Denton ISD presents 2025–26 budget built on current law; advisory committee urges voter option to raise local revenue

Denton Independent School District officials on Tuesday presented a 2025–26 budget proposal built on current state law and preliminary property estimates that would generate $325.5 million in revenue against $345.1 million in proposed expenditures, producing a $19.5 million deficit.

At a public hearing held during the Denton ISD Board of Trustees meeting, district budget presenter Miss Stewart (district staff, budget presenter) told trustees the proposal assumes 9.5% property value growth and an average daily attendance of 30,800. “We are proposing a revenue budget of $325,500,000,” Stewart said. She told the board the maintenance-and-operations (M&O) rate was budgeted on a Tier 1 rate of 0.5774 plus the district’s six “golden pennies,” for total M&O of 0.6374 and a combined tax rate with debt service of 1.1174.

Why it matters: Trustees and community members heard the district’s finance staff and a community advisory group explain that local options are among the few remaining levers to restore long-term fiscal balance after repeated state funding shortfalls, inflation in operating costs and rising mandates.

The 19‑25 advisory committee — a community task force convened this school year to study long‑term fiscal options — presented a timeline of meetings and three TRE scenarios that the group estimated could raise between roughly $10.9 million and $22.0 million, depending on how many pennies above the Tier 1 rate voters approve. Greg Pedalek, a committee member, described the district’s fund balance decline since 2021 and said relying on reserves is not a sustainable path. “Without increased revenue from the state or voter‑approved local options, the district was forced to spend down the reserves to maintain core services,” Pedalek said.

What was discussed: Stewart provided details staff used to build the draft budget under current law: a conservative attendance projection, changes to departmental budgets achieved through a “zero‑base” process that cut roughly $1 million, and departmental and non‑personnel line items adjusted for inflation and insurance cost increases. She said state funding changes under the recently enacted House Bill 2 will include mandated pay increases for certain teacher groups and a new “allotment for basic costs” intended to help schools with inflationary expenses such as utilities and benefit costs. The district’s budget slides show a proposed $7 million increase in property tax collections (driven by assessed value growth), a $3.4 million net increase in total revenue compared with the current year, and an anticipated $3.0 million increase in expenditures (less than 1% overall).

Committee tradeoffs: Advisory committee members summarized the program and staffing tradeoffs they examined — from eliminating low‑participation programs (estimated modest savings) to expanding teacher instructional loads (estimates ranged from roughly $2.7 million to $4.7 million in savings) — and said members were reluctant to choose options that would worsen teacher burnout or reduce student opportunities. Aaron Layman, another advisory member, said the committee heard consensus that asking more of teachers through extended schedules would risk retention and morale.

TRE as an option: The 19‑25 committee recommended educating the community about a tax ratification election because many other cost‑saving levers had already been used. The committee presented three TRE variants: two golden pennies (+$10.9M estimated), two golden pennies plus one copper penny (+$16.7M), and two golden pennies plus two copper pennies (+$22.0M). Committee members explained that “golden” pennies (the first eight pennies above Tier 1) are not subject to state recapture, while “copper” pennies (the next nine) may be subject to recapture under Texas school finance rules.

Next steps and caveats: Stewart and other staff emphasized the draft is based on current law and estimated property values; the district expects certified values in July and TEA will assign official components of the rate in August, after which staff plan to return to the board with tax‑rate recommendations in September. Staff said they expect to bring amendments later in the summer and fall as the district receives certified values and final TEA guidance on House Bill 2 implementation. Board members and committee presenters stressed that the district must balance protecting classroom instruction with long‑term fiscal viability.

Quotes and context: Superintendent Dr. O'Bara (Superintendent, Denton ISD) warned trustees the apparent state funding increase will not fully close the local funding gap after required pass‑through pay raises and related payroll costs. “By the time you calculate our current deficit, you calculate the anticipated revenue, you plan for the required raises … that leaves us still with approximately a $9–10 million deficit before we consider a raise for anyone not required through that legislation,” O'Bara said.

What the board decided tonight: The board later approved the 2025–26 budget and related items during the business portion of the meeting; those formal actions are recorded separately in the district’s motions and votes log.

The budget process will continue over the summer as staff update estimates and prepare any necessary amendments for board consideration once TEA certifies values and issues tax‑rate components.