Red Oak ISD presents $102 million proposed 2025–26 budget; projected M&O tax rate to change after state guidance

Doctor Johnston, district staff, presented Red Oak ISD's proposed 2025'26 budget at a public hearing and summarized revenue, expenditure and timing issues for final adoption. "As we are required to do every year before we ask the board to adopt a budget, we have to have a public hearing to get feedback from anybody that wants to provide some feedback," Johnston said.

The package presented to trustees totals about $102,000,000 across the general fund, student nutrition and debt service funds. Johnston listed the major fund figures as roughly $79,000,000 for the general fund, $4,500,000 for student nutrition and $18,200,000 for debt service, and said the district's projected fund balance is about $21,000,000, roughly 27% of the budget.

Johnston said preliminary local property values provided April 30 initially showed a 19.3% increase over the 2024 certified value; the district later used a revised appraisal estimate of 9.76%. He also described recent state technical guidance that the district said would change the district's maintenance-and-operations (M&O) tax-rate calculation: "...the current budget had the 0.7377 ... tax rate," Johnston said, and a Texas Education Agency document received last week showed a compression figure that would produce a revised M&O rate of 0.7072. Johnston said the district expects the final rate from the agency after the district submits required July filings.

Johnston reviewed state revenue assumptions embedded in the proposed budget: a modest increase in average daily attendance (ADA), a $55 increase in the basic allotment from House Bill 2 and a higher school-safety allotment (presented as $20 per ADA and $33,540 per campus in the materials). He said the district is eligible for a fast-growth allotment tied to student gains and that some state reimbursements for teacher retirement system (TRS) contributions are expected to increase.

He also warned of reduced Medicaid-related reimbursements (referred to in the presentation as CHARS/Medicaid reimbursement), saying the district had reduced its budgeted Medicaid revenue from about $1,000,000 in prior years to roughly $500,000 for next year and that the state's recovery work dating back to 2011 had lowered the expected reimbursement.

On expenditures, Johnston said the district added a net four positions for student growth and program expansion, and is adding about 25 positions connected with the new Shaw Middle School. He said most of the budget increase is payroll-related and that roughly 85% of the district's current spending is for salaries and benefits.

Johnston outlined next steps: staff will continue to monitor developments, submit required filings to state agencies in July and expects to return to the board for a final adoption or a budget amendment in August (or possibly September) after receiving full state guidance. "We can adopt a budget probably August, but if not, maybe September," Johnston said.

During a brief question-and-answer period, a board member asked about the senior citizen/homestead exemptions and the effect of compression. A board member noted that homestead exemptions for seniors are protected from rate increases and that the change could reduce taxes for some over-65 homeowners.

No formal budget adoption vote occurred during this hearing. Johnston closed the presentation by inviting public comment; no members of the public came forward during the allotted time.