Lancaster ISD Faces Budget Gaps Amid Enrollment Decline and Rising Costs

The Lancaster Independent School District (ISD) held a public hearing on August 31, 2025, to discuss the proposed budget for the 2025-2026 fiscal year and the tax rate for the 2025 tax year. The meeting focused on the financial challenges facing the district, including declining enrollment, rising costs, and the impact of state funding decisions.

The Texas legislature recently approved a modest increase of $55 in the basic allotment for public schools, raising it from $6,160 to $6,215. This increase is intended to help cover rising costs associated with teacher retirement system (TRS) contributions and insurance premiums, which have seen significant increases. However, the funding provided by the state has not kept pace with inflation, leading to concerns about the district's ability to adequately compensate staff.

Enrollment in Lancaster ISD has decreased by 4.2% since 2019, reflecting a broader trend of declining public school enrollment across Texas. In contrast, charter school enrollment has surged, increasing by 30% statewide and 15-20% in Dallas County. This shift has further strained the district's financial resources.

The meeting highlighted the requirement for armed security officers on every campus, a mandate that has not been fully funded by the state. While the average salary for these officers is approximately $85,000, the state only provides $33,500 per eligible campus, creating a significant funding gap.

The proposed budget for the 2025-2026 fiscal year totals $87,891,897, with projected revenues of $78,065,712. Local revenues are expected to contribute $44,173,792, while state funding is projected at $33,361,920, and federal revenue at $530,000. The budget anticipates a fund balance impact of $9,826,185.

The maintenance and operations tax rate will remain unchanged at 0.7892, while the interest and sinking tax rate will also stay the same at 0.4375, resulting in a total combined tax rate of $1.2244. This decision reflects the district's efforts to maintain stability amid financial pressures.

Key challenges discussed included the rising costs of healthcare, transportation, and instructional supplies, which have all seen significant price increases. The district is also facing a projected drop in federal revenue, particularly from Medicaid reimbursements, which have decreased from $1.2 million to an estimated $530,000.

Overall, the hearing underscored the financial difficulties Lancaster ISD faces as it navigates declining enrollment, rising operational costs, and insufficient state funding. The district is set to seek voter approval for a homestead exemption on November 4, 2025, which could further impact its financial landscape.