Costs are rising for school districts across the state, and Waco ISD is no different. The district is facing a decline in revenue and enrollment, which budget planners are taking into account as they formalize plans for the 2025-26 school year.
Budget spending for the 2025-26 school year is projected to exceed the previous school year’s budget by about $690,000. Last year’s budget exceeded the adopted budget by about $6.3 million.
Waco ISD’s two main sources of revenue – local taxes and state funding – have increased 2.3% from 2020-24. But the district is also dealing with rising costs due to inflation. The district is predicting a decrease of $2.7 million in local tax revenue.
Waco ISD has seen a 12.7% decline in enrollment in the last 15 years. The majority of the decline has occurred in the last six years, Waco ISD Chief Financial Officer Sheryl Davis said during the Waco ISD Board of Trustees’ July 24 meeting.
Since 2019, the district’s enrollment has declined 10.3%. State funding is based on average daily attendance, so less enrollment means less funds. However, costs for various departments are increasing, including in transportation, special education, career and technology education, dyslexia services, and school safety.
“Our revenues certainly haven’t kept up with inflation,” Davis told the board. “So it’s something I hope for better. So we’re probably going to need to look at tightening our belts in some areas for sure.”
In addition to rising costs, Davis is concerned about possible cuts to Medicaid and SNAP.
“We know there’s Medicaid cuts, but we don’t know what they are,” Davis said. “But we get probably a million-and-a-half dollars through Medicaid funds.”
Waco ISD will present its proposed 2025-26 budget on Aug. 14 and hold a public meeting on Aug. 28 to discuss the budget. Here’s a look at some sections of the budget plan.
School safety
School safety spending has increased for the district. In 2023, the Texas Legislature passed House Bill 3, which required school districts to have an officer on each campus. The district has seen its expenditures for school safety double in the last five years.
For the 2025-26 school year, the district is projecting $3.6 million in spending for the school police department. Since the implementation of HB 3 in 2023, school safety spending has increased and outpaced revenue projections related to the line item.
In the upcoming school year, the district will receive about 26% in revenue of what they budgeted for school safety.
Teacher salaries
Waco ISD is proposing salary increases for teachers left out of the Texas Legislature’s salary allotment raises. Teachers with three or more years of experience saw increases in salaries through the retention allotment. The Legislature also provided funding for support staff. However, first-year teachers were left out of the retention allotment, and support staff saw a less than 1 percent increase in salaries.
First-year and second-year teachers will each receive a $1,500 salary increase. In addition, all other employees will receive 2% raises. State funding would have provided for an 0.8% increase for eligible employees, Davis said.
In addition, the employer contribution for health insurance will increase. The retention allotment did not cover benefits, including health insurance. From 2020-24, insurance costs have increased by 33.6%.
Career and technical education
For career and technical education, bilingual services and special education, the district is required to spend 55% of the money they receive for the programs.
The career and technical education program has grown exponentially. Since the 2018-19 school year, spending has increased by 63%.
In the past they have been able to use 45% of funds for other costs. Costs for CTE are growing faster than revenue the district receives.
“We spend way more than the 55%,” Davis said.
Special education and dyslexia services
Special education has had the largest growth, Davis said during the July board meeting.
In past years, the district was generating more money than it was spending. This year, the money the district received from the state and the budgeted spending are almost even.
With House Bill 2 going into effect this fall, school districts will receive additional funding for special education. They will receive $1,000 per assessment they conduct to evaluate kids with disabilities.
Despite more funding for the assessments, the district is budgeting $19.2 million in expenditures.
For dyslexia services, the district uses separate funding due to state designations. The expected cost for dyslexia services is about $2 million for the upcoming school year. Revenue is less than half of that at just under $1 million.
“And so we have to give the services, but the funding that we’re getting from the state is not funding services,” Davis said.
Transportation
Waco ISD outsourced its transportation to Goldstar Transit for 15 years before it took over the bus system, according to the Waco Tribune-Herald. Last academic school year was the first time the district was in control of the bus system.
The district receives around $800,000 from the state for transportation. For 2025-26, it is expecting about $600,000. However, the costs far exceed what they receive.
“It’s $4 million,” Davis said.
The impact of COVID and switching the bus system back to the district makes it more difficult to compare the rise in costs for transportation to previous year, Davis said. Transportation costs have increased by $500,000, she added.
Gifted and talented education
In 2019, House Bill 3 cut funding for the gifted and talented program, Davis told the board in the July board meeting. However, school districts had to continue funding the program.
After criticism over the cuts, the state funding was brought back at half the amount the district previously received, Davis added. Although enrollment in the program has decreased, costs are up in part due to teacher salary raises.
“You can see the revenue we’re getting doesn’t anywhere near fund the program,” Davis said.
