Northside ISD staff outline effects of 89th Texas Legislature; House Bill 2 will raise teacher pay but leave budget shortfalls

District staff briefed the Northside ISD Board of Trustees on June 10 about major items from the 89th Texas Legislature that could affect operations, funding and district policy, with a focus on House Bill 2's school finance provisions.

The presentation, led by district leadership and finance staff, summarized several bills discussed during the session and their expected operational effects on Northside ISD. Staff said House Bill 2 had been signed by the governor the prior week and contains the largest school-finance changes the board has tracked; other bills discussed were at various stages of enactment or rule-making.

Key figures and provisions described by staff included:

- Teacher retention allotment: a state-directed increase that, as explained by staff, prescribes $2,500 for classroom teachers with three to four years of experience and $5,000 for teachers with five or more years of experience; district staff estimated roughly 650 teachers would fall in the 3'to—2-year band and 5,150 in the 5-plus band, yielding an estimated teacher-retention allotment cost of about $27.4 million for Northside ISD. Staff cautioned that rule-making will be required to clarify eligibility and other details.

- Allotment for basic costs ("ABC allotment"): $106 per enrolled student, which staff estimated would generate about $10,000,000 for Northside ISD; staff said the law allows that money to be used for items such as health insurance, employee benefits, payroll taxes and to supplant certain local costs.

- Special education evaluation allotment: a new $1,000 payment per evaluation was noted; staff said the district performs roughly 400 evaluations per year and would submit evaluations for reimbursement under the new allotment, though the specific reporting mechanism is subject to rule-making.

- Support-staff allotment: $45 per adjusted average daily attendance (adjusted ADA), which staff estimated at $81,397 adjusted ADA for Northside and a resulting allotment of about $3,660,000 that could be used for nonadministrative staff compensation; staff emphasized the allotment cannot be used for administrators under the legislation.

- Other bill items discussed: staff summarized several other enacted or proposed bills mentioned in the session, including legislation addressing THC preparations (described in the briefing as Senate Bill 3 and not yet signed at the time), changes to recognition of sex designation on some documents, increases to the school safety allotment, limits on recess or PE removal for discipline (identified as Senate Bill 25), library/book authority (Senate Bill 13), restrictions on diversity, equity and inclusion work in schools (Senate Bill 12), a requirement for boards to adopt homeschool opt-out policy by Sept. 1, 2025 (House Bill 401), and House Bill 4623 related to district liability and governmental immunity. Staff cautioned that many items will require rule-making before districts can finalize operational responses.

Staff identified costs the state allotments do not fully cover: for example, benefits and employer retirement contributions tied to the teacher pay increases were estimated at about $3,000,000 not covered by the teacher-retention allotment; benefits costs for the support-staff allotment were estimated at roughly $300,000. Staff described an initial estimate that after applying the ABC allotment and other measures the district might free about $6,000,000 to help with the projected budget deficit, but they emphasized modeling and supplanting details remained incomplete.

Board members asked about sustainability, eligibility details (for teachers transferring from other districts or out of state), and how the state's formula changes could create winners and losers among districts. Dr. Kraft, speaking for district leadership, said, "House Bill 2 is not fixing our financial situation, nor any other school district that I've had the opportunity to visit with, not by a long shot," and urged continued caution in budget planning.

No formal board action was taken on policy or budget items during the briefing; staff said more modeling and rule-making guidance from the Texas Education Agency is expected and that a compensation proposal would be presented to the board at a future meeting.