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Schertz‑Cibolo‑U City ISD projects roughly $14M shortfall; board weighs revenue, cuts and policy changes
Summary
District staff told the board they now expect an approximate $14 million deficit for FY 2026–27 driven by lower state aid and property‑tax changes; staff outlined options including local tax rate changes, enrollment initiatives and $12 million in potential expenditure reductions over two years.
Schertz‑Cibolo‑Universal City Independent School District staff told trustees that recent state policy and local revenue shifts have left the district facing a significant budget gap for the 2026–27 fiscal year.
"I am now projecting that the actual deficit will be closer to $14 million," Brian White said as he reviewed the updated revenue and expenditure forecast. Staff reported that the district lost roughly $4–4.5 million in property‑tax revenue while state hold‑harmless adjustments and other formula changes produced only about $700,000 in additional state aid instead of an anticipated $4.2 million.
White and other staff traced the shortfall mainly to the combined effects of changes enacted after House Bill 3 and two later property‑tax bills (Senate Bill 4 and Senate Bill 23), which increased homestead exemptions and altered frozen‑value calculations. White said those changes reduced the district’s taxable value and the expected state offset, and that some accounting‑timing items (for example, property‑tax audit settlements) cannot be relied on for the current year’s revenue recognition.
"This will take fund balance down to a little over $36 million and that triggers our target of 25% or 90 days," White said, noting the board’s policy CE(LOCAL). Staff said the projected drawdown would prompt a required strategy to restore the fund‑balance target and that rating‑agency effects are uncertain; staff will analyze the new rating‑matrix and report back.
Trustees and staff discussed three broad revenue paths: increase enrollment, secure legislative relief, or seek more local rate (Tier‑2 'pennies'). White provided updated estimates for collecting all 12 local pennies (roughly $16.5 million in local tax revenue increase if fully implemented) and noted Tier‑2 state revenue could grow from about $8 million to $14.3 million under that scenario.
On the expenditure side, staff reported some one‑time and recurring savings (insurer refunds, reductions in contract services and duplicate vehicle coverage) that should narrow the gap but not eliminate it. White said the district’s Operational Sustainability Committee has generated roughly 70 cost‑saving ideas across seven work groups that will be vetted in coming weeks.
Staff warned that, with no new revenue, a two‑year plan to reduce roughly $12 million in expenditures may be required. Trustees asked staff to prepare clearer comparison slides and legislative talking points; staff said they will return with further analysis and recommendations in May and a list of OSC recommendations in June.
The board directed staff to continue outreach and to present a draft amendment to policy CE(LOCAL) specifying actions triggered if the fund‑balance target falls below 25%.
