By Edmond Ortiz
The North East Independent School District board voted 5-1 June 18 to adopt a budget featuring a lingering deficit, another drop in student enrollment, no raises for employees, and a warning that even tougher fiscal choices lie ahead.
Adjusting to enrollment issues
The newly adopted budget contains $825.4 million in total expenses, a reduction from the $1.07 billion total spending budget that NEISD trustees approved for the 2025-2026 school year.
The 2026-2027 academic year will see a decrease in the general fund operational budget for expenses, from $625.9 million in 2025-26 to $614.2 million. The district will spend $6.7 million less on instruction, a move attributed to further student enrollment decline.
NEISD enrolled 53,600 pupils in 2025-2026; that number is forecast to barely clear 51,000 in 2026-27.
While the local teachers’ union sought a pay raise, employees will have to go with only a 1% retention supplement that will be paid this fall.
Another 1% retention supplement is promised next spring if student enrollment exceeds projections by more than 750 students this fall. The supplement will cost $4.1 million. An additional stipend is to be given to impacted staff to help transition to fewer workdays.
North East ISD projects a drop in general fund revenue from $584,176 in 25-26 to $563,737 in the upcoming academic year, resulting in a projected $50.5 million general fund shortfall. Officials are also projecting a reduction in local property tax revenues from $374.5 million last year to $336 million.
Newly elected board member Mike Wulczyn cast the lone dissenting vote on the budget.
Tax rate cut
The district is maintaining the interest and sinking, or debt service, portion of its total tax rate at 30 cents per $100 valuation. But the district is also decreasing the maintenance and operation segment of the tax rate from 70.07 cents per $100 valuation to 67.54 cents in order to keep NEISD under the state-mandated cap on M&O property taxes.
The total annual property tax bill on the average NEISD home, valued at $380,600, is expected to decrease from $2,324 to $2,289. District officials expect the state to make up the difference in the lower tax rate, as decreased property values are offset by the state’s funding formula.
NEISD officials said uncertainty remains on how Educational Savings Accounts, or vouchers, will affect their struggle with enrollment figures. Rising levels of taxpayers protesting their property valuations contribute to uncertainty surrounding efforts to raise revenue, too.
While no raises are in store for NEISD employees, the district is working to ensure no increases in employees’ health care insurance premiums.
NEISD is finishing 2025-26 with a little more than three months worth of reserve operational funds. That number, district Chief Financial Officer Susie Lackorn said in a June 15 budget workshop, could dip below three months towards the end of 2026-27.
If NEISD ends up with an enrollment of 51,000 or lower, and if no other factors improve, the district could still conclude the next school year with a $25 million shortfall. Even offering open enrollment in NEISD may not be enough to improve their finances, district officials have said.
“(2.8 months of reserves) isn’t something to panic over, but we’d have to make very hard, tough decisions for (2027-2028) to put us back on a better path,” Lackorn added.
