The Cypress-Fairbanks ISD board of trustees is exploring all options — including a voter-approved tax rate election — after learning last week that they’re facing a $74 million budget deficit for the next school year.
Superintendent Doug Killian emphasized that the district is in decent shape for the current school year and he’s not seeking to immediately cut staff or eliminate the district’s 20 percent homestead exemption for residents 65 and older. However, it was clear in an April 13 board meeting that the leaders of the third-largest school district in Texas aren’t impressed with the funding that’s come from the state in the past two legislative sessions.
“To be transparent, we need to look at everything we can possibly do,” Killian said. “We are creeping back up to a significant deficit. We may have to look at everything again, including right-sizing the district. You’re hearing about it all over the state with schools being closed or programs being eliminated or reductions in staff.”
“I am not advocating for an end to the [homestead exemption] but it’s putting us behind the eight ball right now because the state’s not funding it,” he said. “I don’t think we can guarantee that the state will fund it next year either.”
The amount that CFISD projects to lose from senior homestead exemptions — $72 million — almost matches the overall budget deficit projected for the 2027-28 school year. Board member Justin Ray said trustees need to advocate for more state funding. “If we don’t get any sizeable relief, we’re going to do one of two things: draw extremely deep into our fund balance, and that is unsustainable, or we’re looking at some pretty good cuts,” he said.
Texas Education Agency Commissioner Mike Morath has the option, by state statute, of covering half of the funds lost by the homestead exemption, but he declined to do so last year and the year before, Killian said. “I don’t hold out a lot of hope that he will spend that money [on CFISD],” Killian said. “I think he will just buy more staff members for TEA. Sorry, but that’s what I’ve seen in my career.”
Trustees were asked last week to submit their budget priorities by Thursday, April 23, and a workshop is set for May 21. The board has until June 30 to adopt a budget for a fiscal year beginning July 1.
Chief Financial Officer Karen Smith said recent drops in enrollment, which exceeded projections, will cost CFISD about $27.5 million next year. The enrollment decline cost the district $13 million this year, as 3,200 students left for various reasons, including switching to charter schools and private schools.
Costs, including everything from textbooks to fuel for buses, have risen 24 percent since 2019, Smith said, adding that some families who are concerned about immigration enforcement have returned to their home countries or are homeschooling their kids. The birthrate has declined, and fewer families with school-age kids are moving into the district, Smith added. Districts are also getting less money from the School Health and Related Services program, which provides federal Medicaid reimbursement for certain health services given to students with disabilities.
Board president Julie Hinaman pointed out that charter schools are fully funded by the state and can sell bonds without voter approval. Private schools can raise tuition to deal with inflation, she said.
“Many school districts are closing schools, cutting staff and cutting programs, so the fact that we’re not talking about any of that — we’re talking about how we maintain the good work that we’re doing now and continuing to seek ways to possibly increase our revenue — that’s where you hear that we’re feeling good that we’re not in a terrible place but we’re also trying to be conscious about what’s coming,” Hinaman said.
Cy-Fair American Federation of Teachers president Nikki Cowart said the union surveyed district employees and found that their top three requests — more respect for lunch breaks and planning time, support for behavioral incidents, and transparency — don’t cost a thing.
“While many, if not all, Texas public school districts are forced to make hard decisions due to extreme underfunding, all we ask is that transparency remain at the forefront of every Cy-Fair decision,” Cowart said. “Our community felt kicked in the gut when bus routes were eliminated and librarians were reassigned. If there are to be cuts to either programs or positions, employees and parents need to know as soon as possible.”
“As you prioritize budget items, know that our union will always push for equitable pay and for our lowest-paid, hardest-working paraprofessionals to be paid a living wage,” she added.
Hinaman said about 89 percent of the CFISD budget is related to payroll. “That’s really where we see the greatest challenge,” she said. “Any increase or changes we make there have a very large impact on the budget. Any cuts or reductions in anything other than that area have very small impacts, and that’s our challenge.”
