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Waco ISD projects roughly $6.7M drawdown as trustees review proposed 2025–26 budget
Summary
Chief Financial Officer Cheryl Davis told the board that enrollment and ADA declines, shifts in local homestead exemptions and federal grant changes leave the district projecting about a $6.7 million net decrease in its general fund balance ahead of the Aug. 14 proposed budget and tax-rate presentation.
Waco ISD officials told the board on July 22 that the school district expects to present a proposed budget on Aug. 14 that would leave the general fund balance roughly $6.7 million lower than the current beginning balance.
"So right now, we are projecting revenues of a $162,300,000," Chief Financial Officer Cheryl Davis said during a wide-ranging budget briefing. Davis said the district is budgeting approximately $169,300,000 in appropriations and that a combination of operating transfers and other sources would not fully offset that gap, leaving a material net change in fund balance.
Davis laid out the drivers behind the projected shortfall: a projected enrollment decline from this year, which reduces ADA-based state funding; a roughly $2.7 million drop in tax revenue tied to higher homestead and over‑65 exemptions; and the winding down of ESSER carryover and other federal supports. She said state legislative changes will add roughly $7.3 million in targeted funds—much of it earmarked for special education and other designated allotments—partially offsetting ADA losses.
On expenditures, Davis pointed to payroll and benefits as the largest cost drivers. The proposed budget includes a locally funded portion of salary increases beyond state allotments and a 2% pay increase built into the spending plan for many employee groups. Davis also reviewed programmatic pressures—special education, bilingual services and career and technical education (CTE) costs have grown faster than the revenue streams that support them.
Davis described employee health‑plan performance and a roughly 9% projected increase in some employee premium contributions driven largely by pharmacy claims and stop‑loss thresholds. She said some premiums would be absorbed entirely by the district for high‑deductible plan enrollees.
The district will publish the official proposed tax rate and budget documents after the Aug. 14 presentation and hold the required public notice and hearings before adoption, Davis said."I'll see you on the 14th," she told trustees, signaling the next important step in the budget calendar.
