Some of the smallest school districts in El Paso County face significant financial challenges as they prepare for the coming school year – cutting costs by closing and consolidating campuses and laying off staff.
The San Elizario and Fabens school districts expect their expenses for the 2026-27 school year to outweigh their revenue. Now, they are trying to save money while doing everything they can to avoid layoffs.
The San Elizario Independent School District closed two of its four elementary schools this summer and is transferring students and staff to the campuses that remain open.
The Tornillo Independent School District laid off four of its nearly 60 teachers earlier this year to avoid a deficit, and now plans to move all its seventh- and eighth-graders to its high school. The district will turn its former middle school into a pre-kindergarten through sixth-grade campus.
Without cutting expenses, school districts with deficits may need to dig into their savings — known as an unassigned fund balance — to cover their costs for the school year.
All three districts have a healthy fund balance, with more reserves than what the state recommends. But, if they continue to spend their savings, they could risk depleting them.
The Fabens and San Elizario school districts adopted budget deficits last month for the 2026-27 school year. Tornillo ISD won’t adopt a budget until August.
Meanwhile, some of the largest districts in El Paso County have tapped heavily into their savings, putting them in dire financial crises. This includes the El Paso Independent School District, which declared financial exigency last month and laid off several dozen employees; the Ysleta Independent School District, which has nearly wiped out its savings will likely have to call for a reduction in force next year; and the Socorro Independent School District, which implemented layoffs last year.
School district leaders say the financial turmoil was caused in part by declining enrollment, low attendance, falling birth rates and stagnant state funding. Texas’ basic student allotment, which is used to calculate public school funding based on enrollment, remained unchanged for six years until lawmakers in 2025 raised it by $55 to $6,215 per student.
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For many districts, the increase was not enough to cover regular expenses that grew because of inflation, and new unfunded mandates that came from the last Texas Legislature, including requiring seatbelts in school buses and other school safety measures.
San Elizario ISD Superintendent Jeannie Meza-Chavez said the mandates have created a financial strain on districts with already limited budgets.
“When you look at how much we’re receiving for safety, it’s not enough, with all of the requirements that are being asked of school districts,” Meza-Chavez said.
Most school leaders, including Fabens ISD Superintendent Rogelio Segovia, said school officials hope lawmakers increase public school funding during the next legislative session, which convenes in January.
“They need to increase the allocation that the schools get to ensure that our district gets adequate funding so that we can not only meet the mandates that they request, but also the needs of our district,” Segovia said.
San Elizario ISD
In southeast El Paso County, San Elizario sits along the Rio Grande with the historic Camino Real trail running through its boundaries.
Enrollment at San Elizario ISD has declined by about 24% from 2018-19 to about 2,800 students in 2025-26.
Meza-Chavez said the district loses about 100-150 students a year, and expects to be down to about 2,700 students when school starts Tuesday, July 21.
In June, San Elizario adopted a $40.8 million budget for the coming school year, with a $4 million deficit, which is about 10% of its total expenses.
The district ended the previous three fiscal years with a deficit, digging into its savings.
As of July 1, the district had over $11.5 million reserves. If the district doesn’t cut expenses for the coming school year, the deficit will take the fund balance down to $7.5 million, or enough to keep the district running for about 67 days in an emergency, according to El Paso Matters’ calculations.
The state requires school districts to have at least 75 days worth of fund balance to get an A in the Financial Integrity Rating System of Texas.
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In prior years, the district saw smaller deficits, close to $1 million. Meza-Chavez said the deficit grew this year in part because fewer employees are resigning or retiring from the district — a process known as attrition — while enrollment continued to decline consistently.
“We’ve had less vacancies, people leaving, and you know, that’s a good thing, but that’s also a bad thing,” Meza-Chavez said. “Through attrition, we’ve always looked at positions, evaluated them to see whether they are needed. But because we transferred into the four-day instructional week, less people are leaving for reasons of going somewhere else.”
The district closed Lorenzo G. Loya Primary and Lorenzo G. Alarcon Elementary schools to cut costs on utilities and maintenance, while keeping the employees who worked there on its payroll. Displaced students and staff will move to the nearby Josefa L. Sambrano and Alfonso Borrego Sr. elementary schools.
