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HISD board approves 2025–26 budget as district narrows deficit to about $14.7 million
Summary
The Houston Independent School District board on June 12 adopted the district's recommended 2025—— 26 budget after staff described state revenue increases and expense reductions that narrowed an earlier, much larger deficit to an estimated $14.68 million.
The Houston Independent School District board on June 12 adopted the district's recommended 2025—— 26 budget, after administration presentations showing state revenue increases and central-office reductions that narrowed a prior multi-hundred-million-dollar gap to an estimated $14.68 million shortfall.
Superintendent Mike Miles and CFO staff told the board that recent state allotments and other changes increased revenue by about $175.4 million and that central-office and campus reductions trimmed expenditures by roughly $122 million. Miles said HISD would end the year with an approximately $785 million fund balance and that the administration expects to close the remaining gap through additional measures this fiscal year.
The budget matters because it determines staffing, campus programming and the district's ability to keep a strong debt rating that will reduce future borrowing costs. Miles framed the package as a set of difficult but necessary tradeoffs to preserve classroom dollars while restoring fiscal stability after sizable federal ESSER funds and enrollment declines left a prior structural gap.
Administration highlighted the main drivers: state increases including a $55 per-student boost in the basic allotment and several targeted allotments (teacher retention, school safety and basic cost support), plus about $83 million from the legislature overall. On the expenditure side, staff noted $29 million cut from central-office departments, about $35 million of campus adjustments tied to enrollment declines and $44 million less recapture expense relative to the prior year.
CFO staff and the treasurer described the district's strong debt-service position (S&P double-A-plus; Moody's triple-A) and noted the board would also approve the debt-service and nutrition-service funds. The administration said the district's current debt schedule pays down principal quickly and that recent refinancings saved taxpayers roughly $500 million in future interest.
Board members asked about reserve policy and long-term sustainability. Miles and finance staff said the district aims to keep a fund balance above TEA's 90-day guidance and to preserve stronger reserves (four months) to protect the district's bond ratings. Several new board members thanked staff for availability during a rapid orientation.
The board voted to adopt the recommended district budget for 2025—— 26 (general fund, debt service fund and nutrition services fund) as amended and approved remaining consent agenda items by consensus. The posted agenda contained a minor arithmetic correction to the revenue total that staff said had been addressed in the documents presented to trustees.
Board action: the motion to approve the recommended 2025—— 26 district budget (general fund, debt service and nutrition services funds) passed; the motion to approve the remainder of the consent agenda by consensus passed.
Looking ahead, the administration said it will monitor enrollment, push further central-office efficiencies and work to convert the narrowed shortfall into a balanced budget during the fiscal year.
