NEISD presents budget study No. 3: $625M general fund proposed and HB2 guidance limits flexibility

NORTHEAST INDEPENDENT SCHOOL DISTRICT — At its third budget workshop this month, district finance leaders walked the board through fund-level detail for the proposed 2025–26 budget and highlighted how new state requirements are changing long-term planning.

Susie Lackhorn, the district’s executive director of finance and accounting, presented a proposed general fund budget of about $625 million, up from $612 million in the prior year’s proposal. She described separate fund items including a roughly $412 million debt-service budget tied to recent refunding and long-term debt planning, a school-nutrition fund that is budgeted to bring revenue and expenditures to breakeven, and a general-fund expenditure mix that remains staff-heavy: salaries and benefits make up roughly 86–87% of total spending.

Lackhorn stressed that forecasts differ from adopted budgets because the proposed budget assumes a 100% fill rate for positions and full spending across departments. The district’s forecasted ending fund balance was presented as roughly 3.2 months of operating expenses on a conservative scenario; officials said better-than-expected enrollment or vacancy patterns could improve that outcome.

Several trustees pressed for details about specific functions and cost drivers. The presentation explained TEA’s functional reporting codes and the district’s longstanding target to place at least 65% of spending into instructional categories. Officials also reviewed maintenance/transportation shares (about one-third of non-campus spending), the administrative-cost ratio calculation that TEA uses to benchmark districts and new GASB accounting requirements that affect how software subscriptions and leases appear in the budget.

Board members and staff discussed the legislative landscape. Officials said the district is still awaiting TEA rules and clarifications tied to House Bill 2 (the recent school finance and compensation law) and noted that House Bill 3 created prior allotments that differ from the new law’s structure. Superintendent and trustees also warned that the state is increasingly directing spending into prescribed “buckets,” which reduces local flexibility. The presentation quoted the bill’s new facility-usage reporting requirement (page 204 of HB 2) that will require districts to publish campus square footage, capacity and usage information annually.

Finance staff said continued review will precede official budget adoption Thursday, and tax-rate adoption will follow later after TEA issues certified property values and guidance.