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LISD projects FY25 shortfall under one scenario; FY26 outlook depends heavily on Legislature and certified values
Summary
District staff updated trustees on fiscal year 2025 projections and initial fiscal year 2026 forecasts, showing a range from a modest surplus to a multi-million-dollar deficit depending on corrected T2 values and possible legislative funding changes.
Scott Rarer, chief financial officer, updated trustees on the district’s fiscal-year 2025 projection and early modeling for fiscal year 2026.
Rarer said April enrollment was about 47,024 and the district’s snapshot budget assumed 48,100. Through March staff projected fiscal 2025 revenue at about $542 million — roughly 2.5% below adopted budget — primarily driven by enrollment declines and preliminary property-value shifts. Expenditure savings (notably non-payroll) were contributing roughly $16 million in projected savings that helped offset revenue shortfalls.
Rarer presented two scenarios for FY25 depending on whether corrected T2 values are accepted by the comptroller. If preliminary T2 values are unchanged, the district could face a deficit near $10.7 million for FY25; if corrected values hold, the district could see a surplus of about $3 million. He cautioned the comptroller’s corrections typically are not final until after the fiscal year closes.
Looking at FY26, Rarer modeled a beginning deficit of about $24.5 million before identified reductions. Staff identified roughly $11.4 million in potential reductions (including staffing and program adjustments under study) that would reduce the gap. A 3% across-the-board compensation increase would add roughly $11.4 million. Using conservative state funding projections (Mo Casey run), the district’s FY26 shortfall could be about $2.7 million; alternative legislative outcomes and school-safety allotment changes could alter that number.
Trustees discussed the uncertainty, asked for scenario charts showing fund-balance impacts, and urged continued advocacy for basic-allotment increases.
Ending: Staff will update projections as certified values arrive in July, return with scenario charts showing fund-balance trajectories, and continue to refine budget reduction options.
