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Plano ISD projects $27.5 million deficit for 2025-26; board hears recommendation for 3% pay increase and starting-pay adjustments
Summary
CFO Courtney Reeves told the board the district faces a projected $27.5 million budget gap for 2025-26 driven by enrollment declines and rising recapture payments. District leaders recommended a 3% compensation increase, a raise to starting teacher pay and step-size changes to remain competitive.
Plano Independent School District officials told trustees on April 8 that the district projects a preliminary deficit of about $27.5 million for the 2025-26 school year and floated compensation changes aimed at keeping the district competitive as staffing costs rise.
Courtney Reeves, the district's chief financial officer, said preliminary figures show net revenue (after recapture) of about $530.4 million and projected expenditures (after recapture) near $557.9 million, leaving a $27.5 million shortfall as the district prepares its preliminary budget.
Reeves and other administrators said the shortfall reflects multiple factors: a projected decline in enrollment of about 877 students for 2025-26, continued property-value growth that increases the district's state recapture payment (projected to rise from roughly $144 million to about $151 million), and changes in state funding formulas.
To address personnel recruitment and retention, district compensation staff recommended a planning placeholder of a 3% across-the-board pay increase and proposed adjustments to the starting teacher pay and step increments. Dr. Kendall (compensation lead for the district) told trustees: "What we're proposing is a 3% raise." The district also proposed increasing the entry-level teacher salary (the presentation compared a $61,000 starting point to a proposed increase shown as about $62,200 in the materials) and raising the annual step increment on the new-hire schedule from $400 to $450.
Administrators highlighted several trade-offs and offsets in their budget work: local revenue projections were adjusted based on changes in Collin County appraisal values; the district expects to realize about $7 million in payroll efficiencies from campus consolidations tied to long-range facility planning; and one-time federal indirect cost revenue in 2024-25 will not recur in 2025-26. The presentation also listed a projected sale of retired campus land as a source of other revenue in 2025-26.
Transportation was singled out as an area for targeted market adjustments. The district recommended moving the bus-driver hourly rate to $25 an hour to remain competitive for that critical position.
Trustees, administrators and outside observers discussed possible legislative relief. Board members noted bills this session that would allow early recapture repayment discounts (a 4% discount was discussed as current legislative language under consideration) and said any change at the state level could materially alter the district's fiscal picture.
Administrators emphasized that the compensation recommendations were subject to change as the legislature acts and as final appraisal values and enrollment certifications arrive. No formal board votes on compensation were taken at the April 8 meeting; the presentation was an informational update and a basis for later budget decisions.
The board will continue the budget process as required by law and return to the board with final proposed tax rates and a balanced budget for 2025-26.
