Denton ISD projects $21.5 million 2025–26 revenue shortfall; sets June 10 budget hearing

DENTON, Texas — Denton ISD staff presented projections on Tuesday showing a potential $21.5 million deficit for the 2025–26 general fund under current law and recommended steps ahead of a public hearing set for June 10.

Jennifer Stewart, the district staff member who led the budget presentation, told trustees the district’s average daily attendance is “hovering consistently around 94.5% this year,” a level staff say they now treat as the new normal after COVID-era adjustment. Stewart said the district is using a conservative ADA projection of 30,800 for next year as it builds the 2025–26 revenue model.

Why it matters: the district’s revenue picture has been altered by a mix of one-time settlements, shifting federal reimbursements and state funding offsets tied to property-value growth. Stewart said property tax collections are expected to rise from growth in taxable value, but that gain will be largely offset in the state funding formulas. Under the assumptions staff presented, projected revenues total about $323.6 million while projected expenditures are about $345.1 million, producing the $21.5 million gap.

Most important facts: Stewart told the board that changes from the current fiscal year include a $4.7 million increase in local revenue (largely from higher certified property values and tuition/athletic programs) and a $2.5 million upward adjustment in state funding; federal funding is down by about $2.2 million. For 2025–26 she said staff modeled 9.5% property value growth and made conservative ADA assumptions after slower-than-expected attendance recovery.

Staff cautioned that the legislature’s House Bill 2, as written in the House, would add roughly $17 million in new funding for Denton ISD but also create a minimum salary requirement that the district estimates would require setting aside about $6.3 million for raises — leaving a remaining shortfall even if HB2 becomes law. As Stewart summarized: the House Bill 2 funding “is a step in the right direction. It’s just not enough.” (statement attributed to a district official during the presentation.)

Board response and next steps: Trustees moved and unanimously approved setting the public budget and tax-rate hearing for June 10 at 6 p.m. at the Dennis Stevens Central Administration Building, and staff said they will present the formal proposed budget for adoption at that hearing. Stewart and other staff said they will continue to look for one-time revenues and grant opportunities to narrow the gap and will present the budget under current law unless new, confirmed legislative revenue arrives.

Details and context: Stewart described current-year swings (an estimated $4.4 million in unspent funds, a $5 million one-time property-audit revenue and a $2.7 million swing related to property tax refunds). She also reviewed nonpersonnel increases (utilities, insurance, transportation) and plans to reduce 60 nonclassroom positions through attrition. The district’s projected baseline expenditure for 2025–26 is $345.1 million, which staff said represents careful restraint but still produces the $21.5 million deficit under current law.

What the board approved: the board approved on a unanimous vote (motion moved by Mr. Stafford, seconded by Ms. Tayes) to set the required public hearing on June 10, 2025, at 6:00 p.m. (Location: Dennis Stevens Central Administration Building).

What remains unresolved: staff said some possible revenue sources remain uncertain — including special-education intensity funding proposals and other items still under negotiation in Austin — and therefore were not included in the district’s conservative baseline. Stewart and trustees emphasized they will continue to update projections before the public hearing.

Ending: District leaders told trustees they will present a formal proposed budget at the June 10 hearing and asked the public to follow up then for final adoption steps and any changes that result from the ongoing legislative session.