Edcouch-Elsa Independent School District trustees received a detailed briefing June 7 on how recent state school finance changes and local enrollment trends affect the district’s 2025–26 budget.

Sylvia Garza, a consultant engaged by the district to assist with budget preparation, told trustees that House Bill 2 — signed June 4, 2025 — includes multiple allotments and mandates that will affect district finances. Garza said the bill raises the basic allotment by $55 per student, establishes a $106-per-student basic-cost allotment, and creates a support-staff retention allotment of $45 per average daily attendance (ADA) for eligible non-teaching positions. Garza said HB2 also requires uniform pay increases for classroom teachers in districts with enrollment under 5,000: teachers with three to four years’ experience must be paid $4,000, and teachers with five or more years’ experience must be paid $8,000 (the bill provides no mandated increases for teachers with zero to two years’ experience).

Garza presented district projections that estimate a $3.3 million increase in revenue under the new law; she said approximately $1.8 million of that increase must be used for compensation (teachers and eligible staff) and roughly $1.3 million will be tied to specific allotments and therefore is not fully unrestricted. Garza warned that to receive the maximum available funding tied to some allotments the district may need to be at its maximum compressed tax rate; the tax rate itself is adopted later in the budget calendar (the district has until September to adopt a tax rate).

Garza also reviewed internal accounting and grant-management issues that reduced available cash during the current year. She told the board that a journal entry posting the maturity of a certificate of deposit had previously inflated interest revenue by about $8 million and was corrected; there were missed indirect-cost claims on federal grants, unclaimed drawdowns for a UTRGV Head Start childcare grant and a mental-health intern grant (about $200,000), and teacher-incentive allotment payments were not properly budgeted for the 2024–25 year (one pending payment cited was $124,739). She also identified the lack of checks and balances for substitute-pay (“sub hub”) payments, which she said amount to roughly $1.2 million and should be tied to specific employee absences.

Garza recommended conservative assumptions while TEA (Texas Education Agency) finance templates are completed and certified values are received from the appraisal district in July. She said the district’s current ADA used in modeling is 3,706 (the consultant’s model used 3,841), and staff will adjust assumptions when final values and attendance numbers are available. Garza presented a budget-to-budget comparison that currently projects a $3,396,355 deficit for 2025–26 under the preliminary assumptions, and she outlined cost-saving measures that contributed roughly $1,060,183 in projected savings from resignations and retirements as well as other potential savings through hiring freezes, attrition, staffing reviews and a planned consolidation study.

Trustees asked about timing, the district’s tax-rate options and whether the district could allocate additional local dollars to cover staff not explicitly covered by HB2. Board members emphasized that any permanent pay increases must be budgeted as recurring salary costs and that the board will monitor the district’s projections as state and TEA data arrive. Garza said she will update the board when TEA’s summary-of-finance template and certified property values are available.

No budget adoption vote was taken at the meeting; the presentation was informational and staff said a formal budget will be brought to the board for approval in June.