Tyler ISD presents preliminary 2025-26 budget showing payroll-driven increases and a $191 million plan

Tyler Independent School District officials on Tuesday presented a preliminary 2025-26 budget that projects $191,000,000 in revenues and expenditures and allocates almost all of an $11.34 million net revenue increase to payroll and benefits.

The presentation, led by a district staff member, laid out revenue and expenditure assumptions and stressed that some figures are estimates that depend on finalized property values and pending legislative action. As the presenter summarized: "So there's 4 revenue sources for the budget."

Why it matters: most of the funding increase is already spoken for and is tied to pay and benefits, limiting flexibility for other district priorities. The district also flagged a policy choice headed to voters this fall that would affect local tax collections and state funding calculations.

State funding and local revenue: The district projects total state revenue rising by about $16.1 million, driven by increases such as a new allotment for fixed costs from House Bill 2 and growth in average daily attendance. Local property-tax revenue is projected to decline by about $3.6 million, the presenters said, because voters will consider enlarging homestead exemptions on the November ballot ($40,000 for general homestead and $50,000 for 65-and-disabled homesteads). The administration cautioned that property-value estimates are preliminary and "not perfect," and that final values expected later in the week could change the numbers.

Payroll and benefits consume the gains: Finance staff told trustees that 99.9% of the budget's increased revenue will be spent on payroll and benefits. The budget includes an allocation to meet state-required teacher raises under the teacher retention allotment and additional local increases: 3% midpoint adjustments for professionals, 5% increases for paraprofessionals and manual trades, and step-like increases tied to experience for teachers. The staff member said, "So overall, state revenue is going up $16,100,000." The projected net increase in payroll and benefits is about $11.3 million.

Federal and other revenue: The district plans to exit the SHARS Medicaid billing program after a cost/benefit review, estimating a $1,000,000 reduction in federal revenue from that source because billing requirements and administrative burdens have increased and reimbursement has declined. ESSER-related residuals also reduced federal revenue. Other income sources (tuition for pre-K, athletics, interest) were described as modest and subject to change.

Expenditure highlights and constraints: The packet lists a roughly $158,000,000 salary-and-payroll total (about 83% of expenditures). Debt-service payments are projected at about $30,000,000 and drive portions of the tax rate. Staff noted that many increases are ‘‘flow-through’’ items—state allotments that must be spent on matching expense increases (for example, teacher incentive allotment matching teacher payments and TRS on-behalf costs rising with salaries).

Process and timing: Presenters repeatedly emphasized the preliminary nature of some numbers and said they will update estimates after the county appraisal roll is finalized. Trustees asked for additional detail on specific line items (stipends, athletics operating budgets, and how state compensatory funds are treated). The presenter pointed trustees to pages in the budget packet for further detail and said campus allotments will be adjusted in October when official enrollment snapshots are available.

Board action and next steps: The presentation was informational; trustees did not adopt the budget at the meeting. The packet will be revised with final property values and staff said they will return with updated numbers and additional reports, including staffing-certification data requested by trustees. One separate motion later in the meeting (not a full budget adoption) approved compensation items labeled "a and b" in the consent agenda; those particular items were moved and approved, recorded in the meeting minutes as approved by voice vote.

What remains uncertain: The district repeatedly noted that property-value estimates, state legislative developments (including items under special session), and federal program reviews could change final revenue projections. Staff described the SHARS estimate as a "$1,000,000 decrease to the budget" but said actual annual revenue from SHARS in recent years has been much smaller and subject to federal review.

Ending note: District staff framed the 2025-26 proposal as balanced under current assumptions but stressed limited flexibility because nearly all new revenue would fund mandated or contractual payroll increases. Trustees asked administration to return with more granular staffing and stipend data before final budget decisions.