The Ysleta Independent School District adopted a budget that spends more money than it takes in for a fourth year in a row, which would deplete much of the district’s reserves and leave it at the precipice of financial collapse.
The YISD school board voted 4-3 to approve a $420.2 million budget with a $22.2 million deficit for the coming school year.
Trustees Shane Haggerty, Chris Hernandez and Kathryn Lucero voted against the motion after attempting to include stipends for lower-paid hourly employees in its compensation plan. Trustees Cruz Ochoa, Mike Dwyer, Connie Woodruff and Carlos Bustillos voted in favor of the budget.
The board also voted unanimously to take out a $49 million loan to cover payroll expenses in August while it waits for scheduled payments to come in from the state. The district expects to pay the loan back in February. The repayment will cost the district $1.5 million in interest fees.
The district estimates it will end the 2025 fiscal year with $33 million in its reserves, down from $78 million at the end of the previous fiscal year.
With the adopted deficit in the 2025-26 budget, YISD’s reserves could drop to $10.8 million if it doesn’t cut expenses or generate additional revenue before the end of the next fiscal year. Any unexpected increase in expenses or decrease in revenues could consume all of the district’s reserves, essentially its savings account.
The current year’s deficit grew from $17.2 million when the budget was adopted by the board in June 2024 to an expected $49.7 million by the end of the fiscal year on July 31.
Without laying off employees or declaring financial exigency — the equivalent of bankruptcy for educational institutions — YISD will continue to have a budget deficit for the next two years before it can adopt a balanced budget, said the district’s chief financial officer, Lynly Cambern.
If the district’s reserves reach below zero or if it gets a failing grade in the Financial Integrity Rating System of Texas in two consecutive years, it risks being taken over by the Texas Education Agency, Cambern said. She said the district is likely to get a failing grade in the 2026-27 school year.
Despite the district’s dire budgetary situation, YISD Superintendent Xavier De La Torre said the district will make it through the next few years if the board follows his administration’s recommendations.
“If you follow our financial stability plan and adhere to it, we will not fail,” De La Torre said. “If we become reckless and cavalier about making these types of decisions and we do it repeatedly, then shame on us.”
The board also adopted a compensation plan that gives some employees a raise for the first time since 2022.
Under the approved compensation 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 House Bill 2, a public school funding bill recently approved by the Texas Legislature.
Teachers with less than three years of experience, nurses, librarians, counselors, principals and other staff will get a one-time $500 stipend, although they are not required under HB 2.
Support staff, including custodians, food service workers, bus drivers and security guards, will get a 1.5% raise.
The district initially expected to adopt a deficit of $44.5 million before making over $17.2 million in budget cuts, and before HB 2 was approved by the Legislature and signed by the governor.
Some of those cuts include eliminating vacant positions and offering a $5,000 incentive to the first 400 qualified employees who submitted their resignation notice early.
Cambern said 145 employees took the incentive, saving the district $9.8 million a year.Despite the expense reductions, the adopted budget is nearly 3% higher than the current school year’s $408.2 million budget, which was approved June 2024, primarily because of the raises funded under HB 2.
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