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HISD projects near-balanced 2026–27 budget while warning of revenue risks
Summary
Superintendent Miles told the HISD board the draft 2026–27 budget would be roughly balanced with an estimated $751 million fund balance and $2 billion in general-fund revenue, but staff warned of risks from enrollment decline, recapture and federal funding shifts.
Superintendent Miles presented the Houston Independent School District’s draft 2026–27 budget at a board workshop on April 23, saying the administration had made deliberate choices to protect classrooms and prioritize instruction while navigating declining enrollment and revenue pressures. “Every dollar must support instruction, accelerate achievement, and move us to our 2035 vision,” Miles said in opening remarks.
Miles said the district expects roughly $2 billion in general-fund revenue for FY27 and projected a beginning fund balance of $748 million with a year-end estimate near $751 million if current assumptions hold. The presentation attributed the district’s improved outlook to tightened central-office spending and earlier budget priorities that, officials say, avoided a previously forecast “cliff” once ESSER pandemic relief funds ended.
The administration outlined key assumptions and risks: a projected $55 million net decrease in revenue driven by one-time disaster-penny proceeds not repeating and possible federal funding reductions; a planned $46.7 million reduction in expenditures through central-office cuts, vacancy savings and one-time cuts; and continuing enrollment decline that reduces state funding. Miles cited a financial forecast prepared in prior years showing a steep drop when ESSER ended and said recent measures have stabilised the fund-balance trajectory.
Board members pressed administration officials on specific items. One member asked about a $6 million increase for hourly central-office employees; Miles said the adjustment aims to retain and fairly compensate essential hourly staff during an inflationary period. On funding mechanics, Miles clarified the difference between enrollment and average daily attendance (ADA), noting that ADA can materially change state entitlement calculations.
Miles described changes to the school budget formula, including ending the COVID-era “hold harmless” practice that previously froze allocations despite enrollment shifts. The district will allocate base funding multiplied by enrollment and ADA, add state-aligned weights for special populations and a new $500 academic-need weight for NES and special-focus schools. Under a pay-for-performance salary model, principals will receive an average salary-per-teacher estimate for budgeting and the district will true up actual compensation after evaluations.
Officials identified outstanding uncertainties: further enrollment losses (the administration said a drop of 2,000 students would be “a huge hit”), potential midyear federal policy changes, and the timing/realization of property sales the district is counting on. Miles said the budget remains draft and that detailed school-by-school budgets and department budgets will be posted for public review before the board considers final adoption in June.
The board recessed to a closed executive session later in the evening; no adoption vote was taken. The board’s next budget workshop is scheduled for May 20, and the next regular meeting is May 14.
