously adopted the budget at a June 29 meeting. Action on the tax rate for the 2026-27 school year will come later this summer after the district receives certified property values, Chief Financial Officer Marlene Harbeson said.
The budget projects a roughly $5.8 million shortfall between revenues and expenses within the district’s general fund. More than $276 million is projected in revenues, and nearly $282 million is projected in expenditures, according to the budget.
As a result, the district’s fund balance, which will sit at about $91.5 million at the beginning of the school year, is expected to see almost $6 million drawn out for an estimated ending fund balance of $85.6 million, according to Harbeson’s presentation.
Harbeson attributed some causes for the changes to this year’s budget to tax rate compression alongside slowing property value growth. The budget also accounts for a projected enrollment of 24,000 students, approved 3.5% midpoint salary increases for teachers and staff, and a more than 6% increase in recapture, which totals nearly $8 million, budget documents state.
Budget explained
The budget is broken down into three separate funds:
- General fund: accounts for local tax revenues and expenditures related to daily operations within the district
- Student nutrition fund: accounts for providing lunch and breakfast to students
- Debt service fund: accounts for principal and interest payments on the district’s general obligation bonds
The student nutrition fund is projecting about $14.4 million in revenue and slightly less in expenses at $13.8 million, contributing about $600,000 in revenue to the fund’s balance. The debt service fund is projecting about $99.8 million in revenue and the same amount in expenses.
The context
The district has seen budget shortfalls in recent years and has taken action to reduce expenses, including eliminating vacant positions, reorganizing central office positions, reducing central office budgets and other operational adjustments. The district has also pursued revenue-generating opportunities.
However, Superintendent Shawn Pratt said there are some policies in place to limit spending in areas such as travel, but said they’re “not sustainable policies.”
One more thing
While board consideration is expected to come in August, district officials are currently proposing to decrease last year’s property tax rate, according to a staff presentation.
The 2025-26 rate totalled $1.1043 per $100 of assessed value, and officials are projecting the 2026-27 rate to be $1.0528 per $100 of assessed value, more than 5 cents lower.
“Historically, [McKinney], Frisco and Plano [ISDs] have typically been the lower three in Collin County; we surmise that we’re going to stay in that area,” said Dennis Womack, the district’s assistant superintendent of business operations, of the projected tax rate.
The projected tax rate is composed of two pieces that contribute to the general fund and debt service fund:
- Maintenance and operations rate: $0.7328
- Used to fund daily operations and maintenance
- Interest and sinking rate: $0.3200
- Used to fund debt obligations
The proposed decrease is composed of a $0.015 decrease in the maintenance and operations rate, which is determined by the state, as well as a 5-cent decrease in the interest and sinking rate, which is determined by the district.
“We have steadily been bringing the rate down since 2015, and we continue to do so,” Harbeson said of the interest and sinking rate.
Final action on the tax rate is expected in August after the district receives certified values from the Collin County Central Appraisal District and the maximum compressed tax rate set by the Texas Education Agency.