Some have argued that Gov. Greg Abbott’s school voucher program is taking money directly out of public schools and giving it away to parents whose kids were already enrolled in, and can therefore afford to attend, private schools. Killian pointed out that families selected for the voucher program are getting $10,000 per child, while public school districts get about $6,000 per child from the state.
And charter schools are cropping up frequently within the Cypress-Fairbanks ISD boundaries, Hinaman said.
“That will continue to degrade our enrollment as these other educational organizations come into our community without any approval from our local stakeholders,” she said. “That’s something we can talk to our state legislators about. If there’s a decline in enrollment across the state, why would you continue to add campuses, especially ones that are 100 percent funded by the state? That just doesn’t make sense.”
Cy-Fair ISD was once considered a “destination district,” where people moved for the schools. Trustees Lesley Guilmart and Kendra Camarena have said that’s why they moved their families to the area.
In addition to more school options, lower birth rates and mobility — people moving into and out of a district — have contributed to recent enrollment declines in Texas school districts, according to a study released this month by Rice University’s Kinder Institute for Urban Research. According to the report, “Despite population growth in the Houston [Metropolitan Statistical Area], the number of children born in the region has remained stagnant and the population is aging. Districts with more charter schools in their boundaries enroll fewer kindergarten students than expected.”
Another recent Kinder Institute study found that Aldine and Houston ISDs have shuttered 23 schools in the last three years. Researcher Courtney Thrash, a Kinder Institute researcher, did not include Cy-Fair ISD in the study but found that many districts across the Houston region have had to adapt to changing circumstances, which can mean fewer options for students.
“That can look different in each school but it could mean fewer choices in career and technical education programs, fewer electives and fine arts opportunities or having to travel farther to get to school,” she said.
Cy-Fair hasn’t shut down schools yet, which increases the financial burden of continuing to run bus routes, pay teachers and have supplies on hand even though there are fewer students and less state funding.
More than 274,000 families applied for Texas’ new school choice program. It shouldn’t drastically change the enrollment numbers of a single district, especially because most of the applicants did not have children already enrolled in public schools, but many pro-public education advocates have suggested that the $1 billion voucher program will likely translate to less funding for public schools.
The data also shows that many voucher applicants are hoping to send their kids to a private pre-K or kindergarten, meaning the child wasn’t previously enrolled in a public school because they weren’t enrolled in any school. More information will be available in June about which families will receive $10,000 vouchers to send their kids to private schools or homeschool.
Smith said she has a group chat with CFOs in other districts and everyone is concerned about the trend toward lower enrollment.
“If we don’t get any additional funding, and I’m not too hopeful, in the next legislative session, we are hearing that they are going to be looking at the unintended consequences of [state legislation] and doing some cleanup,” she said. “They want more taxpayer relief. I see more money going toward vouchers based on the demand they say they’ve seen. I am concerned about how much will be there for public education.”
Guilmart, the board vice president, said the district invests in what it values. “When I look at the decisions that our legislators, the majority of them, have made in recent history, I wonder how much they value public education,” she said.
She pointed out that there are elections in November, and although Cy-Fair ISD has to pass a budget before then, “who we send to Austin impacts our local funding.”
“The commissioner who is choosing not to refund 50 percent of our [tax exemption] money, he’s appointed by the governor,” she said. “Elections have consequences and I urge all voters to be mindful of that when casting their ballots this November. We as a community are going to have to dig deep and find out what our local options are to invest in what we value until we can compel our legislators to come along with us.”
The financial forecast comes just two months after CFISD was told by the Harris County Elections Office that they couldn’t call a $1.6 billion bond election for May because too many other elections were already planned during that time. A bond in November is possible but it could be a hard sell to squeeze more money out of taxpayers already struggling with affordability issues.
Killian emphasized that he didn’t want to scare parents and teachers with the financial forecast but wanted to be realistic.
“We’re not in a position where we’re going to do like Fort Bend has done and do a reduction in force,” he said. “We are in a pretty decent position. Yes, we are starting to go into fund balance, legitimately now. [Smith] did a great job of being the canary in the coal mine, saying, ‘This is coming.’ And it’s here. We need to be really mindful when we go through the budget process.”
