College Station ISD trustees weigh options to cover projected 2025–26 shortfall

College Station ISD trustees and district staff on Feb. 18 discussed options to address a projected 2025–26 budget deficit, focusing on preserving the district’s fund balance while avoiding cuts that would directly affect students and classrooms.

District staff told trustees the district’s current total fund balance is $43,905,000, of which about $38.05 million is unassigned and $3.9 million is committed, roughly three months of operating expenditures. Staff said auditors recommend a fund balance of three to six months and that district finance leaders would prefer five to six months.

The discussion came as trustees and staff reviewed early scenarios for the district’s shift to a July 1 fiscal year (a 10‑month first budget period), which staff said will temporarily create additional year‑end fund balance even if the district runs a structural shortfall on a 12‑month basis. Staff said a 12‑month budget built from current assumptions would show about a $5 million deficit unless changes or new revenue materialize.

Why it matters: trustees cautioned against reducing the fund balance so far that general operations or bond ratings are jeopardized. “One of our requirements be that we not dip into the fund balance so much that it…puts us in a creates problems as far as having operating capital,” a trustee said during the workshop.

Key figures and pressures discussed - District fund balance: $43,905,000 total; roughly $38.05 million unassigned; $3.9 million committed (staff figures). - Budget composition: staff reported roughly 84% of the district’s expenditures are personnel costs. - Recent cost increases since Feb. 2019 cited by staff: fuel up 49%; insurance up 392%; utilities up 16%; employee compensation up 26.6%. - State funding and per‑pupil estimates: staff said the district receives about $150 million from the state, roughly $10,400 per student on average based on an enrollment of about 14,300 students; staff said that a shift to funding by enrollment rather than attendance could be worth about $2.3 million to the district, but that change would require billions more state spending. - Programmatic cost pressures: staff said the district spends about $1.6 million more for special education than the state funds for those services and roughly $4.1 million more in transportation costs than state funding covers.

Options trustees and staff discussed - Class‑size and staffing models: staff asked whether trustees would consider modestly increasing some class‑size targets (examples given: shifting some third‑ and fourth‑grade targets from 22:1 to 24:1, or secondary ratios from 25:1 toward 27:1) and using attrition rather than layoffs to realize savings. Staff projected an illustrative saving of about $700,000 from not replacing roughly 10 teacher positions, but emphasized that any staffing changes would affect class sizes and programs. - Hiring/attrition approach: staff said departments are using zero‑based budgeting so each department starts from zero and justifies requested spending. Trustees and staff noted that because personnel are the largest cost driver, meaningful reductions would likely come from staff reductions or not filling positions, which in turn affects class sizes and program capacity. - Out‑of‑district transfers and enrollment strategies: staff said out‑of‑district transfer policies and possible targeted transfers could be considered for school year 2026–27 to grow enrollment revenue; staff said this was not planned for 2025–26 but could be an option in later years and would not include district transportation. - Insurance and benefits: staff said the district is rebidding health insurance and is anticipating roughly a 10% premium increase; trustees discussed tradeoffs between salary increases and benefit cost‑sharing changes. - One‑time use of fund balance: trustees and staff discussed using some of the temporary gain created by the shortened first fiscal year to blunt the immediate deficit while pursuing multi‑year solutions. Staff warned that using one‑time fund balance without recurring structural changes would only delay the shortfall and could leave the district below recommended reserve levels after two years.

Policy and legislative context Staff repeatedly noted that the state budget picture remains uncertain midway through the legislative session. Trustees and staff discussed potential impacts from Senate Bill 2 (a bill under legislative consideration) and proposals tied to vouchers or Education Savings Accounts; staff said if a voucher program were enacted it could reduce district revenues materially. Staff also noted that many proposals in the legislature would not immediately raise districts’ basic allotment without additional appropriations.

Next steps District staff said they will run multiple budget scenarios for trustees and return with preliminary numbers at upcoming meetings, aiming to provide scenario results by the March or April meetings and the final 2025–26 budget for approval in June. Staff said scenarios will include class‑size adjustments, targeted staffing scenarios, insurance rebid results, and longer‑term enrollment scenarios for 2026–27.

Trustees and staff emphasized they want to avoid sudden, large reductions to classroom programs and teachers but acknowledged that some combination of limited fund balance use, modest cuts and continued state advocacy will likely be necessary if state funding does not change.