Despite boosts in state funding approved by the Texas Legislature under House Bill 2, the El Paso Independent School District Board of Trustees adopted a budget with a deficit Tuesday – the second time in two years expenditures are expected to surpass revenues.
The board unanimously adopted a $541.2 million budget with a $6 million deficit for the 2025-26 school year. Trustees Daniel Call and Valerie Ganelon Beals were absent.
The board also unanimously approved a new compensation plan that would give EPISD employees a raise for the first time since 2022 – but will also increase how much employees pay toward their health insurance.
Under the plan, teachers with three to four years of experience will get a $2,500 raise and those with five or more years will get a $5,000 raise, which is required and funded under HB 2.
Teachers with less than three years of experience will also get a $1,000 raise, though it is not required under the bill.
The district will also give these raises to nurses, librarians and other employees listed under the teacher pay schedule. Additionally, EPISD will give staff a 1.5% general pay increase.
Employees will pay 15% more for their healthcare coverage, while the district will increase its health plan contribution by $5 million.
“We are in a position where we have a $6 million deficit. It is certainly the lowest deficit of the large districts here in town. Our fund balance is the healthiest,” board President Leah Hanany said. “That is a direct testament to you all looking every single day at what continuous efficiencies can be brought to people. I can share that we still need to continue to dig in and to communicate how we’re doing our best.”
The adopted budget is 2% higher than the current school year’s, which was approved June 2024.
As part of the budget plan, the district also plans to increase class sizes to 24 students per teacher for first through fourth grade and 25 students per teacher for fifth grade. A previous proposal included increasing kindergarten class sizes.
State law limited class sizes for prekindergarten through fourth grade to 22 students per teacher, unless a district requests an exemption. School districts must notify parents in writing if their child is attending a class with more than 22 students.
Trustee Mindy Sutton said she’s not comfortable increasing class sizes for first grade classes.
“I don’t necessarily like the idea of our district saving money and putting it on the back of kids and teachers,” Sutton said.
Hanany said the district may be able to put together a report in September to find out how increasing class sizes affects students and teachers.
EPISD previously estimated that it would have a much higher budget deficit before the Legislature and governor approved HB 2 and before the district made a series of budget cuts. Without HB 2, EPISD had estimated a budget deficit of about $22 million.
The district plans to close seven elementary schools in the next two years under a plan meant to improve the schools that remain open, known as Destination District Redesign — or DDR.
Without the closures or new funding, the deficit would have reached around $32 million.
EPISD said Tuesday it enacted a hiring freeze for central office positions and paused all non-essential travel as a way to cut expenses.
The district did not reveal how much this will save, but noted it has eliminated 215 positions over the last three school years, saving $9 million a year.
EPISD estimates it will have enough funds in its reserves to keep the district running for just under 67 days at the end of the 2025 fiscal year.
Interim Superintendent and Chief Financial Officer Martha Aguirre last week said the Texas Education Agency recommends school districts have anywhere from 60 to 90 days’ worth of reserves. The Financial Integrity Rating System of Texas requires districts to have enough funds in their reserves to operate for 75 days to get an A rating.
Tuesday marked the first meeting without Diana Sayavedra, the former superintendent who retired under a voluntary separation June 3. Her last day with the district was June 15. She’s now on an emeritus status through January 2026. Aguirre was appointed as interim.
The board on Tuesday voted unanimously to issue a request for qualifications for a superintendent search firm and for staff to report to the board in an August meeting.
EPISD evaluating attendance exemption
One way the district is looking to generate more revenue is by changing its attendance policy to encourage students to show up to class every day.
The board voted unanimously to have Aguirre evaluate the implications of removing the policy that exempts EPISD students from needing to attend 90% of their classes to get credit, which is usually required under state law.
Currently, under EPISD’s District of Innovation plan, students are allowed to miss more than 10% of their classes and still get credit as long as they get passing grades.
Hanany said teachers have expressed dissatisfaction with its absenteeism rates.
“If you’re a teacher, you know that, when students are not in the class, a lot of additional hardships are presented… More important than that is when students are not in the class, they are not learning,” Hanany said.
The District of Innovation initiative is intended to give traditional public schools some of the same flexibility as charter schools, and exempts them from certain state requirements.
Hanany said EPISD’s District of Innovation plan is set to expire at the end of the 2026 fiscal year.
At the end of the 2021-22 school year, EPISD had the highest chronic absenteeism rate in the county — which is characterized by the number of students who miss at least 10% of class, or about 18 days a year.
“We lose millions of dollars every year to unexcused absences alone as a district. This is something to do with state policy, and that’s how our school district is funded,” Trustee Jack Loveridge said. “This has an effect on learning. Every day that is missed is an opportunity that is missed to be absorbing information and growing as a student. So, this really is something that can help in a two-fold way, a financial and an academic component.”
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