“Hopefully we don’t get to a point where people will be losing their jobs, and I think that that’s why the decision to close two schools is, if you look at our building utilization, it made sense,” Meza-Chavez said.
Meza-Chavez said the district has not made estimates on the savings from closing the schools or how long it will take to realize them.
“I think it would be a little bit preliminary for me to say, ‘OK, this is how much we’re going to save,’” she added.
Fabens ISD
Fabens is a farming community off Interstate 10 about 15 miles east of the El Paso city limits.
On June 17, the Fabens ISD board adopted a $26.7 million budget for the coming school year with a $1.5 million deficit. That’s close to 6% of its expenses.
The district adopted a $2 million budget deficit for the last fiscal year, which ended in June, but Fabens ISD finance director Lily Nuñez said she won’t know how it will impact its savings until the district completes an audit on the budget.
The district started the school year with about $11 million in savings, or enough to operate for about 120 days.
Nuñez said low attendance has been one of the largest contributors to the deficit.
“There is a gap between the number of students we have enrolled versus the number of students that are actually attending school. So that creates a huge gap in our funding. Whether students are showing up or not, we still have to have the staff to cover those students that we have enrolled,” Nuñez said.
Average daily attendance is a major factor in how the state calculates funding for schools.
Student enrollment at Fabens ISD declined by about 18% from the 2018-19 school year to about 1,800 in 2025-26, according to Texas Education Agency data.
Now Nuñez expects enrollment to decline by about 40 students in the coming school year, she said during a June school board meeting. As of the meeting, about 1,400 students had enrolled for the coming school year, which begins Aug. 4.
She hopes enrollment will continue to rise, but noted she may have to make budget adjustments and unspecified cuts.
“If this continues to remain at the lower rate, then I would have to come back to you for your approval for us to reduce our operating (expenses) and reduce our revenues, which will entail that our deficit will continue to increase from that point,” Nuñez said during the meeting.
Nuñez said the district has had staff overages since the beginning of 2026.
This is after Fabens ISD made adjustments to reduce payroll costs during the 2024-25 school year, including hiring from within the district to fill vacancies, reducing summer school teacher pay and offering $5,000 buyouts to employees who notified the district of their plan to retire or resign over the summer.
Over a dozen employees have taken the separation incentive since it was implemented in 2025, costing the district $45,000, Nuñez told El Paso Matters. She said this saves the district about $330,000 a year.
Tornillo ISD
Tornillo is a small border town that sits along the Rio Grande, about 25 miles southeast of the El Paso city limits.
Tornillo ISD’s enrollment declined by about 30% over the last eight years, to fewer than 700 in 2025-26, according to TEA data.
Superintendent Rosa Vega-Barrio said the district expects to be down to 600 students by the 2027-28 school year.
Tornillo ISD expects to adopt a nearly $11 million budget in August with about a $200,000 surplus, according to a preliminary budget presentation given in June.
This is because the district cut several positions, saving over $540,000 a year in payroll expenses. This includes four teachers who were laid off under a reduction in force approved by the Tornillo ISD school board in February.
Vega-Barrio noted that the layoffs were not the result of “insufficient financial resources to pay salaries. Rather, they reflected the reality that we simply no longer have the student enrollment to justify those positions.”
“Our responsibility is to align staffing with enrollment while protecting the district’s long-term financial health,” she added.
Tornillo ISD has about $5.6 million in its fund balance, which is enough to keep the district running for almost 170 days.
Vega-Barrio said the district found that its high school and middle school were operating at 47% and 67% capacity, respectively, after conducting an analysis of its campuses about three years ago.
Now the district plans to move all pre-K through sixth-grade students to Tornillo Junior High and have all students from grades 7 through 12 attend Tornillo High School. Eventually, within the next three to four years, the district plans to transition all its students from every grade level to a single campus, according to the presentation.
“This realignment allows us to maximize existing facilities, reduce maintenance and utility costs, improve operational efficiencies, and reduce personnel expenditures without compromising academic programming,” Vega Barrio said.
The post Rural El Paso districts close schools, lay off employees as enrollment declines appeared first on El Paso Matters.
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