Castleberry ISD board adopts 2025–26 budgets, publishes tax rate at ceiling as officials warn numbers may change

The Castleberry Independent School District Board of Education voted 6-0 to adopt the district's proposed 2025–26 general fund, child nutrition and debt-service budgets and to publish the tax rate at the legal ceiling, district financial staff said.

The move fulfills the statutory requirement to approve the budget at the function level while leaving room for adjustments after state guidance and July certified property values are final, Chief Financial Officer William Wooten told the board during a public hearing.

Wooten said the adopted package is built on current law and the district will return with amendments if clarifying guidance on recently passed legislation arrives. "By statute, the board must approve the budget at the function level," Wooten said. He also warned that "in July, based on this proposed budget, if it's adopted, we'll have to come back with amendments once we get more clarification about House Bill 2."

Key figures presented to the board show audited 2023–24 collections of roughly $44.6 million and expenditures of about $49.4 million, producing a net deficit of about $4.7 million in that year. For 2025–26 the district projected total collections of about $45.3 million, including an estimated $11.1 million in local property-tax collections, $33.9 million in state funding and $300,000 in federal revenue. Wooten told the board the district expects modest enrollment growth (about 34 students) and that some federal and miscellaneous revenues were conservatively budgeted.

On debt service, the district published an interest-and-sinking (I&S) tax rate of $0.50 per $100 of valuation, similar to the prior year, and reported a Moody's A3 upper-medium-grade rating on its bonds. Wooten said the district's debt-service fund balance is about $4.6 million and that the proposed debt-service budget includes an anticipated draw to cover scheduled payments.

Officials also explained the district published the tax rate at the "tax ceiling" (the highest rate allowable before triggering a voter election) because July certified values had not yet been finalized. Wooten said local property values were reported to have increased about 5 percent in the district's preliminary appraisals, which triggers statutory tax-compression rules. "When that happens, it's by law that if tax growth is greater than 2.5 percent, a local tax rate will experience tax compression," Wooten said; he and the superintendent said the district estimates the compression could lower the maintenance-and-operations component by roughly 1.5 cents and that their modeling shows an average homeowner's tax bill could change by about $46 under the likely compressed rate (Wooten emphasized that final figures await TEA confirmation and the July certified values).

Staff briefed the board on specific revenue variances: audited 2023–24 federal reimbursements (including Medicaid-related SHARS) came in well under budget (the district had budgeted $900,000 but collected about $151,000), and the district is now projecting a more conservative federal collection ($148,000) for 2025–26 while adding a new indirect-cost recovery line expected at roughly $125,000. Wooten said the district had not consistently drawn indirect costs from federal grants in prior years and described the new process as "collecting money based on how much money the grant budget owner spends." "We left money on the table," he said of prior practice, adding the district now performs monthly drawdowns to recover allowable indirect costs.

Board action: The record shows the board approved the 2025–26 fiscal-year budget (general fund, child nutrition and debt service) and the consent agenda, including new-hire contracts; vote recorded as 6-0. The board also set its next regular meeting for July 14, when staff expect to present updated information after certified values arrive.

Why it matters: The approved budgets set spending priorities and establish the tax-rate ceiling the district may adopt. Because recent state legislation adds new allotments and restrictions, district leaders said they plan to be "optimistically cautious," balancing commitments while reserving flexibility to amend pay or allocations once TEA issues final guidance.

Next steps: Staff will re-run budgets against July certified property valuations and TEA guidance on House Bill 2, then return to the board with any required amendments and a recommendation for final tax-rate adoption no later than the statutory August meeting window (Wooten said the board will adopt the final rate after TEA confirmation).