Northside ISD to publish Truth-in-Taxation notice; proposes flat tax rates and budget for FY26

Northside ISD officials on Aug. 12 presented proposed fiscal year 2025–26 budgets and a truth-in-taxation notice the district plans to publish this weekend, and scheduled a public hearing for Aug. 26 to consider adoption of the budgets and tax rates.

The district is proposing to keep the maintenance and operations (M&O) and interest and sinking (I&S) tax rates unchanged from the current year, district finance staff said. The proposed budgets reflect legislative changes in state funding, a district compensation plan and projected declines in attendance and taxable value driven largely by expanded homestead exemptions, officials said.

The budget presentation matters because it frames how the district will pay day-to-day operating costs, employee compensation and debt service for the coming year, and because Texas law requires a published notice and a public hearing before a board adopts final budgets and tax rates.

Megan Bradley, deputy superintendent for business and finance, walked trustees through the legally required notice that will be published in the local newspaper. Chris Grammer of CG Strategies, the district’s state-funding consultant, explained components of the notice, including the district’s no-new-revenue tax-rate calculations and comparisons to last year. Bradley told trustees the print notice will cost about $4,200 and must follow sizes and wording dictated by state law.

Officials said the proposed general fund budget includes an expected revenue increase of about $62 million compared with last year’s adopted budget while total expenditures are lower after prior-year reductions. The district plans to use an estimated $26.8 million of fund balance from an instructional-continuity designation; district staff said about $49 million remains in that instructional-continuity balance entering FY26. Payroll and related costs make up the bulk of the general fund: the presentation showed 87.9% of the general fund budget is personnel and benefits.

Bradley and staff said average daily attendance (ADA) — a driver of state funding — is budgeted at 91,500 students for FY26 (the district ended FY25 at about 91,574). officials noted they had introduced the district’s open-enrollment change that allows classroom teachers’ pre-K children to attend full-day pre-K without charge, which they hope will support enrollment.

Child Nutrition: The district’s child nutrition department proposed a balanced fund budget. Staff said 76 campuses participate in the federal Community Eligibility Provision (CEP), which provides free meals to every student on those campuses. Child Nutrition leaders also told the board they have held student-paid meal prices steady for nine years, and noted the Texas Department of Agriculture will cover the cost of reduced-price meals this year, meaning families whose students qualify for reduced-price meals will not pay at the register for FY26.

Debt and defeasance: Hilltop Securities financial advisor Michelle Aragon described the district’s use of cash defeasances — the prepayment of certain existing bonds — to produce debt-service savings and help manage the I&S tax rate. Aragon said the district has used cash defeasances repeatedly from 2019 through 2025, totaling about $435,050,000 in defeasance principal across those years. The district completed a defeasance for 2025 that she said totaled $100,490,000 and will eliminate certain 2015 series bonds; the transaction is expected to produce approximately $31,820,000 in debt-service savings. Aragon also outlined a planned defeasance in 2026 (approximately $84,360,000, final amounts and savings to be determined when bonds are selected).

Board members asked about recent legislative changes affecting homestead exemptions and state aid and how those interact with defeasance savings; Aragon and staff said defeasance can reduce long-term debt costs even if a portion of state aid is affected in later years. Officials said the district’s outstanding principal is approximately $2.44 billion (total outstanding principal reported by staff) and that final maturities on some long-term series extend decades into the future.

Next steps: Officials said the draft truth-in-taxation notice will be published this weekend in the San Antonio Express as required; the board will hold a public hearing Aug. 26, when administrators will present the FY26 budgets and request board action to adopt the budgets and tax rates. Staff said the district will post presentations and materials in BoardDocs and on the district’s public transparency pages.

Trustees and staff also discussed outreach and public education plans leading up to next year should the district later decide to pursue a voter-approval tax-rate (VATR) election tied to a bond measure; trustees stressed the need for clear, consistent messaging and for community meetings and HOA outreach. District staff said an efficiency audit and additional enrollment and campus-utilization reviews would be part of longer-range planning before any voter approval request.

Ending: The truth-in-taxation notice and the proposed FY26 budgets will be available to the public in the newspaper and online, and trustees will hear public comment and consider final adoption at the Aug. 26 board meeting.