CFISD CFO warns of $67.4M 2026–27 deficit; trustees tentatively back one‑time stipend and health‑insurance increase

The CYPRESS‑FAIRBANKS INDEPENDENT SCHOOL DISTRICT Board of Trustees spent its May 21 special meeting reviewing detailed budget scenarios that, absent new revenue, would leave the district with a projected $67.4 million operating deficit for 2026–27 and risk depleting its operating fund balance below the board’s four‑month target.

Karen Smith, the district’s chief financial officer, said the preliminary 2026–27 general operating estimate starts from a $67.4 million shortfall that does not include any new raises or priorities the board might adopt. Her presentation used an enrollment base of 112,316 students and attributed a roughly $26.7 million decline in state funding to enrollment losses. Smith said the district currently projects about 4.29 months of operating fund balance at June 30, 2027 under the baseline assumptions — close to the board’s four‑month minimum.

Smith walked trustees through recurring‑cost scenarios for salary changes (examples: 1% teacher raise ≈ $5.1M; 1% for paraprofessionals/hourly ≈ $2M; increasing paraprofessional starting pay to $16/hour ≈ $10.8M; raising to $23/hour ≈ $82.5M) and non‑salary priorities such as reinstating librarians, elementary behavioral interventionists and additional counselors. She also presented three district health‑insurance contribution options designed to offset projected TRS ActiveCare premium increases: a $25/month option (≈$1.6M), a $70/month option (≈$5.2M) and a larger $113/month option (≈$9M).

Smith and Superintendent Dr. Killian reviewed the mechanics and estimated yield of remaining local enrichment pennies that would require voter approval (three golden pennies at roughly $16.6 million each plus nine copper pennies at roughly $6 million net each), showing homeowner impacts under different penny scenarios and noting that, even with the maximum 12 pennies, the district would still likely trail the Houston‑area average for state and local funding per pupil.

Trustees spent extensive time weighing tradeoffs between one‑time relief to employees and recurring raises. Several trustees and the superintendent warned that recurring increases without new recurring revenue would force deeper cuts in 2027–28. In the spreadsheet exercise that followed, a majority of trustees indicated support for including in the June budget proposal a one‑time recruitment/retention stipend (common entry: $500 per employee) and the mid‑level insurance option intended to offset projected TRS premium increases (district employee‑only contribution moved toward a $320/month pre‑discount minimum, roughly a $70/month increase for the district), while acknowledging those choices carry implementation risks.

Dr. Killian emphasized the urgency: without additional revenue, months in fund balance could fall below four in the following fiscal year, which would require substantial, painful cuts. Trustees directed administration to prepare the June budget materials reflecting the board’s selected priorities and the fiscal risks if a voter‑approved tax election fails or anticipated legislative changes do not materialize.

No formal budget vote occurred at the May 21 workshop; the board concluded by instructing staff to return a formal proposal for board consideration in June.