Pearland ISD projects modest deficit for 2025–26 as legislature clouds school funding; board sets June public hearing on tax rate

Pearland Independent School District officials on Tuesday laid out a 2025–26 budget built on conservative legislative estimates and staffing assumptions, projected a $1 million shortfall under current law and set a June 24 public hearing to discuss a proposed tax rate of $1.1157 per $100 of assessed value.

The budget presentation by Dr. Berger, the district’s superintendent, said the district is basing revenue projections on the House’s run of proposed school funding changes rather than the Senate’s alternative calculations. “If we can increase our daily average attendance by 1%, it's about a million dollars extra in our funding,” Dr. Berger said, stressing the district’s sensitivity to average daily attendance and state actions.

Why it matters: Pearland ISD’s revenue outlook depends heavily on pending bills in the 89th Texas Legislature, local property values and student attendance. Board-level decisions this spring will determine whether the district posts the maximum tax rate now (required to preserve flexibility) and what compensation package trustees will consider in June.

Key facts and context

- Funding assumptions: The budget uses a 2% general pay increase (GPI) across the board as the baseline and factors a 5% salary-savings assumption into projections. Stipends and equity adjustments are budgeted separately; HR proposed roughly $310,000 to update stipends across the district.

- Legislative uncertainty: The presentation centered on House Bill 2 (the chamber’s funding proposal) and two commonly used runs that estimate local impacts. The district said it will use the “Moke And Casey” run for conservative estimates. Under that run, the district would see roughly $8.9 million in additional general fund revenue if HB2 passed as drafted; TASBO’s run produced markedly different figures reported during the presentation. The board and staff emphasized they are awaiting final action by both chambers and any conference committee results.

- Enrollment and funding drivers: Student enrollment projected for 2025–26 is 20,668 (a decline of 74 students). The budget is based on 95% average daily attendance (ADA) funding; staff warned that a 1-percentage-point ADA gain could yield about $1 million in additional revenue.

- Taxable value trends: Staff reported preliminary appraisal growth of about 3.28 percent, down from earlier projections of roughly 5 percent, which affects tax compression and tier 2 formulas tied to local property values.

- Contingency and reserves: The presentation described a consolidated contingency of about $7.6 million moved from many smaller accounts to one contingency line to ensure funds are available for emergencies, repairs and tariff-driven price increases. The district reaffirmed a board target fund balance of 95 days.

Board actions and next steps

- The board unanimously (7-0) approved a motion to hold the public hearing on the 2025–26 budget and the proposed tax rate on June 24, 2025, and to publish a notice with a proposed maximum tax rate of $1.1157 per $100. Staff noted the board may adopt a lower rate in August but cannot adopt a higher rate without reposting.

- Trustees unanimously (7-0) approved a request for additional personnel tied to student needs and operations, including an LPAC facilitator, bilingual diagnostician, art facilitators for special education caseloads, four bus monitors for special-education transportation and a teacher-service coordinator to support recruitment/retention and TIA administration.

- Trustees unanimously (7-0) approved the capital renewal plan priority list the administration presented (priority projects will proceed to procurement; large purchases will return to the board when required by procurement thresholds). The administration said the approved priority list totals roughly $3.9 million of a current CRP balance of about $5.7 million.

Discussion highlights, limits and unresolved questions

- Compensation: Staff recommended the board discuss compensation at a June meeting. The packet included “what if” scenarios: a districtwide 3% GPI was estimated to widen the projected 2025–26 deficit by roughly $960,000 (to about $1.9 million) under current assumptions, but staff said if HB2 passed and its required compensation share were received the district could recommend a higher GPI. Staff repeatedly warned that the final legislative language (including whether “40% must be directed to compensation” and the 75%-of-that-to-teachers provision are applied as expected) will determine allowable uses and that some required increases must be coded as ongoing salary rather than one-time stipends.

- Funding sources at risk: Staff noted a federal reduction in certain SHARS reimbursements (special education Medicaid-related funding) that decreases federal revenues; the district will need to pick up those services from the general fund if reimbursements do not return.

- Conservative baseline: The administration said it will use conservative runs and expects to update the board as the legislature finalizes outcomes; any actual fiscal impact will be adjusted when certified property values and final legislative outcomes are known.

What the board did not decide

- No final compensation package was adopted. Trustees set dates and priorities and approved personnel and capital lists but will consider compensation specifics (and final tax-rate adoption) after legislative action and certified values.

What comes next

- June 10: public compensation discussion; June 24: public hearing on the budget and proposed tax rate; July: strategic planning and certified values; August: formal tax-rate adoption and final budget votes (per the administration’s stated schedule).

Speakers quoted or referenced in this article may be found in the meeting record and include Dr. Berger (superintendent) and multiple trustees who asked questions during the presentation.