Magnolia ISD adopts $204.3 million 2025–26 budget, keeps total tax rate under $1 and approves $500 one‑time payment

The Magnolia Independent School District Board of Trustees voted to adopt the 2025–26 proposed budget of $204,315,994 and approved tax‑rate components that leave the district's total ad valorem rate below $1 per $100 valuation. The board also approved a one‑time $500 retention payment for all employees to be paid Sept. 15.

Board members heard a presentation on revenue drivers and expenditures before the votes. Dr. Morris, district staff member and the meeting presenter, told trustees that “the 3 primary funds that the board is required to approve tonight are all balanced.” He said the budget was built on a conservative estimate of 400 new students but that enrollment growth has already exceeded that estimate.

The district listed several revenue drivers: enrollment growth, a one‑time increase in the state's new instructional facilities allotment tied to Magnolia Parkway Intermediate and Magnolia Parkway Junior High (described in the presentation as roughly $1,000 per new student, producing about $1 million for one year), and state funding changes from HB 2 that the presenter said are largely passed through for teacher raises. On the expenditure side, Dr. Morris noted the budget funds two new campuses, higher operating costs for those sites and passes state teacher raises while using additional local funds to give raises to all employees and to target the veteran teacher pay gap. “We closed the pay gap from approximately $5,000 to right at 2,500,” Dr. Morris said.

On the tax side, trustees approved a maintenance and operations (M&O) rate of 0.6657 per $100 valuation and a debt service rate of 0.2926 per $100 valuation, producing a total rate of 0.9583 per $100 valuation. Board discussion noted the Texas Comptroller's "no‑new‑revenue" calculation and truth‑in‑taxation language can make a proposed rate appear to raise taxes even when the district is compressing rates; Dr. Morris explained the statutory calculation "attempts to perform a calculation that says, based on your proposed tax rate, will you generate more revenue than you did last year or new revenue?" and cautioned it does not account for the state/local mix of school funding.

The presentation included comparative figures the district shared with the board: Magnolia ISD reported roughly $300,000,000 in outstanding debt, an outstanding‑debt‑to‑assessed‑value ratio of about 2.75 percent, and outstanding debt per student of just over $20,000. Comparisons in the presentation showed higher ratios and per‑student debt in some neighboring districts (Tomball, Montgomery, New Caney), and the presenter said Magnolia is among the lower total tax‑rate districts in the Houston area.

Formal actions taken (motions and outcomes): - The board voted to adopt the 2025–26 budgets as presented, in the total amount of $204,315,994 and a general operating fund of $157,411,826. (Motion: board motion to adopt; outcome: approved.) - The board approved the M&O tax rate of 0.6657 per $100 valuation and, as required by law, read the prescribed language that the total proposed rate of 0.9583 per $100 "is effectively a 10.47% increase in the tax rate" for purposes of the statutory notice. (Motion by Vasha, seconded by Jordan; outcome: approved.) - The board approved the debt service tax rate of 0.2926 per $100 valuation. (Motion by Stacia, seconded by David; outcome: approved.) - The board approved a resolution establishing a one‑time $500 payment to district employees, to be paid Sept. 15, as part of the adopted compensation plan. (Motion by Jordan, seconded by Stacia; outcome: approved.)

Discussion versus decision: trustees debated and asked technical questions about the truth‑in‑taxation language and the effect of tax‑rate compression versus actual revenue changes; those explanations preceded the votes but the board took formal, recorded actions at the meeting. Several board members expressed concern that the statutory notice language can be misleading for taxpayers because it does not reflect the state funding offsets for school districts.

What this does and does not do: the budget adoption approves spending and the tax rates for the coming year; the presentation noted the district expects additional snapshot enrollment before state funding calculations finalize and that some HB 2 funding details remain to be finalized. The board approved the one‑time retention payment via resolution to comply with requirements related to gifts of public funds.

A final note: trustees were told the district's enrollment assumptions are a moving target and that, at the time of the presentation, local counts exceeded the conservative growth estimate. The presentation and the votes will be reflected in the next regular meeting minutes and in state filings required under Texas law.