The Mesquite Independent School District Board of Trustees on July 31 approved a compensation plan and budget amendments that incorporate state funds from House Bill 2 and add district-funded raises, while leaving the district with a projected deficit for 2025–26. The board voted to amend the 2025–26 budget to reflect an $18.4 million increase in projected state revenue and roughly $15.9 million in additional payroll costs tied to the new compensation plan.

Why it matters: District leaders said the state’s formula limits local control over how increased revenue may be used and that most new funds are earmarked for teacher pay and certain mandated areas. That leaves the district still operating with a multi‑million dollar shortfall and facing tougher choices to produce a balanced budget for 2026–27.

The compensation presentation was led by T. J. Reid, executive director of personnel services, who told trustees the state’s HB2 designates roughly $10.8 million toward teacher compensation increases and a roughly $1.2 million support-staff allocation. Reid said “the pie chart identifies that 86% of our revenue goes to payroll cost,” and that the district’s total revenue is about $448,000,000 against roughly $465,000,000 in projected expenditures, leaving about a $17,000,000 deficit for 2025–26 after the amendments.

Board and staff described how HB2’s pay thresholds work. Reid said teachers who meet 3–4 “creditable years” of service will receive a $2,500 increase and those with 5 or more creditable years will receive an additional $5,000 step funded by the state; the board clarified that the $5,000 for the 5+ threshold means reaching that threshold triggers the next funded step, not an added $5,000 on top of the 2,500 beyond what was already received. District-funded items include a $1,300 market‑midpoint increase for certified teachers with one to two years of experience and a suggested 3% midpoint-based increase for a subset of support staff and campus leaders; other professional/administrative staff were proposed at a 2% midpoint increase.

Timing and retro pay: Reid said teachers and certified professionals with a start date after July 1 will see their increases included in the August 27 paycheck; other employees will see increases on their next scheduled pay dates and will receive a one-time retroactive payment to cover missed pay periods.

Budget impact and next steps: Chief finance staff briefed trustees that the district adopted a deficit budget in June and that the HB2 revenue and the added payroll costs reduce the deficit from the previously approved $19.3 million to an amended $17.2 million shortfall. Finance staff reported prior reductions to expenditures (including central office savings and position eliminations) lowered a prior, larger deficit from approximately $29 million toward the current range. Trustees and administrators said they are preparing a planning process to identify reductions and bring a balanced 2026–27 budget, noting cuts will need to touch programs, positions and payroll.

The board voted to approve the budget amendments; the motion passed by voice vote with “ayes have it.” Trustees also approved a resolution declaring the district’s expectation to reimburse certain capital expenditures for the Gentry Elementary School project with future debt proceeds. Finance staff said the Gentry project’s cost is about $13.7 million and that funding would come from a combination of 2025 bond proceeds (about $5 million), fund balance (about $7 million) and remaining 2018 bond funds (about $2 million).

Discussion vs. decision: Trustees and staff extensively discussed funding mechanics and future constraints (discussion). The board formally approved the compensation plan, the budget amendments and the reimbursement resolution (decisions). Staff committed to a transparent budget planning process for 2026–27 and to provide employees with individualized salary sheets once the payroll changes are finalized (direction).

What trustees said: Trustee Rose noted the board’s priority is to “compensate our people” and warned the 14% of the budget outside payroll is the primary place to find cuts. Trustee Seward and others emphasized that the legislature’s targeting of funds reduces local flexibility and that continuing to draw down fund balance is unsustainable. Superintendent Dr. Rivera and finance staff described central-office spending reductions and said administrators plan further work to present a balanced budget for 2026–27.

Outcome: Board approval of the 2025–26 compensation plan and budget amendments, and adoption of the reimbursement resolution for the Gentry Elementary project. Trustees directed staff to continue budget planning to produce a balanced 2026–27 budget.

Ending note: Trustees and staff repeatedly urged community members and employees to follow the district’s planning process and watch for forthcoming communications, including employee-specific salary sheets and public budget discussions.