Bryan ISD officials say House Bill 2 leaves district with only modest net gain, funding questions remain

Bryan ISD finance staff updated the board on the district's budget development for the 2025'26 school year and described how House Bill 2, then on the governor's desk, changes state funding formulas.

The update, delivered by district staff, said the bill raises the basic allotment by $55 per ADA but also moves funding into targeted allotments and freezes other components of revenue. That combination reduces some discretionary funding and leaves the district with a much smaller net increase than headline numbers suggest.

District presenters said the bill creates a new basic cost allotment (referred to in materials as an "ABC allotment") that the district estimates at about $1.7 million and a teacher retention allotment that will appear as a pass-through. The teacher retention allotment is structured to pay classroom teachers $2,500 for 3'4 years of experience and $5,000 for teachers with five or more years; the district estimates the teacher allocation portion for Bryan ISD at about $4 million. Staff noted the teacher retention allotment covers salary only and not employer costs such as TRS (teacher retirement), Medicare or other benefits, which the district would need to absorb from the ABC allotment or other funds.

The presenters said technical formula changes reduce some early education funding for Bryan ISD by about $186,000 and that the legislature's decision to freeze the so-called 'golden penny' property tax factor for 2025'26 reduces projected revenue by about $384,000. After those and other adjustments, the roughly $629,000 gross increase from the per-ADA boost narrows to about $55,000 in net new revenue, the staff presentation said.

Board members asked whether the package would eliminate the district's operating deficit and were told it would not. Staff reviewed the district's current-year gap (described in the presentation as roughly a $6.2 million deficit carried from the previous year) and said they expect continuing pressure that will require position reviews, possible program consolidations, and other cost-savings measures. Staff recommended adopting a fiscal-year budget on current law and amending it later after TEA publishes final guidance and TEA's interpretation of terms such as "classroom teacher." Consultants from TASBO and TASB recommended adopting under current law to avoid committing to raises or allocations that might later conflict with TEA'issued definitions or guidance.

Staff also explained that some allotments in the bill are targeted (cannot be used for any purpose) while the basic allotment under current law is more discretionary. They warned that although the district may receive additional dollars earmarked for retention, limits on eligible staff (for example the teacher allotment applying only to classroom teachers) mean counselors, nurses and librarians may not be covered by the new teacher allotment unless TEA's final definitions include them.

The presentation reminded trustees that some items previously part of teacher salary schedules (counselors, librarians, nurses) appear excluded in the newly described teacher allotment and that the district is continuing to analyze vacancies via its Skyward position-control tool and to evaluate whether retention stipends may need to be reduced if new funding does not cover them.

Staff closed by reiterating the budget timeline and recommending adoption on current law with amendment authority later in the summer, and noted the governor still had time to sign or veto legislation at the time of the board briefing.

The update contained no board action; it was provided for information and questions.