Questions linger for families and employees of the El Paso Independent School District as its leaders deal with an unprecedented financial crisis discovered just weeks before summer break.
EPISD expects to end the current school year with a $52.8 million deficit, which will erode much of the district’s savings, and likely eliminate an estimated 410 jobs, some of which will be through layoffs, to address a $42 million budget gap for the 2026-27 school year.
EPISD has over 7,400 employees and 3,500 teachers, according to a Texas Education Agency staffing report.
Superintendent Brian Lusk, who was hired in December, estimated the cuts – including through attrition and eliminating vacant positions – would eliminate about 10% of the district’s staff.
The EPISD board will meet at 8 a.m. Tuesday to outline its plan, and at 5 p.m. Thursday to vote on whether to declare financial exigency — a rare move that allows the district to break employee contracts, much like a bankruptcy filing in the private sector.
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Here are some answers to the frequently asked questions El Paso Matters has received about EPISD’s financial situation:
What caused the deficits and how was it only discovered at the end of the school year?
In June 2025, the EPISD board adopted a $547 million budget with expenses that exceeded its revenue by $6 million. The budget was developed by then-Superintendent Diana Sayavedra, who resigned earlier that month after losing support from the majority of the school board.
At the time, the district expected about 1,000 fewer students over the previous year, but enrollment actually declined by almost 1,900. District officials were aware of the actual decline by Oct. 1, 2025, but didn’t adjust its budget to account for the millions of dollars in lost state revenue the decline would trigger, auditors have said.
District leaders, including Lusk and the school board, said they did not know about the financial issues until early May, and did not discover the extent of the deficit until an outside auditor reviewed the budget later in the month.
District leaders said there were instances where the district spent money on expenses that were not included in the budget, including savings account distributions, changes in special education staffing and employee buyouts, totaling $11.2 million.
Auditors also found EPISD spends more on its employees’ salaries than most other districts, with 87% to 89% of its budget going to payroll, while the state average is 83%. About $22 million of the district’s $52 million deficit went towards payroll.
Will those affected by the layoffs get unemployment benefits?
Public school employees who lose their jobs due to layoffs may qualify for unemployment insurance under Texas law. Eligibility is determined on a case-by-case basis by the Texas Workforce Commission.
School employees who retire or resign may not qualify for unemployment insurance.
EPISD employees’ contracts usually run through the fiscal year, which started July 1, 2025, and will end June 30, 2026.
Why doesn’t EPISD just sell its vacant schools?
EPISD has closed several schools over the years due to consolidations from the 2016 bond project and declining enrollment.
As of December 2025, EPISD had 13 underutilized or vacant surplus properties, including Alta Vista, Beall, Burleson, Crosby, Alamo, Fannin and Mitzi Bond elementary schools.
That same month, the EPISD school board approved the sale of Mitzi Bond Elementary School for $900,000 to El Paso businessman Edward Houghton V. The property was assessed to be worth $6.2 million by the El Paso Central Appraisal District. Some of the other properties were assessed to be worth between $3 million and $5.5 million.
Most of these properties have been on sale for a while now, but the district has not attracted many buyers interested in buying an old school.
EPISD’s real estate sales contracts include restrictions that prevent buyers from using the property to open a K-12 school. This means most buyers will likely have to demolish school buildings or renovate them before the property can be used for other purposes.
Even if the district could sell its unneeded property, it wouldn’t be a consistent source of revenue, meaning cuts would still need to be made down the line.
Did keeping Lamar Elementary School open cause the deficit?
Lamar Elementary School was among the list of 10 schools initially recommended for closure under Sayavedra’s plan to address declining enrollment.
The school board in place at the time voted to close eight schools, including Lamar Elementary, under the initiative, which was dubbed Destination District Redesign.
After a change in the board makeup, trustees voted in May 2025 to reverse the decision to close Lamar Elementary, citing its high performance as a reason to keep it open, even though it had low enrollment.
While closing the school would have saved the district some money on utilities and maintenance, it would not be enough to have a significant impact on the deficit.
It cost the district about $2.6 million to run Lamar Elementary in 2024, according to a Destination District Redesign presentation given that year. About $2.4 million of that went toward employee salaries.
Since the district did not lay off employees displaced by the closures, closing Lamar would have only saved the district about $200,000 a year.
Why doesn’t EPISD cut high-paying administrative positions?
Before EPISD officials discovered the enlarged deficit, the district was already working on eliminating vacant administrative positions and had offered a $3,000 buyout to central office employees who gave early notice of their plan to retire or resign.
Under Lusk’s financial exigency plan, the district plans to eliminate an additional 160 central office positions, which will save the district $11 million a year, and 250 campus-level positions, which will save $17 million a year.
EPISD has 14 assistant, associate or deputy superintendents who, during the 2025-26 school year, costs the district a combined $2.2 million.
Lusk makes a base salary of $360,000 a year.
Was EPISD’s crisis caused by a lack of state funding?
While state funding problems were not the primary cause of EPISD’s financial issues, limited increases in school funding over several years did not help.
Texas’ basic student allotment, which is used to calculate public school funding based on enrollment, was $6,160 per student for six years, between 2019 and 2024.
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While state lawmakers last year raised the basic allotment to $6,215 per student, many public education advocates said it was not enough to keep up with inflation.
Some school districts, including EPISD, also will receive less funding from the state than initially expected. That’s because the state miscalculated how much funding it would give schools to make up for the loss of property tax revenue after Texas voters approved increased tax breaks for homeowners.
This has put EPISD and many Texas school districts in a tight financial spot with no room for mistakes.
The post 6 things to know: How EPISD is handling a financial crisis appeared first on El Paso Matters.
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