CFISD projects $50.1 million operating shortfall; superintendent presses legislators for homestead-exemption funding

CYPRESS-FAIRBANKS ISD projected a $50,100,000 shortfall for the 2025–26 general operating budget and told trustees the district will need to pursue state funding options to avoid deeper cuts.

Superintendent Doctor Killian and Chief Financial Officer Karen Smith presented the operating-budget update during the board’s May 5 meeting, citing declines in enrollment and average daily attendance, tax-rate compression and the district’s local optional homestead exemption as primary drivers of lower revenue. “It is estimated without any additional funding that we will have a deficit of 50,100,000.0 in 20 25, 20 26,” Karen Smith said during the presentation.

The nut graf: the projected deficit, if not offset by state legislative action or local adjustments, would reduce the district’s ability to maintain current staff levels, programs and competitive pay. Administrators and trustees focused their remarks on three levers that could change the picture: (1) pending state legislation and supplemental appropriations, (2) use of fund balance as a multiyear bridge and (3) targeted local decisions to hold or reduce nonessential spending.

Administrators provided supporting details and context. Smith said CFISD’s preliminary 2025 certified property values reported by the appraisal district are roughly $76.7 billion (preliminary as of April 30) and noted that the district’s offer of a local optional homestead exemption reduced M&O property tax revenue by an estimated $63,000,000 in tax year 2024. The district’s average daily attendance was reported at about 93.56 percent (down from pre-pandemic levels), which Smith said translates to an almost $15,000,000 swing in state funding. Smith also described that payroll accounts for roughly 85–90 percent of general-fund expenditures and that teacher salaries are a major part of fixed costs.

Doctor Killian described a multi-pronged advocacy campaign in Austin designed to secure partial state funding for districts that offer a local homestead exemption. He said staff drafted amendment language for House Bill 2 that would have funded the LOHE at 60 percent and that district representatives, students and local legislators pressed for inclusion during floor activity. “Representative Scofield entertained an idea of mine to get an amendment on House Bill 2,” Killian said, and he described meetings with staffers in both the lieutenant governor’s and the governor’s offices to explore alternative vehicles, including the supplemental House Bill 500 and a staggered, second-year effective date to limit fiscal impact to the state budget.

Trustees and district officials emphasized the limits of available funding. Karen Smith showed comparative charts indicating CFISD receives less revenue per pupil than neighboring districts and explained that bond and food-service funds are restricted and cannot be used to backfill general operations. Trustees said they want clearer answers on efficiency and where cuts would fall if state aid does not materialize. Trustee Julie Heinemann urged the district to commission a “deep efficiency audit” and recommended that community members submit specific questions about perceived waste so staff can respond with data.

Administrators and board members also detailed contingency planning. Smith projected that, using planned reductions and one-time resources, the district would have about 4.94 months of fund balance at June 30, 2026, and roughly 4.43 months at June 30, 2027, under current-law assumptions (no raises included). The board scheduled a special called budget workshop for May 22, 2025, to review priorities and next steps if additional state funding does not appear.

The presentation also summarized personnel-related programs tied to funding: staff reported 1,048 teachers had earned a teacher-designation under the Teacher Incentive Allotment and that roughly 1,094 teachers would receive state payments when amounts are finalized; administrators said decisions on raises were not yet included in the draft budget because the legislature had not adopted final school finance levels.

Ending: Trustees urged parents and community members to contact state legislators while the session remains open. District officials said they would provide updated fiscal scenarios at the May 22 budget workshop and that any major staffing or program changes would be brought to future public board meetings for action.