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Southwest ISD projects $3.2 million deficit for 2026–27; board previews compensation plan
Summary
District finance staff told trustees the proposed 2026–27 budget assumes $185 million in revenue and $188 million in expenses, leaving an estimated $3.2 million deficit; staff said the district will maintain a four-month fund balance and presented a phased strategic compensation plan beginning 2026–27.
Scott presented the district's July budget update and a preview of the compensation plan trustees will be asked to adopt in August.
Scott said the district is currently using certified property values and a 98% tax collection assumption to project roughly $185,000,000 in revenue for 2026–27 and about $188,000,000 in expenses, producing a projected $3,200,000 deficit. He said the district expects to close with a fund balance near $56,000,000, which equates to about four months of operating reserves as required by board policy.
Scott discussed the funding composition (the majority of revenue coming from the state) and noted a one-year state funding lag that requires the district to read a disclosure to trustees. He reviewed the child nutrition budget (about $19,000,000 in revenues and expenses) and debt-service projections tied to bond payments; he said the district is approaching the end of construction projects and expects bond payments to ease as projects conclude.
On compensation, Scott said 83% of the budget is compensation and the district plans to maintain the current salary structure for 2026–27 with limited exceptions. Specific changes previewed include moving some cafeteria managers and custodial holiday pay adjustments, adding a senior class stipend, and moving instructional paraprofessional pay from $95 to $100 per pay period. Scott said the district will implement "hold harmless" provisions for strategic compensation in year one for principals and will phase in expanded strategic compensation for teachers and other staff in subsequent years.
Scott noted a three-year long-range plan to monitor salary structures and health insurance costs and to look for additional revenue from legislative changes. He said the budget and tax-rate public notices and a budget hearing are scheduled in August, with a planned adoption later in the month.
The board did not adopt the budget at this meeting; trustees will be asked to approve the budget and tax rate in late August.
