Get AI Briefings, Transcripts & Alerts on Local & National Government Meetings — Forever.
KIPP Texas forecasts FY26 deficit, cites fundraising shortfalls and SHARS impact; recommends retention incentives
Loading...
Summary
CFO Sun Han told the board KIPP Texas expects a fiscal‑year‑2026 operating gap of about $18 million under current assumptions, flagged a $1 million SHARS (Medicaid) shortfall and a likely lower fundraising result, and described a proposed $5 million COLA and $8.5 million retention incentive under discussion.
Sun Han, chief financial officer, told the KIPP Texas Board of Directors on April 24 that under current assumptions the draft fiscal‑year‑2026 operating budget contains an $18 million deficit and that the executive team is trying to reduce that to $15 million before final approval. Han said revenue gains in fiscal‑year‑2025 include an additional $4 million in Title funds but that revenue pressures include a $1 million loss from SHARS (Medicaid reimbursement) compliance issues and a projected $2 million fundraising shortfall.
Han described the fiscal‑year‑2025 EBITDA forecast of roughly $48 million and said the organization expects to exceed the budgeted enrollment and attendance targets for FY25; higher attendance has driven additional state revenue this year. He also said the organization has not drawn on the KIPP Texas Future Fund since 2019 and that favorable FY25 results may reduce planned support from that fund.
Board members and staff discussed drafts of the FY26 budget assumptions, including a conservative 0% state funding rate increase and the risk that a facilities funding bill (House bill referenced at the meeting) is not secured. Han said KIPP would need an approximate 6% state funding increase to eliminate the FY26 deficit under current assumptions.
The meeting also covered compensation and retention. Sun Han and Anne Scott (chief advancement officer and chief talent officer) described a package that includes a proposed $5 million cost‑of‑living adjustment (COLA) for SY26 and an $8.5 million retention incentive that would be paid next September if enrollment and attendance outturns hold; the retention incentive is a one‑time payment and the COLA would be incorporated into salary beginning July 1 if the board later approves the budget. Staff said the retention payout would require employees to sign a written commitment; leadership noted clawbacks are administratively difficult. The board did not take a formal vote on FY26 budget approval or the COLA/retention proposal at the April meeting; staff said they would return with final budget materials at the next meeting.
