The El Paso Independent School District is clawing its way back to financial stability after adopting a budget with a much lower deficit than previously estimated Tuesday – just weeks after declaring financial exigency.
The EPISD board voted unanimously Tuesday to adopt a $534.8 million budget with a $4.3 million deficit for the 2026-27 school year, which will be paid by the district’s reserve fund. The budget, a 1% decrease over the previous year, doesn’t include pay raises for most employees and increases health insurance premiums for some employees.
The vote came a day after the board elected to lay off 55 employees as part of a cost-cutting plan that included the financial exigency declaration, which allowed the district to terminate employee contracts in the middle of their term to reduce payroll expenses by $40 million.
Dallas Independent School District Deputy Superintendent Eduardo Ramos, who was brought in to help develop EPISD’s budget, said the district was able to cut $57 million in expenses over the last five months, “which has stabilized the district financially.”
Without the cuts, district officials expected a $37.3 million deficit for the coming school year after discovering a multi-million-dollar budget hole in early May.
“It’s mind-blowing that we are saving $57 million and just credit to the staff who work to navigate this extremely difficult situation, knowing that families are affected,” Board President Leah Hanany said.
EPISD Superintendent Brian Lusk said Monday that he estimates the district has cut up to 800 jobs, including over 200 vacant central office positions, since he joined the district in December 2025.
“In the beginning of the process, we heard this board loud and clear that we are heavy in central office and we’ve made significant adjustments,” Lusk said during the Monday meeting.
EPISD trustees on Tuesday also voted unanimously to adopt a compensation plan that does not include pay raises for most employees and eliminates or reduces certain stipends, saving the district $1.1 million a year.
District officials said they are implementing a midpoint pay adjustment and one equity pay adjustment, but did not say to which employees that would apply and how much those increases would be.
Under the plan, health insurance premiums will increase between $200 to $600 a month for some employees and their families. The increases will be implemented in two phases, the first taking effect in July and the second starting in December 2027.
The changes will cut the district’s health insurance costs by $12 million to $72 million.
Juan Chavez, director of employee benefits, said the changes align with TRS-ActiveCare health benefits, which is operated by the Teacher Retirement System of Texas and is available to school districts throughout the state.
“One of the things that we’re trying to do is get our plan to be stabilized, so that our plan starts paying for itself, and we start making up that deficit. So, we’re using TRS as a benchmark in order for us to set our plan,” Chavez said.
The board also voted unanimously to fill by appointment the trustee seats for Districts 6 and 7, which were left vacant after Valerie Ganelon Beals and Daniel Call resigned earlier this month.
EPISD general counsel Cecy Collins said the district has gone through the trustee appointment process seven times since 1995, including when Trustee Jack Loveridge was appointed in 2024.
Collins said it would have cost an estimated $166,000 to hold a special election to fill the terms that expire in May 2027 – when another trustee election is scheduled.
The board unanimously approved creating an ad-hoc committee, which will include Loveridge and Trustee Alex Cuellar, to help manage the appointment process. No timeline was provided.
The board could have opted to leave the seats vacant, but Hanany said she worried doing so would leave a large area of the district without representation.
Before the vote, some parents and educators disagreed on how the seats should be filled.
El Paso American Federation of Teachers President Kara Cervantes said the board should hold an election to ensure voters have a say on the board’s make-up.
“I know the easier course to take would be to appoint people to those. However, by appointing people to those positions, we’re leaving the community out of the conversation, and with not one but two seats open, this is not a situation that should be taken lightly,” Cervantes said.
Parent Roger Scott Brown said calling for an election could add to the district’s financial issues, but did not think the board should have final say on who’s chosen.
“I do believe that people do need to have that input, and I think that the nominations should come from community members, maybe from the teachers union, maybe from the schools,” Scott Brown said. “I don’t believe it should come from you guys. No offense, but we don’t want ‘yes’ men — we want people from the community who the people know.”
The budget was expected to include a $37.3 million deficit for the coming school year. That’s on top of a $47.9 million deficit for the current fiscal year, which ends June 30.
Without the cuts, the district would have had to dip deeper into its fund balance to make up for losses caused by declining enrollment, increasing costs, stagnant state funding and poor financial management.
At the end of the month, the district is expected to have $69.9 million in its fund balance, or enough to keep the district running for 38 days in an emergency, Ramos said.
Under Texas law, school districts need at least 75 days worth of reserves to get an A in the Financial Integrity Rating System of Texas. Getting a failed rating multiple years in a row could put a district at risk of losing its accreditation.
The district plans to set up a budget dashboard on the district’s website with information on its finances and debt for the public to access.
“It’ll be great externally for folks to see that, and then we’ll certainly continue to right size this ship,” Deputy Superintendent David Bates said.
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