As it falls deeper into a financial crisis, the Ysleta Independent School District is looking to deplete its savings next fiscal year while relying primarily on employee buyouts and attrition – rather than layoffs or a declaration of financial exigency – to begin digging itself out of a widening hole.
Ysleta ISD is looking at a projected $15 million deficit in its proposed $379 million general fund budget for the next fiscal year, leaving just over $1 million in its savings, known as fund balance. It doesn’t include any salary increases or bonuses for employees.
“This is a very risky gamble, to draw down your fund balance to almost nothing,” said Manny Soto, a longtime school administrator who is now director of data for the Council for Regional Economic Expansion and Educational Development, an El Paso nonprofit that works to improve public education. “It’s just not good finances, and if you miss anything – anything at all – you may have to have the state bail you out.”
Chief Financial Officer Lynly Cambern will present the proposed budget to the school board during a workshop Monday evening. The board has to adopt a budget before June 30.
Superintendent Xavier De La Torre said that the district is looking to call for a tax ratification election in November that would create additional revenue if approved by voters, and is also planning to provide incentives as early as December for teachers to voluntarily leave the district when their contracts end next school year. For now, the district has a freeze on outside hires, and is instead filling vacancies with current employees already on the payroll.
Additionally, the district will consolidate its two alternative schools, closing down César Chávez Academy and keeping Thrive Academy open. The district also has a $50 million property portfolio on the market, De La Torre said, adding that one “bundle” could potentially generate $25 million in one-time funding for the district.
“I’ll be the first one to tell you, I’ve always said hope is not a strategy,” De La Torre told El Paso Matters on Monday morning. “This time it’s a strategy. But I think it’s a well mapped-out strategy, but I would be dishonest if I didn’t tell you that a reduction in force is impossible.”
De La Torre said that a reduction in force may be necessary for the 2027-28 school year and would like to begin notifying teachers and other staff of the possibility as early as January or February.
He said that he doesn’t foresee having to declare financial exigency – a measure recently adopted by the neighboring El Paso Independent School District Board of Trustees that allows service and teacher contracts to be broken at any time.
However, he did say layoffs could likely happen by not renewing teacher contracts.
“Do we have too many adults in the system? Probably,” De La Torre said.
The district has about 2,250 teachers and just over 32,000 students.
The district is expecting to lose 1,250 students in the coming school year – a 3.8% decrease that’s worked into the proposed budget. That’s in line with the decline the past several years, though slightly lower than the 4.1% decrease it saw in the 2025-26 school year.
SEE ALSO: Ysleta ISD leaders warn tough budget decisions ahead amid shrinking fund balance
This year is the first year that parents will be able to use education savings accounts, or vouchers, to pay for private school or homeschooling for their children. That creates additional risks for enrollment decline for public schools. De La Torre acknowledged that potential loss, saying it adds another group of students for which public school districts like YISD have to compete.
Earlier this year, YISD offered a $7,500 separation or early resignation incentive for teachers. About 100 teachers took the incentive, De La Torre said.
Under the proposed budget, instruction costs are expected to decrease just over 5%, though operation costs such as utilities are expected to increase nearly 10%, district documents show.
Ysleta ISD is also looking at about $70 million in debt service for deferred maintenance.
Separately on Wednesday, the board will consider $65 million maintenance tax notes – a form of debt that doesn’t require voter approval repaid by the district pledging a portion of its future property tax revenue – to address deferred maintenance. The money, to be repaid over 15 years, would be used toward roofs, air conditioning, heating, electrical systems and structural issues, as well as for gym bleachers, sports fields and turf, among others.
READ MORE: Ysleta ISD eyes tax ratification election as enrollment declines, future layoffs possible
YISD in November will take a voter approval tax ratification election, or VATRE, to district voters that if approved would shift property tax revenue from debt repayments to operations and bring in about $6 million in additional revenue a year.
The board has until Aug. 17 to vote whether to put the measure on the November ballot. Neighboring Socorro ISD is also considering a voter approval tax rate election after voters narrowly rejected the measure last year.
De La Torre said YISD’s financial pressures mirror those seen across El Paso and throughout Texas, where schools are grappling with policies such as private school vouchers, growing property tax exemptions and per-student state funding that has grown far below the rate of inflation.
He also pointed to the “hold harmless” formula implemented by the state that was to make up for budget shortfalls created with the increased homestead exemption approved by voters last year. The state miscalculated the way it would make up for that lost revenue, which De La Torre said cost YISD about $11 million.
“I like to say, ‘Same storm, different ships,’ right? By ships, I mean school districts, primarily traditional school districts, are all being faced with delicate budgets that we have to consider, and when I say same storm, it’s something that isn’t exclusive to the El Paso area, it’s not exclusive to Texas,” De La Torre said.
CREEED’s Soto, who was a top YISD administrator for nearly 30 years, agrees. He also points to vouchers, falling enrollment due to declining birth rates and other factors for contributing to public schools’ budget challenges.
But, Soto maintains there’s more that school districts, including Ysleta, could have done to prevent some of their financial hardships, calling nearly zeroing out a fund balance “irresponsible.”
He said that included more closely watching birth rates and enrollment trends and considering school closures sooner.
Soto also noted that when it comes to school boards voting against recommendations from school CFOs and superintendents, as was the case in Ysleta ISD last year, school leadership could have taken an unpopular step.
“The superintendent can call the (education) commissioner and ask them to review the matter and help,” Soto said. “Now, that doesn’t put the superintendent in good light with the board, but they could make that call. … I mean, the board, they’re a powerful entity, but they don’t have 100% of the power.”
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