Pearland ISD superintendent outlines budget risks, proposes minimum 2% across‑the‑board raise pending state action

Dr. Larry Berger, Pearland ISD superintendent, told the Board of Trustees on April 8 that the district must plan its fiscal 2025–26 budget amid uncertainty from the Texas Legislature and possible changes to state school funding.

Berger said the district is projecting 20,668 students for next year and is using an average daily attendance (ADA) assumption of about 95% to model revenue. He warned that under current law Pearland ISD could face a roughly $8.6 million deficit if the board approves the compensation and program requests presented, though the district’s strong fund balance would leave more than 120 days of operating reserves in that scenario.

Why it matters: The Legislature is considering House Bill 2, which would raise the basic allotment; district staff presented two external “runs” of HB2 that would add an estimated $8.9 million (Moke and Casey run) to $11.0 million (TASB run) to Pearland ISD if the bill passes as drafted. Those amounts would materially change the district’s options for employee compensation and program funding.

During the presentation Berger broke out the main drivers the board will weigh: projected revenue declines from the state ASF fund (presented as about $4.4 million), a projected loss from foundational funding tied to enrollment (about $4.2 million), and an expected federal revenue reduction (about $700,000) as pandemic-era federal aid sunsets. On the expense side, staff estimated a districtwide 2% general pay increase (a GPI) would cost roughly $3.1 million. Additional requests shown in the presentation included a $1.5 million equity adjustment pool (to address job‑family median gaps) and about $310,000 for stipend market adjustments.

Berger said the district intends to ask the board to approve a minimum expectation it will communicate to employees — "we are going to ask the board to approve a minimum of a 2% GPI across the board" — while reserving final compensation approval for the June board meeting once legislative outcomes are clearer. He emphasized that any state direction that mandates spending (for example, a requirement that a portion of new state dollars be used for certain staff groups) would be incorporated into the district’s final decisions.

Board members asked for clarifications on how days in fund balance and capital needs interact. Berger and business staff said the district’s operating fund balance is unrestricted for board-approved uses and that the board has previously directed that 50% of any surplus be allocated to the capital renewal plan. Staff also said the capital renewal fund currently holds just over $6 million.

Staff flagged two procedural notes for trustees: (1) compensation plans are typically presented in May in nonlegislative years but will be finalized in June this legislative year, and (2) budget amendments and true‑ups may be needed if enrollment differs from current projections.

The presentation included several planning assumptions (95% ADA, projected taxable value growth, and potential changes to the homestead exemption). Berger and staff advised that the district’s 2026 outlook could change significantly if HB2 or other proposals are enacted and that they will return with further analysis and specific compensation proposals for board consideration.

Ending: Trustees were scheduled to receive additional budget workshops and a second presentation before adopting the 2025–26 budget in June. The board later approved a separate fiscal year 2024–25 budget amendment during the meeting (see “Votes at a glance”).