Spring ISD leaders outline budget gap, fund balance and one‑time “disaster pennies” option

Dr. Lupita Hinojosa, superintendent of Spring Independent School District, opened the special called session on Feb. 18 by asking trustees for an interactive budget discussion as the district develops its 2025–26 budget.

The immediate picture: Miss Westbrooks, staff member, told the board that the district began the 2024–25 cycle with about a $13 million structural deficit after previous reductions and that administration has eliminated roughly $22 million of prior shortfalls over two budget cycles. The district’s audited fund balance was presented at just under 30 percent of expenditures — roughly $102 million — which staff described as a one‑time resource and not a long‑term solution for recurring shortfalls.

Why it matters: Fund balance is used to manage timing differences and emergencies; staff said the district’s target is roughly three months of operating reserves. Trustees were also told the district must balance competing priorities: teacher retention and vacancies, special‑education pressures, rising property insurance premiums and possible revenue declines tied to lower income‑verification direct certification numbers.

One‑time revenue option: staff discussed the tax code mechanism often called “disaster pennies,” which allows a board resolution to levy additional property tax pennies as a one‑time increase after a declared disaster. Miss Westbrooks said the district could levy up to five pennies; she estimated that five pennies would generate about $20 million in local and state revenue for one year. The district used the same mechanism after Hurricane Harvey and previously levied three pennies, which generated about $6 million, she said.

Other budget drivers discussed - Property insurance has risen substantially; staff presented a multi‑year trend showing property insurance near a 75 percent increase over roughly four years, with premiums rising from about $2.8 million (2019) to roughly $4.1 million (2020–21) and higher amounts afterward. - Teacher vacancies and contracted services: the administration said a roughly 30 percent teacher turnover rate increases total costs because many vacancies are filled with higher‑cost contractors. A national average replacement cost cited during the session was about $16,450 per teacher. - Economically disadvantaged coding: staff warned that direct‑certification protections that ran during the pandemic have expired, so many families must now complete income verification forms; the district reported an 8 percentage‑point drop in its economically disadvantaged rate, which could equate to a loss of about 2,700 weighted students and affect state funding and accountability classifications. Administration reported a 95 percent income‑verification completion rate after a final push; about 1,700 students did not submit forms.

What trustees asked and directed - Trustees asked whether the district should levy disaster pennies and how community notification would work; staff said no election is required under the relevant tax code and that the board would adopt a resolution if it chose to proceed. Trustees requested more detail on how different penny levies would affect the 2025–26 budget. - A trustee asked the administration to avoid further staff cuts when possible and to move quickly on strategies to stabilize staffing while the budget process continues.

Ending - Staff asked trustees to continue the dialogue and scheduled a follow‑up budget session in March. Administration indicated any use of fund balance would be strategic and that fund balance levels have direct implications for credit ratings and borrowing costs.