During the March 26 budget workshop, Trustees continued discussions on the 2026–27 budget, reviewing how prior reductions, updated financial results and future revenue options are shaping the district’s next phase of financial planning.

District leaders also reiterated the broader challenge facing school districts across Texas: the state’s basic allotment — the primary driver of per-student funding — has not been significantly adjusted since 2019, even as inflation has increased costs for salaries, utilities, transportation and campus operations.

Meeting Agenda
Meeting Recording

Key points from the workshop

  • Budget reductions already identified have met the previous target: Reductions implemented entering 2025–26, combined with additional reductions already identified for 2026–27, have brought the developing budget to the Board’s previously established 1.5% deficit target.
  • No salary adjustment is included at this time: The current planning model does not include a pay increase. Compensation discussions are expected to continue as the budget becomes more defined.
  • Recommendation to adjust the budget target: Based on stronger current-year financial results and a five-year comparison of budgeted versus end-of-year outcomes, LISD administration recommended adjusting the deficit target from 1.5% to 3%.
  • Year-end projections remain conservative: While this adjustment would increase the adopted deficit at the start of the year, district leaders noted that historically conservative budgeting has typically resulted in district finishing closer to a balanced budget by year end.
  • Future-year caution remains important: Trustees also discussed the need to look beyond 2026–27 when evaluating ongoing commitments such as salary increases. While current-year financial results are improving, LISD administration emphasized the importance of ensuring that any recurring expense can be sustained in future years, particularly as state funding remains uncertain and long-term operating costs continue to rise.
  • Healthy reserves remain the goal: District administrators emphasized that once the fund balance reaches a healthy level, the goal is not to continue building large reserves year after year, but to use available revenue to support needed staffing, programs and student services.

The discussion also included future options to increase ongoing yearly revenue streams, as this is the most viable path to potential salary increases. One avenue reviewed was the possibility of a Voter-Approval Tax Rate Election (VATRE) in Fall 2026, which could allow the district to access the remaining 3 cents on the maintenance and operations (M&O) tax rate, which funds day-to-day expenses such as staff compensation, utilities and student services. If pursued, the Board would consider calling such an election in August for a November ballot.

Facilities & Bond Outlook Also Reviewed

Trustees also reviewed the district’s interest and sinking (I&S) tax rate, which is used to fund voter-approved bond projects and long-term facility needs.

This discussion comes as the district’s Citizens’ Facility Advisory Committee (CFAC) is actively evaluating current campus conditions, future facility needs and long-range modernization priorities. The community-led process is intended to help shape what a future bond recommendation could look like before any package is brought to the Board for consideration.

Trustees also reviewed current bond capacity forecasts and the long-term outlook for future bond elections. Based on current projections, future bond elections may require an increase to the I&S tax rate to maintain adequate capacity for campus modernizations, life-cycle replacements, safety improvements and other critical facility needs.

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