The district’s deficit is smaller than other large Texas districts, including Cypress-Fairbanks ISD with an $80 million deficit, Dallas ISD with a $104 million deficit, and Austin ISD with a $60 million shortfall. HISD’s budget approval follows a shorter public budget process, with fewer workshops than in years past.
HISD expects a nearly 4% decrease in general fund revenue compared with the 2025-26 budgeted revenue, and a nearly 5% decrease in general fund expenditures compared to 2025-26 budgeted expenditures. It plans to use nearly $791,000 of the fund balance to support the upcoming year, according to the board agenda.
The district passed a tax rate of $0.8421 per $100 of assessed value, though this rate can change after the Texas Education Agency calculates a maximum maintenance and operations tax rate — part of a school district’s overall tax rate — in August, according to the board agenda.
The upcoming tax rate is a decrease from last fiscal year’s $0.8783, but that rate was higher due to the district adopting a natural disaster-related tax rate increase to pull in about $50 million in revenue, according to recent budget presentations. While the median Houston home value increased over the last year by about $3,500, the district estimates the property tax bill for the median home value will drop from $2,608 to $2,530.
HISD will wrap its current fiscal year in five days after two budget amendments in February and earlier in June. The amendments show how far the district landed from its initial adopted budget. Through the two amendments, HISD adopted a $28 million decrease in revenue and $12.5 million decrease in expenditures.
HISD officials estimated earlier in June that nearly 63,400 students will attend campuses in its New Education System reform model and it plans to allocate $8,459 per student on average. It plans to allocate $2,194 less to students outside NES, or an average of $6,265 per student.
HISD also changed its school funding formula for next school year, so that campuses outside NES consider teacher salaries separately in calculations. The formula change is part of the new compensation system, which pays teachers according to their evaluation ratings, rather than years of experience or subject taught.
As part of its expansion into AI, the district will invest an additional $4.5 million into nine “Future 2” schools that will follow a revamped instructional model to prepare students for a world where artificial intelligence “will be ubiquitous.”
But that investment in those schools comes after HISD closed at least 12 campuses and expects to lose $3.8 million as it seeks to outsource operations at several schools, according to previous budget assumptions.