Northeast ISD staff pay plan balances HB 2 requirements with district deficit, board told

NORTHEAST INDEPENDENT SCHOOL DISTRICT ' Finance leaders presented a compensation and budget forecast to the Board of Trustees that uses state HB 2 allotments to guarantee teacher pay increases and adds targeted raises for other employee groups while reserving some new revenue to reduce a projected deficit.

The presentation on compensation and related budget forecasts was led by Susie Lockhorn, executive director of finance and accounting, and framed by Mr. Villarreal and Superintendent Dr. Micah. Lockhorn told trustees the district is building a package that implements the statute's mandated payments for classroom teachers and uses additional state allotments to make targeted adjustments for other roles.

The proposal follows HB 2, which Lockhorn summarized as requiring a $2,500 payment for classroom teachers with three to four years of experience and $5,000 for teachers with five or more years of experience, and as providing other discretionary allotments the district can use for pay and basic costs. Lockhorn said the district projects roughly $19.6 million in state revenue that must be spent on raises and is recommending additional targeted increases for bus drivers, instructional assistants, custodians and police officers. She told trustees a 1 percent across-the-board raise would cost the general fund about $4.2 million.

Why it matters: The plan attempts to implement the teacher raises mandated by the Legislature while also using some of the new, discretionary revenue to address recruitment and retention pressures for nonteaching categories. Trustees repeatedly pressed staff on how the raises affect the district's projected fund balance and what is one-time versus ongoing.

Key details - Teacher raises required by HB 2: Lockhorn said classroom teachers meeting the statutory definition (teach more than four hours per day) will receive the $2,500 or $5,000 allotments depending on years of service. She noted some staff who are on the teacher pay scale (librarians, nurses, counselors, certain administrators) do not meet the statute's classroom-teacher definition and therefore are included in the compensation package using a midpoint adjustment rather than the $2,500/$5,000 allotment. - Targeted increases: Lockhorn presented recommended starting-pay increases for bus drivers, instructional assistants and other roles to address compression (where starting pay rises too close to incumbents). She said incumbents would receive smaller, but meaningful, increases to preserve pay spreads. - Benefits and fully loaded costs: Lockhorn emphasized the district is modeling fully loaded costs (salary plus retirement and Medicare/TRS costs) and will use available HB 2 revenue to cover benefits tied to required raises. - One-time retention supplement: The staff recommended an optional, one-time 1.5 percent retention supplement for employees who do not receive larger targeted increases; she estimated that would cost about $1.6 million and is not an ongoing commitment. - Fund balance and forecasts: Lockhorn's forecast showed the general fund improving relative to last year but still subject to enrollment and market uncertainty. Trustees and staff discussed the district's projected fund balance, noting TEA attention typically increases if a district dips below roughly two months of fund balance. Lockhorn said the forecast assumes no material change in staffing beyond normal adjustments; vacancies and other actions would alter the result.

Discussion points and concerns Trustees and staff questioned how the compensation package interacts with the district's deficit, the treatment of employees who do not qualify as classroom teachers under the statute, and the district's assumptions about other districts' actions. Lockhorn and others explained the district plans to phase scale adjustments using midpoint-based raises to avoid pay compression over time. Trustees also pressed on substitute availability, teacher assignments when substitutes are not available, and the legal limits on assigning classroom duties during a teacher's planning period.

Public comment and staff perspective During the meeting public speakers raised concerns about pay and retention. Theresa Hurd, a paraprofessional and vice president of the Northeast Education Association, appealed for higher starting pay and better retention incentives for bus drivers, food-service workers and paraprofessionals, noting 37 paraprofessional vacancies for the upcoming year. Patsy Esterline, president of Northeast AFT, asked trustees to remember categories HB 2 did not directly cover and urged the administration to include those employees in the district's compensation planning.

Process and next steps Staff said the board will see a formal budget next week and the district plans to adopt the formal budget on the scheduled adoption date. Lockhorn stressed that TEA rule-making will affect implementation details and that staff will revise models as agency guidance arrives.

Ending Trustees took no final action on the compensation package during the presentation; staff will return with the formal budget and a proposed compensation resolution during the district's adoption process. The board did approve routine personnel items that had been discussed in executive session by a 7-0 vote earlier in the meeting.