La Porte ISD adopts proposed fiscal 2026 budget, cites uncertainty from House Bill 2

La Porte Independent School District's Board of Trustees on Tuesday unanimously adopted the district's fiscal year 2026 budget for the general fund, debt service fund and food-service fund and approved a compensation plan, while officials warned that state legislation enacted in early June will change the district's final finances.

The board adopted a proposed maintenance-and-operations (M&O) tax rate of 0.8023, a debt-service rate of 0.6219 and a total proposed rate of 1.0642 per $100 of taxable value, the district's chief financial officer said during a public hearing on the budget. The board voted 7-0 to approve the budget after the hearing and a motion from Trustee Sharpie.

CFO Mistie McDowell told trustees the budget presented on June 10 is based on current law and that La Porte ISD will amend the budget later once the Texas Education Agency publishes House Bill 2's calculations. "Because we do not yet know exactly how school funding will affect us under House Bill 2, we are asking the board to adopt a budget based on current law and to amend it when we receive certified calculations," McDowell said.

The district projected enrollment of roughly 7,100 students and estimated average daily attendance at about 6,400. The proposed general fund budget shows roughly $132 million in revenue and $141 million in expenses, producing a projected operating deficit of approximately $8.2 million; the beginning fund balance was estimated at about $50 million, leaving a projected post-budget fund balance near $42 million before any House Bill 2 adjustments.

McDowell said the district expects some new state allotments under House Bill 2, including additional funding for safety and security, special education and other designated allotments, but she emphasized the allotments will be offset partly by recapture (the state's school finance equalization mechanism). "We know recapture is going to drop," she said, while also noting the allotments will be offset in the final calculation the agency produces.

Board discussion highlighted the long-term effect of recapture on La Porte ISD finances. A trustee noted that since 1994 La Porte ISD has contributed hundreds of millions in recapture and described recapture as the district's second-largest expense. Trustees asked staff for follow-up details on campus-level tutoring and staff development budgets and directed staff to provide campus-by-campus tutoring budgets and staff-development spending for the past two years.

The board also reviewed the debt service fund, which will include recent bond sale payments. The district sold approximately $43 million in bonds on June 4; McDowell said debt-service expenditures will rise accordingly and the district expects to remain near a $15 million debt-service fund balance after bond proceeds and payments are accounted for.

On the food-service fund, the district projected roughly $5.2 million in both revenues and expenditures for 2026. McDowell said the district participates in federal reimbursement programs and has worked to avoid an excessive fund balance, which state rules discourage for food-service operations.

The board opened and closed a public hearing on the budget before moving to adopt the budget and compensation plan. The motion to approve the FY2026 budget and compensation plan was made by Trustee Sharpie and passed unanimously, 7-0.

The district plans to bring an amended budget back to the board at its September meeting after TEA releases certified values and finalized House Bill 2 calculations.