NEISD budget study: staff reductions, benefit tweaks proposed to close gap; 1% retention supplement recommended

NORTHEAST INDEPENDENT SCHOOL DISTRICT — District finance staff outlined sizable staffing adjustments, benefit changes and contingency parameters Tuesday as part of the second budget study session for the 2026–27 fiscal year.

Ms. Lackhorn, presenting the district's projected actuals, said NEISD is planning a combination of central-office reductions and school-level adjustments tied to a decline in enrollment. "We have a big change for 2627 coming in 43 positions, resulting in $2 million worth of savings," she said, and added that roughly 180 teaching positions are being adjusted as the district corrects for two years of enrollment shortfalls.

Why it matters: NEISD staff said lower property values and uncertain student counts 'including unknown effects from educational savings accounts (vouchers)'are reducing projected revenue. Staff warned that if enrollment does not rebound the district will need permanent changes beyond one-time measures.

To address the district's health-plan losses, Ms. Lackhorn recommended four plan changes that together would save about $11 million: removing GLP‑1 weight-loss coverage where not medically indicated ("we can save $5 million straight up by not covering GLP1s for weight loss"), increasing PPO maximum out‑of‑pocket by $1,000, raising the annual deductible by $500 and converting the low PPO option to an HMO‑style network (which the presenter said would "save the district $4 million"). With those changes she said the plan-year loss would fall from roughly $12 million to about $1.68 million.

Health‑plan context: Presenter data showed medical costs rising from $54 million to $57 million year over year and prescription costs from $28 million to $34 million, a total increase of about $8.5 million; the presentation said roughly 11,667 people are covered on district plans.

Employee pay and retention: In response to public comments from union and support‑staff representatives, staff recommended a one‑time 1% retention supplement to be paid in the fall (estimated cost close to $4.1 million) and proposed a contingency for a possible spring retention if enrollment or attendance exceeds specific triggers (staff noted an example threshold of 750 more students than the projection of 51,088 or an attendance increase of 1.5 percent).

Public comment: Nicole Dixon, speaking for Northeast AFT, introduced herself as the union's newly elected president and urged larger raises, saying, "Teacher pay has fallen further and further behind where it should be." Terresa Herd spoke for educational support professionals and asked the board for measures (a premium freeze, higher retention stipends, or paid professional development) so employees can "maintain a livelihood that allows them to continue serving this district."

Other items: Staff proposed refunding two months of dental premiums and lowering dental premiums by $4 per month after the district's dental reserve exceeded a year of expenses. The presenter also described small, one‑time campus requests (transportation for long‑travel UIL schedules, an external‑auditor fee increase for internal audit) and noted a large August 2027 principal payment on a qualified school construction bond.

Statutory/contract action: Ms. Lackhorn described an interlocal agreement with MetLife to provide a three‑year critical‑illness supplement for eligible retiring peace officers as required by House Bill 4144; that interlocal appeared on the consent agenda.

Votes and next steps: The board approved personnel decisions discussed in executive session earlier in the meeting (roll call recorded 6–0) and later approved the consent agenda item authorizing the interlocal agreement for the HB 4144 coverage (roll call recorded 5–0). Staff said a third budget study session is scheduled for June 15 and a formal public hearing to adopt the budget is scheduled for June 18.

What to watch: Staff emphasized uncertainty around vouchers and enrollment; the recommendation for one‑time retention and plan redesigns is contingent on projected actuals and further board direction. The district will present final budget proposals, any additional cuts or contingency uses and formal adoption steps at forthcoming meetings.