Klein ISD faces $21.1M budget gap for FY 2025-26 amid increased expenses

The district’s expenditures outweigh its revenues for the FY 2025-26 budget by $21.1 million, according to budget documents. In April, Schaeffer estimated the general fund shortfall would be $39 million for FY 2025-26, as previously reported.

A request for KISD leaders to confirm the latest general fund shortfall for FY 2025-26 was pending as of press time July 18.

The big picture

Texas’ nearly 9,000 public schools will see an $8.5 billion funding boost over the next two years after Gov. Greg Abbott signed House Bill 2 into law June 4, as previously reported by Community Impact. Nearly half of that funding will be spent on raises for educators and support staff, such as bus drivers, janitors and librarians.

KISD is expected to receive about $29.4 million in additional funding for HB 2, Schaeffer said June 9. About $17.3 million of the funding, or 59%, is earmarked for nonadministrator employee raises under the bill’s requirements, he added.

KISD will also receive about $232 more per student in additional state allotment funding—which is the base per-student funding schools receive, as previously reported—according to Schaeffer’s June 9 presentation. Since 2019, the basic allotment stood at $6,160, but it was recently raised to $6,215 per student.

“We are very grateful for the additional funding, but really, the math demonstrates that this increase of 3.7% [for allotment funding] will not solve our inflationary issues facing districts over the last several years,” Schaeffer said during trustees’ June 9 meeting.

Districts across the state are battling inflation rates of more than 25%, so a raise of $1,500 to the basic allotment was needed to counteract that, according to Schaeffer’s presentation.

However, instead of putting funding into the basic allotment, senators opted instead to give schools $1.3 billion to cover fixed costs, which could include health insurance, teacher pensions and transportation, as previously reported by Community Impact. Senators noted May 22 that HB 2 would restructure Texas’ school finance system.

HB 2 sponsor Sen. Brandon Creighton, R-Conroe, said the $55 basic allotment increase is “less than 10%” of the new money schools would receive.

“Texans expect education dollars to support teachers and students and [staff],” he said. “The students, at the end of the day, they're our focus.”

Diving deeper

According to budget documents, major changes in general fund expenses and revenues for the FY 2025-26 budget compared to the adopted FY 2024-25 budget include:

• 43.1% year over year more, or a $140,000 increase, for the district’s juvenile justice alternate education program
• 20.4% year over year less, or a $105,977 decrease, for social work services
• 9.9% year over year more, or a $30.7 million increase, for state revenue
• 6.5% year over year more, or a $2.8 million increase, for facilities maintenance and operations costs

KISD teachers will receive raises ranging from $1,400-$5,000 as well as one-time retention incentives for the 2025-26 school year after the district’s board of trustees unanimously approved the employee raise package on June 24, as previously reported by Community Impact. Teachers and employees will also receive one-time retention stipends of $200-$800.

Looking back

On June 18, 2024, KISD trustees adopted a $698 million budget for FY 2024-25 containing a roughly $36 million budget shortfall, as previously reported. KISD’s shortfall was largely a result of a reduction in federal funding, high rates of inflation and a roughly $71.3 million reduction in property tax revenue compared to last year, KISD Chief Financial Officer Daniel Schaefer said.

On Feb. 3, KISD’s board of trustees approved the second budget review for FY 2024-25, which included a $3.2 million reduction for the district’s FY 2024-25 shortfall due to a 2022 property value study. The study determined that homes and businesses were overvalued, requiring the state to contribute more funding, according to KISD.

Hannah Norton contributed to this report.