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Mercedes ISD presents proposed 2025–26 budget and tax rate, highlights insurance shortfall and improved fund balance
Summary
District staff presented a proposed 2025–26 general fund budget of about $57 million and a proposed tax rate of 1.097 (a roughly 3-cent decline), cited a potential $1 million health-insurance fund shortfall and said the district expects a larger unaudited fund balance than previously projected.
Mercedes Independent School District staff on Tuesday presented the proposed 2025–26 budget and tax rate at a public hearing, detailing a proposed general fund with roughly $57 million in revenue and a proposed total tax rate of 1.097 (a decrease of about 0.0297 from 2024–25).
Miss Horace, a district staff member who led the presentation, said the proposed tax rate breaks into three parts: the maintenance and operations (M&O) component, a state-mandated compression “pennies” provision set at $0.03, and a debt-service rate for voter-approved bonds. She said the debt-service portion would remain at $0.34 and that the $0.03 compression rate could generate about $900,000 for the district.
“This balanced approach is a positive step toward maintaining financial stability for the district while continuing to support our students and staff,” Miss Horace said, concluding the presentation.
Why it matters: the budget relies heavily on state funding and shows pressures from health insurance claims. Miss Horace told the board…
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