Leander ISD budget briefing: new state law boosts some allotments but creates a one-year shortfall for a subset of districts

Leander ISD finance staff updated trustees on the proposed 2025-26 budget on June 9, explaining how recently enacted state legislation (House Bill 2) changes revenue flows and creates planning challenges for the district. District staff said House Bill 2 provides multiple new allotments including funds to support teacher pay increases (a $2,500 or $5,000 stipend for eligible educators), additional support for non-teacher staff and increased school-safety and special-education evaluation allotments. Those changes raised estimated state revenue in the district's template by roughly $11.5 million. However, the legislation also removed a hold-harmless adjustment that previously offset losses in local revenue for a small number of districts; Leander ISD is among roughly 10 districts identified by the state analysis. Staff said the net effect was a one-year reduction in locally available revenue that leaves the district roughly $2.1 million short of the board's 4.5% contingency threshold used in the budget. District leadership described two paths to bring the budget within the board's target: a plan A that would make limited use of bond-authorized savings and capital-eligible software purchases, and a plan B using a reserved contingency set aside in the general fund. Staff emphasized they expect to bring a budget that meets the board's parameters to the board on June 19, but cautioned that definitive answers about some teacher-eligibility definitions and final state rulemaking may not be available until July. The budget presentation also covered child nutrition (a planned fund-balance spend-down aligned with USDA requirements), a recent bond sale and the district's projected debt-service and tax-rate calculations under the new law. Trustees asked for additional detail on potential bond-eligible software purchases and alternatives to preserve staffing levels while balancing the 2025-26 budget.