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Ysleta ISD warns of mounting budget gap; board weighs $5,000 incentive and payroll loan
Summary
Superintendent and finance staff told the board the district faces a multi-year revenue shortfall driven by enrollment decline and uncertain state school finance; the district has offered a $5,000 retirement incentive and plans to seek payroll loans and other cost reductions.
Ysleta Independent School District leaders told the board on May 14 that the district faces an expanding multi-year budget gap driven by declining enrollment and uncertainty over state school finance, and they discussed a $5,000 voluntary separation incentive that administrators say will reduce personnel costs if many employees accept.
Superintendent Dr. De La Torre and finance staff briefed trustees on enrollment trends, state legislation and near-term budget actions. The district reported an average annual enrollment decline of about 1,227 students since the pandemic and said total projected student losses since 2021 will approach 7,900, a drop the presentation estimated would reduce revenue by nearly $79 million.
Finance staff described continuing legislative uncertainty around House Bill 2 and related appropriations (House Bill 500), both of which remained under negotiation in Austin. Board members were advised that the Senate's proposed changes would direct more new funds into specific programs rather than increase the basic allotment available as discretionary revenue to districts.
Dr. De La Torre told the board the district's unassigned fund balance of about $61.6 million at the audited year-end is expected to fall to roughly $37 million by the end of the current fiscal year. He said the district will present a budget that reduces expenditures to match anticipated revenues but warned he could not bring a balanced budget without further measures. He told trustees administration plans to present a payroll loan in June to cover August payroll if state payments are delayed.
Board members and public commenters discussed a $5,000 voluntary separation incentive that the district offered to employees earlier in the month. Public commenter Maria Hernandez, an Aesthetic Teacher Association vice president, said she supported the $5,000 but asked the board to include hourly employees. Commenter Jeff Signor warned that attrition that is not replaced can shift duties onto remaining staff and urged reinvesting savings back into retained employees.
Finance staff said the incentive was budgeted for up to 400 employees at a cost of $2 million; administration projected that if 200 employees accept the incentive the district would realize about $15 million in salary-and-benefit savings, with larger take-up producing proportionally greater savings. As of the board's May 14 meeting administration reported roughly 117 resignations had been received and that tally was increasing.
Board members raised additional budget pressures: rising health insurance costs (the district currently pays about $31 million per year toward benefits and employees contribute about $9 million), the cumulative effect of prior years' salary commitments that remain on the payroll, utility and safety costs, and limited remaining fund balance. Administration said projected increases to health insurance could be significant and recommended careful coordination before granting any permanent salary increases that would become ongoing obligations.
Trustees directed staff to continue developing options for cost reductions and revenue strategies, including campus consolidations and property sales to shore up finances, and asked administration to return with more detailed projections in upcoming budget workshops. Several trustees said they favored prioritizing protections for hourly employees if the board adopts a stipend or one-time payment, but no final policy decision on stipends or plan design was taken on May 14.
The board will consider a proposed budget and related resolutions at upcoming meetings after staff refines revenue estimates in light of legislative action in Austin.
