The Houston Independent School District unveiled a nearly $2 billion budget for fiscal year 2026-27, projecting a $55 million drop in revenue, $46.7 million in spending cuts, and a loss of an estimated 4,000 students.
This is HISD’s challenging budget outlook, all while pledging to push more dollars than ever directly into classrooms.
The Superintendent’s framing
Superintendent Mike Miles opened the budget presentation by emphasizing that “every dollar” in the budget is intended to move the school district toward Miles’ “2035 vision”.
“We’re operating in a constrained environment, yes, with declining enrollment and revenue pressures, but we are making deliberate choices to protect classrooms, invest in our teachers and principals, and maintain long-term financial stability,” Miles said.
In 2023, 57% of the budget went to instruction and instructional leadership. In the coming year, that figure reaches 72%.
Teacher salaries reflect the same trend, Miles added. Average pay has risen from about $65,000 in 2023 to a projected $83,000 next year, an increase of roughly $15,000 in three years.
Revenue
HISD’s general fund budget sits at approximately $2 billion, drawn from three sources, including local funding (primarily property taxes, a portion of which might be recaptured by the state: 74%), state funding tied to student enrollment and attendance (14%), and federal grants such as Title I and IDEA for special education (12%).
The school district is projecting an overall revenue decline of about $55 million for FY27.
One of the largest hits is the loss of disaster relief tax pennies, roughly $50 million in one-time revenue that will not be renewed.
A projected enrollment drop of 4,000 students is expected to cost another $50 million.
Partially offsetting these losses are a $27.5 million Teacher Incentive Allotment and $25 million in anticipated property sales.
Federal funding adds another layer of uncertainty.
Miles noted that the district has been shorted more than $21 million in Title funds mid-year, an aspect HISD had not budgeted for at the beginning of the school year.
Cutting and investing
On the expenditure side, the district plans to cut approximately $98 million while increasing spending by about $51 million in priority areas, resulting in a net decrease of roughly $46.75 million in total expenditures.
Central office cuts account for $35 million of those reductions. Twelve school consolidations save another $15 million.
Other cuts include $19 million in 1882 Partnership Schools, $29 million in NES (New Education System) decreases, $3 million in overtime and extra payments, $10 million in vacancies, and $6 million in one-time expenditures.
At the same time, the budget proposes new spending on the Future 2 Schools program ($4.5 million), Special Education improvements ($7 million), early childhood education ($4.25 million), health insurance ($4 million), and a $6 million raise for minimum-wage central office employees.
What’s next?
The district’s projected fund balance for FY27 is approximately $753.4 million, well above the TEA-recommended 90-day reserve threshold.
A second budget workshop is scheduled for May 20th, where the board will examine school-by-school and department-level budgets in detail.
“We’re operating in a constrained environment, yes, with declining enrollment and revenue pressures, but we are making deliberate choices to protect classrooms, invest in our teachers and principals, and maintain long-term financial stability.”
Mike Miles, Superintendent of Houston Independent School District
The board is set to vote on the final budget on June 11th.
“This is an iterative process,” Miles said. “Today is about ensuring alignment as we move forward towards a final adoption in June.”
A budget with grievances
Registered speakers at the budget workshop voiced their concerns.
Elected trustee Maria Benzison challenged how district dollars are being allocated.
“Every dollar in this district belongs to the children of Houston, not to consultants, not to signed contracts…to our kids,” she said, referencing a Texas Observer article that revealed that Miles has been moonlighting as a paid consultant earning $190,000 for Third Future Schools, the Colorado-based charter network he founded. “Our superintendent cannot serve two masters. Houston’s children should not be the ones who pay the price.”
Miles earns a base salary of $462,000, and received a bonus of $173,660 approved by the state-appointed board of managers in September.
Trustee Michael McDonough, who said he has built district budgets for two decades, raised a concern about the 4% cap on school budget increases.
“School budgets in HISD are a product of the number of students, their identifying characteristics, the associated weights, a unit allocation, and the campus attendance rate,” McDonough said. “Yet this year, campuses are subject to a 4% cap on budget increases over the prior year.”
He added that a school that earns a 5-7% increase, which could be by serving more high-need students, growing enrollment, and/or improving attendance, will still be limited to 4%.
“Regardless of how dutifully the campus leader approaches that work, there is an artificial cap on how many dollars they will get in the coming year. This cap is not a state requirement,” McDonough explained. “It’s a local decision, and in effect, it tells campus leaders, you did the work, you generated the funding, but you don’t get to keep it.”
