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Midway ISD finance chief outlines funding formula, projects deficits and potential state relief
Summary
District finance staff explained Texas school-funding mechanics, projected a roughly $2.1 million deficit for the current year and a potential $6.7 million shortfall next year under current law, and described how proposed state changes could reduce the gap.
District finance staff and administrators gave the board a detailed overview of Texas school finance, showed how Midway ISD's funding is calculated, and presented budget projections and staffing considerations for the current and next fiscal years.
Assistant superintendent/finance lead Wesley (presenting as the district's finance officer) explained the two primary tax buckets that fund schools in Texas: maintenance and operations (M&O) for day-to-day costs and interest and sinking (I&S) for long-term debt service. He described tiered M&O funding including Tier 1 entitlement and Tier 2 golden and copper pennies, noting Midway ISD has eight golden pennies and that the basic allotment and weighted student counts (WADA) drive tier 1 entitlement.
Wesley presented numeric examples: Midway's Tier 1 entitlement is roughly $70 million, with about $50 million expected from local taxes and approximately $20 million from state aid under current conditions (about a 70/30 mix). He emphasized that increases in local property values can reduce state share and, for some districts, can trigger recapture. He explained that I&S revenues are separate and not subject to recapture.
On the district's fiscal outlook, finance staff reported an adopted deficit of $2.4 million for the current fiscal year and a projected finish closer to $2.1 million; for fiscal year 2026, the district's preliminary projection—assuming no additional state funding, modest 2% salary increases, and no change in WADA—shows a possible $6.7 million deficit. Administrators noted a proposed state package referred to as —house bill model— (referred to in the meeting as Hospital 2) could provide approximately $3.7 million in additional state aid for Midway ISD as currently modeled, narrowing the projected shortfall.
Human-resources and compensation staff (Ashley) reviewed TASB market analyses and said the district remains competitive for early-career teachers but trails the local market in mid-career ranges. Ashley presented a targeted stipend proposal intended to address hard-to-fill areas: raise secondary math and science stipends to $3,000, foreign-language stipends to $2,500 (market median), and increase the high-needs special education stipend to $4,000 (already increased in the current year). Administration estimated the immediate stipend package would cost roughly $250,000 and said about 110 to 160 teachers could be affected depending on final eligibility criteria; administrators recommended those stipend increases now while awaiting legislative outcomes.
Board members discussed advocacy options and urged constituent contact with state legislators to raise the basic allotment. One trustee said increasing the basic allotment in Austin is crucial to afford larger salary increases locally.
Administration said it will update the board on legislative outcomes and bring firm compensation recommendations when state-level figures are finalized; the next budget-review updates will appear at the May and June meetings ahead of budget adoption and tax-rate decisions.
