Lancaster Independent School District trustees unanimously adopted the district's 2025–26 proposed budget and set a combined tax rate of $1.2244 per $100 of taxable value after a public hearing and discussion Aug. 30 at the Lancaster Administration Building.

Shaw Moseley, presenting the budget on behalf of district staff, said the board is being asked to adopt a proposed general operating, child nutrition and debt service budget that projects $78,065,712 in total revenue and a total expenditure request of $87,891,897, “which is an impact to the fund balance of $9,826,185.” Moseley said the revenue projection assumes passage of a 2025 homestead exemption measure by voters on Nov. 4, 2025.

The district also approved a final amendment to the 2024–25 budget to align ledger codes and updated revenue and expenditure projections. Finance staff presented the amendment as a revenue reduction of about $3.2 million and an adjusted amended expenditure budget of $87,007,838. The board voted to approve the amendment unanimously.

The adopted 2025–26 budget retains a maintenance and operations (M&O) tax rate of 0.7869 and an interest and sinking (I&S) debt-service rate of 0.4375, for a combined rate of 1.2244 per $100 of taxable value. Trustee Carolyn Ann Morris moved the tax-rate motion, which was seconded by Trustee Queenie Nichols; the motion carried unanimously.

Moseley described several factors driving budget pressure: declining student enrollment (Lancaster ISD enrollment is down about 4.2%, roughly 200 students, since 2019), rising costs for benefits and insurance, increased TRS (Teacher Retirement System) employer costs tied to salary changes, transportation fuel costs (presented as rising from about $3.01 to roughly $5.85 per gallon since 2019), and state-mandated campus armed security requirements that the 89th Texas Legislature did not fully fund. Moseley said the legislature raised the basic allotment by roughly $50.55 per pupil in the most recent session but that the state’s increases do not fully cover local cost pressures.

Board members asked about enrollment and retention strategies and student services. Trustee (Mister) Jones asked whether the district has active recruiting measures; Dr. Pereira responded that the district is “constantly recruiting kids” and noted regional competition with nearby districts and charter schools. Trustee Cortez pressed for details about social-work coding on the budget slides; Moseley said coding changes moved some expenditures from function 31 to function 32 and that the district will budget for social-work services in the coming year.

The board heard a presentation about child nutrition after the district became eligible for the Community Eligibility Provision (CEP), which provides free breakfast and lunch districtwide. Moseley said the district received a one-time withheld fund distribution of approximately $8,000,000 in 2024; the 2025 child nutrition projection lists $115,000 in local a la carte revenue, $5,695,000 in projected federal meal claim revenue and total child nutrition expenditures of $6,792,579. Moseley explained the child nutrition budget contains a required “spend-down” plan to reduce the large fund balance created by the withheld funds, including purchases such as vehicles and cafeteria upgrades.

Board members also discussed debt service and a planned presentation about a possible bond prepayment (defeasement) scheduled for Sept. 3. Moseley said budget documents include a projection to prepay $13,000,300 of existing bonds in 2025–26 if the board approves the transaction; the presentation noted that prepaying that principal could reduce projected future interest costs by $4,818,668. Moseley said the board will need separate approval for any defeasement and that the prepayment was included in the budget only as a contingent line item.

On the consent/action agenda the board approved three related items unanimously: the final amended 2024–25 budget, adoption of the 2025–26 proposed budget, and adoption of the 2025 tax rate. Voting was conducted via board devices; Trustee Cortez experienced a device issue and gave a verbal “yes” that was recorded by the board secretary.

Why it matters: The adopted budget and tax rate set the district’s funding framework for operations, employee compensation and debt service for the coming school year. Trustees and district staff highlighted a sustained enrollment dip and statewide funding pressures that will constrain options and likely require further difficult budget decisions next year.

Votes at a glance

• Final amended 2024–25 Lancaster ISD budget (action item 6.1): Motion to approve the final amended fiscal 2024–25 Lancaster ISD budget as presented. Mover: Mister Smith. Second: Miss Nichols. Outcome: Approved unanimously.

• Adopt 2025–26 proposed budget (action item 6.2): Motion to adopt the 2025–26 proposed general operating, child nutrition and debt-service budgets. Mover: Miss Cortez. Second: Mister Smith. Outcome: Approved unanimously.

• Adopt 2025 proposed tax rate (action item 6.3): Motion to adopt a total tax rate of 1.2244 per $100 of taxable value (M&O 0.7869; I&S 0.4375). Mover: Carolyn Ann Morris (board secretary). Second: Queenie Nichols (vice president). Outcome: Approved unanimously.

Next steps: District staff will proceed with implementing the adopted budget and will present a separate defeasement/prepayment proposal on Sept. 3 for board consideration. The board noted the district will continue recruiting and marketing efforts to address enrollment declines and will monitor next year’s budget pressures closely.