Houston Independent School District officials are proposing a $2 billion budget for the 2026-27 school year that includes staff reductions, while recommending pay increases for employees across the district.
The preliminary budget projects roughly $2.04 billion in revenue against comparable expenditures, while maintaining an estimated $730 million fund balance.
The reserve exceeds the Texas Education Agency’s recommended $518 million, the amount needed to sustain normal operations for three months without additional revenue, according to HISD’s budget documents.
Two years into the state’s intervention, HISD had faced a $520 million deficit. But now, HISD officials say the deficit can be overcome.
“A balanced budget would be huge, especially after overcoming a $520 million deficit in the second year of the intervention,” Superintendent Mike Miles said.
The proposed budget will be voted on by the HISD Board of Managers on June 11.
Enrollment projections and central office staffing
While the school district is proposing a salary increase, HISD is also projecting a reduction of approximately 205 central office positions, from 7,260 to 7,055, on the staffing side.
The largest reductions are planned in facilities and operations (down 71 positions), finance (down 32), the Chief of Schools’ office (down 30), human resources (down 16), and academics (down 15).
The budget is built on a projected total enrollment of approximately 164,812 students, considering a decline of about 4,000 students from the year before.
Average daily attendance is expected to increase slightly, from 94.0% to 94.3%.
Pay raises for eligible employees
HISD administration is recommending a 4% general pay increase for eligible central office employees for the coming school year.
The district is also proposing to raise its minimum wage from $15 to $17 per hour, a move that would impact some ‘Facilities, Maintenance, and Operations’ staff, nutrition service attendants, bus driver trainees, and student interns.
District officials say the compensation increases are designed to address “rising cost-of-living pressures, supporting employee retention and maintaining strong instruction for students.”
“Our budget supports what matters most: strong instruction, better outcomes for students, and responsible use of taxpayer dollars,” Miles said. “We are making deliberate choices to protect classrooms, invest in teachers and principals, and maintain long-term financial stability.”
Teacher pay tied to performance
Teacher compensation will increase through the Teacher Excellence System (TES), HISD’s pay-for-performance framework, being used across the district. Under TES, certified teachers can earn between $70,000 and $101,000 annually based on classroom performance. The average teacher salary has risen from $68,000 in 2023 to $83,000 in 2026, per HISD documents.
According to budget workshop slides, the share of funding directed to instruction and instructional leadership has grown from 57% of the total budget in 2023 to 72% in 2026.
Health insurance
HISD is grappling with rising health insurance costs as well. Officials have proposed increasing the district’s contributions to employee healthcare by $4 million for the coming year.
No changes to employee health plan premiums are expected before January 2027.
However, employees enrolled in district health plans should anticipate premium increases taking effect at the start of the calendar year. The district is also streamlining its health plan offerings from 7 options to 4: Kelsey Select, Kelsey Basic, Nexus Basic, and Choice HDHP.
“A balanced budget would be huge, especially after overcoming a $520 million deficit in the second year of the intervention.”
Mike Miles, Houston ISD Superintendent
The open enrollment period is from Oct. 26 through Nov. 6, 2026.
Budget materials show that the school district’s health fund is projecting a net position deficit of approximately $14.8 million by the end of fiscal year 2027.
HISD is also considering other cost-cutting measures that officials project will save roughly $31 million.
Budget tied to board goals
The proposed spending plan is aligned with the board’s academic goals, which include raising the share of third-grade students meeting grade level in reading from 41% to 56% by 2028, and in math from 38% to 53% over the same period.
The school district is also targeting a jump in graduates earning both TSI (Texas Success Initiative) readiness and an industry-based certification, from 11% to 26% by 2027.
“This proposed budget is aligned to our goals, guiding principles, and built around improving outcomes for students and preparing them for a 2030-2035 world and workplace,” district officials wrote in budget materials presented to the board.
