GCISD CFO outlines 2025‑26 budget scenarios, warns of possible $1.5M shortfall under current law

David Johnson, the district chief financial officer, told the Grapevine‑Colleyville Independent School District Board of Trustees on April 14 that the district's budgeting process for fiscal 2025‑26 is operating under tight statewide pressures and that multiple revenue scenarios will materially affect next year’s bottom line.

Johnson said the district adopted a balanced budget for the year ended June 30, 2024, but subsequent changes in TEA templates reduced expected hold‑harmless funding tied to over‑65 homestead exemptions by about $2 million; flood‑control receipts the district received this year offset that change. He said 84% of district operating funding comes from the state’s formula and that the district currently budgets a little more than $140 million in total revenue for 2025‑26.

The CFO described a two‑day, line‑by‑line 0‑based budgeting review with the district’s executive team and said staffing accounts for about 87% of expenditures. Using conservative assumptions, Johnson projected the district would be near the adopted budget for the current year but estimated a potential shortfall of roughly $1.4–$1.6 million under current law for 2025‑26. He ran two legislative scenarios tied to proposals often called “House Bill 3” in the meeting: a $238 increase in the basic allotment that his model put roughly $3.0 million in the black, and a more generous consultant scenario (Moat Casey, $395 in the basic allotment) that showed roughly $2.0 million in the black. He cautioned those numbers include spending requirements attached to new state funding.

Johnson discussed recapture (the state’s “Robin Hood” mechanism), saying the district's current recapture obligation is near $36 million for this year; he cautioned that property‑value protests and changes in tax compression can alter that figure. He also noted flood‑control receipts are volatile — in the past they have ranged from less than $1 million to single‑digit millions — and are not a dependable offset for recurring costs.

Johnson explained the district is budgeting conservatively on tax collections (using a 99% collection assumption) and is netting out recapture and tax‑increment financing payments in presentations so trustees can see the net operating revenue available. He also said the district reduced staff positions in prior years and that the 0‑based exercise identified additional position adjustments for 2025‑26; Johnson did not provide an exact cumulative count of positions reduced since 2022 but said staff would provide that number in a future board update.

On compensation, Johnson reviewed the historical requirement that districts allocate 30% of any increase in the basic allotment to compensation and said legislative proposals under discussion could raise that floor to 40% and more tightly prescribe that most of the increase go to teacher pay (excluding benefits). He modeled the spending requirement into the scenarios and said the teacher‑targeted rules would change how additional funds could be used across the district.

Board members asked about specific items: the drop in interest income after Federal Reserve rate cuts, the unpredictability of flood‑control receipts, the mechanics and likely effects of tax‑rate compression and recapture, and whether the district had modeled an enrollment loss if statewide vouchers pass. Johnson said he had not modeled a specific voucher‑driven enrollment loss because the district’s demographer projections provide the baseline and he lacked a reliable method to predict voucher takeup.

The presentation also covered district efforts to increase non‑tax revenue: an RFP for advertising on buses, targeted facility partnerships including stadium and other facilities, and a proposed pilot to expand the district’s Early Childhood Development Center (ECDC) to offer pre‑K for 3‑year‑olds to non‑employee families. District staff also signaled interest in growing virtual‑learning offerings using the district’s existing programs.

Timeline: staff will receive final property values at the end of April, present a preliminary budget in May, hold required public hearings in June and seek board adoption in June according to the schedule Johnson outlined.

No formal budget vote occurred at the workshop; trustees directed staff to continue refining scenarios and to provide additional detail on position reductions, teacher/admin ratios, and the staffing‑reduction study at an upcoming meeting.