CFISD budget update: deficit narrowed to ~$33.7M; board approves refunding bonds
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Summary
CFO Karen Smith told the Cypress‑Fairbanks ISD Board that one‑time audits and interest income reduced the district's projected 2025–26 deficit from $45.5M to about $33.7M; the board also authorized issuance of unlimited tax refunding bonds, Series 2026A.
Cypress‑Fairbanks ISD finance staff told the board on March 2 that the district's previously adopted $45.5 million deficit projection for the 2025–26 general fund has been reduced by a combination of audit adjustments, interest income and other items to an estimated $33.7 million shortfall at year end.
CFO Karen Smith outlined components affecting revenue and expenditures: state aid changes driven by House Bill 2 produced model estimates that increased district revenue (CFISD’s estimated HB2 gain noted as about $62,600,000, with approximately $23.5 million of that classified as flexible to address the deficit); multiple property value and freeze audits yielded unbudgeted revenues; interest income was stronger than anticipated; and the district continues to watch federal SHARS (school health and related services) reimbursements and appeals that could reduce funding. Smith stressed that some gains were one‑time and should be treated conservatively when projecting future budgets.
Smith also said ongoing enrollment declines (roughly 2,000 fewer projected students for 26‑27) and a drop in charge funding result in permanent revenue pressure. Payroll remains the largest expenditure (presented as about 89.26% of general fund expenditures for 25‑26), and administration has already removed unfilled positions from the budget to account for vacancy assumptions (current planned fill rate discussed at 96%).
Following the budget presentation, the board voted to approve an order authorizing issuance of Cypress‑Fairbanks ISD unlimited tax refunding bonds, Series 2026A, as presented.
Administration said it will return with additional budget updates (next update in April) and will present preliminary 2026‑27 projections for board discussion in May, and the final budget adoption is scheduled for June. Trustees asked for continued transparency about one‑time vs ongoing revenues and for community outreach about the district’s fiscal position.
Ending: Karen Smith will provide another update in April and a special budget workshop is scheduled for May 21; final budget adoption is expected in June.