Northside trustees set Aug. 26 hearing; finance staff warn of shortfalls, table TEA recapture action

The Northside Board of Trustees voted July 22 to set a public hearing for Aug. 26 on the district’s proposed 2025–26 budget and tax rate, while pausing action on a Texas Education Agency notice about ‘‘local revenue in excess of entitlement.’nFinance staff told trustees the TEA letter assumes the district has adopted all discretionary "copper pennies" above the statewide compressed rate and therefore shows possible recapture liability; the district does not plan a voter‑approved tax‑rate election now.nJake Smiley, the district’s director of budget, said, "We are not going to send any money back to the State. We will not have excess revenue this year in 2526."nWhy it matters: Trustees were shown a multi‑year projection that officials said has improved in recent months but still shows a fiscal gap. Administration figures presented at the meeting showed an estimated $91 million deficit for the current fiscal year (ending Aug. 31) as of the latest projection, a projected $22 million shortfall for fiscal 2026 and, under current assumptions, roughly a $38.4 million shortfall for fiscal 2027.nWhat the board did and did not do: Trustees approved the Aug. 26 date for the public hearing on the budget and proposed tax rate. On the TEA-required option about handling any potential recapture, trustees decided to postpone final action and asked staff to return with additional detail at the next meeting.nDetails from the presentation: Finance staff said several moving pieces affect the projections — updated property valuations, recently enacted state changes (including items in the session commonly called House Bill 2), staffing fill rates and one‑time items. Staff reported: projected gross property value growth of about 3 percent but an effective taxable‑value decrease of about 2 percent when proposed new homestead exemptions are applied (per TEA guidance); a one‑time property‑value audit estimate of about $18 million; and a payroll accrual of approximately $15 million reflecting the district’s calendar shift. Finance staff also said the district uses a 94 percent average staff fill‑rate assumption to budget salaries and benefits.nSuperintendent and CFO context: The superintendent told trustees the district has worked to reduce planned expenditures and has already enacted staffing and departmental reductions in recent months. Megan Bradley and her team said non‑teacher staffing was reduced by 85 positions and teacher staffing scenarios reduced about 414 positions in planning, achieved largely through attrition and reorganization rather than layoffs.nFund balance and next steps: Administration showed the board the district’s designated instructional‑continuity fund balance (about $48.9 million) and said that, without additional measures, that designated balance would be drawn down and unassigned fund balance used in FY27. Staff emphasized the goal of producing a balanced FY27 budget without dipping into unassigned reserves and said they will continue hiring reviews, central‑office reorganizations and other efficiency work. Staff will return with additional details for the board’s Aug. 12 meeting and will bring adoptable budgets and tax‑rate proposals for possible action on Aug. 26.nQuotations: "We are not going to send any money back to the State," Jake Smiley said when summarizing TEA’s estimate. Megan Bradley described the key enrollment and staffing assumptions used in the model, noting the district is budgeting with a refined average daily attendance assumption of about 91,500 and a membership estimate of about 97,300.nNext steps: Trustees asked administration to provide the TEA letter and all five options the agency lists for districts in that situation, to verify county tax‑value certifications as they arrive, and to return with a recommended option on the TEA notice at the next board meeting. The Aug. 26 public hearing remains scheduled for the board’s regular meeting that evening.