Katy ISD trustees debate whether to carry forward locally funded teacher retention stipend amid HB2 pay increases

KATY, Texas — Katy ISD trustees spent substantial time Monday debating whether to include a locally funded teacher retention payment in the 2025–26 compensation plan now that the Texas Legislature last month approved teacher pay allotments in House Bill 2. At issue was a stipend the board approved in 2024 that provided modest “thank‑you” payments to teachers at five‑year service intervals. Some trustees said the locally funded payment should be re‑authorized in the compensation plan for 2025–26; others argued that HB2’s new statewide teacher allotment — which provides larger, broad‑based increases for teachers starting in year 3 and above and a smaller state contribution for other staff — is the more inclusive policy and that the board could use local dollars to address non‑teacher staff needs. Trustee Tracy Champagne repeatedly asked staff to clarify whether advancing the district’s local payment for year‑1 and year‑2 teachers would create a duplicate state payment when HB2’s schedule began applying to those teachers; staff said local advances can be structured and reconciled when state funds are received. Several trustees said they were concerned about fairness: last year’s retention stipend concentrated payments among a subset of longer‑service teachers, while HB2’s design tends to grant across‑the‑board increases that shift money to earlier‑career teachers as well. Board members who supported continuing the local retention allotment said the amount was modest relative to the district budget (staff estimates circa $1.1 million) and that preserving the local “thank‑you” would honor long‑service teachers’ contributions. Other trustees said the state allotment better accomplishes broad retention and that local funds may be more equitably used for hourly employees, paraprofessionals, custodians and other staff who are not covered by HB2’s teacher allotment. Practical next steps: staff recommended that the board could adopt a compensation plan this month that contains the state‑required allocations and either include a locally funded retention element or leave that line open so the board can take separate action later. Staff offered to provide an alternative compensation‑plan document for the board’s June 23 meeting showing both options. Why it matters: compensation policy determines local pay schedules, affects recruiter/retention outcomes and has immediate budgetary consequences. Trustees must balance a one‑time or recurring local “thank‑you” against broad increases authorized by the state, statutory limits, and the district’s projected general‑fund position.