Dr. Tamika Alford Stevens, Pasadena ISD chief financial officer, told the Board of Trustees on Tuesday that, under current law, the draft 2025–26 general fund budget shows a projected deficit of $29,600,000.

In a budget workshop presentation, Dr. Alford Stevens said the draft reflects known revenue and policy at this time and therefore does not include a salary increase. She also said the district plans to rely in part on $20 million of savings projected from staffing attrition and about $3 million from operational adjustments, while continuing to use reserves as needed to balance the budget before adoption.

The nut of the board presentation: the district faces structural gaps driven by declining enrollment, reductions in certain federal and state revenues and rising operating costs. Dr. Alford Stevens highlighted three revenue drivers — enrollment/average daily attendance, property values (including temporary ‘‘disaster pennies’’), and federal/state program funding — and said recent changes have reduced expected revenue compared with previous years.

Most of Dr. Alford Stevens’s examples were numeric. She showed the district’s 2024–25 budgeted totals as $534,717,728 in revenue and $543,425,063 in expenditures, a current-year deficit the district is still working to close. For 2025–26 she said the district’s modeling, under current law, yields the $29.6 million deficit figure if no additional actions are taken. "This budget does not include a salary increase at this time," she said.

She explained that county- and state-level adjustments to property-tax compression have reduced the district’s eligibility for disaster pennies. For the current year the district received 7.51 disaster pennies that generated about $12 million; under current projections the district would be eligible for roughly 3 disaster pennies in the coming year, and the proposed maintenance-and-operations rate shown in her modeling includes those 3 pennies.

Dr. Alford Stevens also flagged specific program mismatches between state allotments and local spending: the district received about $44.7 million in state special-education allotments for 2023–24 while spending more than $80 million on special education; transportation state allotments were roughly $3 million while local spending reached about $17–20 million in that year; and school-safety requirements are growing while state funding remains limited. She said changes in the Student Health and Related Services (SHARS) federal program have reduced reimbursable revenue for services the district continues to provide.

On legislative proposals, Dr. Alford Stevens summarized the then-current school finance negotiations around House Bill 2 and related measures. She said the negotiated finance package (as of the board meeting) included a $55 increase to the basic allotment, a new fixed-cost allotment of $106 per enrolled student and new teacher- and support-staff retention allotments with required uses and reporting. Under the models she described, teachers in districts with more than 5,000 students could receive state-funded increases of $2,500 for teachers with three to four years of experience and $5,500 for teachers with five or more years of experience, and the new support-staff retention allotment would allocate roughly $45 per eligible staff member. She cautioned that language and effective dates were not final and that some major changes (for example, the move to an intensity-of-service model for special education) were delayed until the 2026–27 school year in the draft bill.

Board members asked clarifying questions. Superintendent Dr. Lopez asked whether the district would be eligible for as many disaster pennies for Hurricane Beryl (Burrow) as for the earlier tornado; Dr. Alford Stevens said the amount would be lower. Trustees also asked about whether transportation increases meant buying additional buses; Dr. Alford Stevens said the immediate pressure is day‑to‑day operating costs (fuel, repairs), not an immediate fleet expansion.

Next steps the CFO outlined: the district is running revenue-impact models based on recently released legislative revenue estimates and will return to the board with updated modeling and recommendations as soon as bill text is signed and clarified. "We will need to have another budget workshop," she said, to compare legally required compensation pass-throughs with board decisions about nonrequired uses. The board must adopt balanced budgets for the general fund, child nutrition and debt service by July 1.

Discussion versus decision: the meeting session was a workshop and produced no formal vote on the draft budget; the board instead directed staff to continue modeling under pending legislation and to present updated figures at a follow-up workshop before final adoption.

The board adjourned the workshop portion of the meeting and reconvened later for other business.