Tomball ISD projects $3 million general‑fund shortfall for 2025–26 as legislature stalls

Tomball ISD Chief Financial Officer Zach Bowles told the board at a workshop that the district’s revenue projection for fiscal 2025–26 is $226.5 million while planned expenditures total $229.5 million, leaving an estimated $3 million shortfall.

The gap follows several revenue changes Bowles described: an increase in the Teacher Incentive Allotment from about $2.4 million to just under $3.9 million; revised guidance on the over‑65 “hold harmless” adjustment that allows roughly 63% (about $2.1 million) of that entitlement to remain in the general fund; and expected ongoing receipts from property‑value audits (historic settle‑ups have averaged about $2.3 million, ranging from roughly $1.1 million to $3.7 million). "Those three big changes ... get us to the $226,500,000," Bowles said.

Bowles said estimated expenditures for 2025–26 total about $229.5 million and currently do not include a district general pay increase, which the staff is holding pending the outcome of state legislation. "There are bills that impact teacher pay, and they both take a very different approach," he said, explaining the district is waiting to see how House Bill 2 and related measures are resolved.

The district’s base budgets total about $224.3 million under Bowles’s presentation; the administration applied a 10% reduction to departmental budgets as part of cost‑control measures. Priority 1 requests to cover enrollment growth, opening West Intermediate and the growth in special education total roughly $5.1 million and would fund 79 new positions; Bowles said 37 of those positions are specifically to address special education growth.

Bowles framed the budget picture in historical context, noting surpluses generated from earlier years (including federal relief funds) were used to stabilize finances while the state funding picture lagged. Payroll remains the largest line item, representing about 87% of the proposed budget, he said. If no additional state funding materializes and the district makes no further operational changes, Bowles’s projection showed the fund balance declining below board policy targets within a multi‑year view.

Board members asked about timing and the potential impact if House Bill 2 or other legislative measures move before the district adopts a budget. Trustee comments asked staff to monitor the legislative process closely and, if feasible, return immediately to the board if material new revenue appears. "If there's a chance that the $395 (per‑student increase discussed in HB2) plays out...there's probably $3,000,000 in there," a trustee said during discussion.

Bowles also reviewed two additional budgets the board must adopt in June: the child nutrition program, presented as balanced (97% of that program's costs were shown as payroll and supplies), and the debt service budget, presented with a tax rate assumption of 39.6¢ and a debt payment total shown as $77.5 million. "That final authorization allowed us to structure the debt to save on interest costs," Bowles said of recent refunding and issuance activity.

No formal action was taken at the workshop; the board will consider the budget for adoption at its June meeting and the administration said it will continue to update trustees if the legislative or revenue picture changes.