If the El Paso Independent School District declares financial exigency and permits Superintendent Brian Lusk to cut hundreds of jobs in coming weeks, the district can move quickly to restore financial health, the school board was told Tuesday morning.
The board was presented with a plan for extensive cost cuts to prevent a deficit of more than $40 million in the 2026-27 budget after racking up a deficit of more than $50 million this year.
The seven members will vote Thursday night on the plan which would declare a financial exigency for the remainder of this budget year, which ends June 30, and for all of 2026-27. The proposal – which seems certain to be approved because no other options are being discussed – will grant Lusk sweeping powers to end contracts, including employment agreements, and make other changes to reduce costs.
“Now I will say this, and I’ll say it publicly, we will be better than that. We will right the ship, and in October, I plan to come back to this board and ask for your termination of financial exigency. That’s how confident I am on this point,” Deputy Superintendent David Bates told the board.
The cuts will be sweeping and painful. The exigency plan includes the elimination of 410 positions – 250 at campuses and 160 administrative positions – that will come through a combination of layoffs, attrition and not filling vacancies. It is the largest one-time employment reduction ever for an El Paso County school district.
“I want to be clear, this is not the fault of any team member that we have in this district, as far as them being in a position that may be redundant,” Lusk said of employees who will lose their positions if the board approves the financial exigency plan Thursday.
Board President Leah Hanany said Thursday’s vote “is the most heartbreaking decision that we’ll ever have to make as a trustee, as an elected official.”
“Every single number and line item represents a family, represents a home, represents possibly parents, children. So, every single decision that we make this week, we need to be sensitive, we need to be compassionate, understanding that we don’t have sufficient funds to continue on track the way we’ve budgeted in the past, and so it is very delicate,” Hanany said in a brief news conference after Tuesday morning’s one-hour meeting.
The deep budget cuts are being made primarily in payroll because that accounts for almost nine of every 10 dollars spent by EPISD. For years, the district’s percentage of total expenditures going to payroll have been well above the state average, an El Paso Matters review of Texas Education Agency data shows.
El Paso’s other two large districts, Socorro and Ysleta, also devoted more than 87% of operational funds to payroll last year and budgeted to do so again this year. That’s more than 5 percentage points above the state average.
Bates told the board that administrators had already eliminated 209 administrative positions and nearly 600 in all, largely through cutting g unfilled jobs.
Lusk told El Paso Matters last week that the number of employees in the district would decrease by 10% if proposed cuts are approved by the board. Bates said Tuesday that the budget approved by the board last spring included 7,768 positions, and another 145 positions were added by December, bringing the total to 7,914 at that point.
At Tuesday morning’s meeting, the board individually addressed a number of contracts with vendors, worth a total of almost $3 million, that historically have been approved on what is known as the consent agenda, where such contracts are approved together with no discussion.
Consent agendas are a common tool for government boards to address routine contracts, but little is routine in EPISD these days.
The board approved most of the contracts after hearing a description of the services. However, the board voted 4-3 against a contract worth up to $318,000 with Region 19 Education Service Center to provide required state training for reading teachers.
Two district employees have been paid a combined $180,000 annually to provide the training. Administrators, including Lusk, said the Region 19 contract would provide the training for all 109 teachers needing it this coming school year, while keeping it in house would require two years.
READ MORE: 6 things to know: How EPISD is handling a financial crisis
The proposed declaration of financial exigency comes after El Paso ISD officials said they discovered a far deeper budget crisis than previously known last month. District officials have said EPISD is facing a $52.8 million budget shortfall in the current fiscal year and projects a deficit of about $42 million next school year if significant spending reductions are not made.
Bates said he expects the two deficit numbers will come down slightly ahead of Thursday’s meeting. The board’s expected approval of the financial exigency proposal will allow the district to eliminate the 2026-27 deficit, but will not impact the current year deficit, which will be paid from the district’s fund balance, or reserves.
District leaders have attributed the crisis to years of spending growth, declining enrollment and what outside consultants described as systemic problems in tracking finances.
The financial problems emerged publicly this spring after district officials hired consulting firm MoakCasey to review EPISD’s finances. The review found payroll expenses that exceeded budgeted amounts by about $22 million and another $11.2 million in spending that had not been properly accounted for. What initially appeared to be a budget gap of about $6 million grew into a much larger deficit, prompting district leaders to consider emergency measures.
The consultants and Lusk recommended declaring financial exigency, a legal designation available to Texas school districts experiencing severe financial distress. Under state law, a declaration allows districts to reduce staffing and terminate employment contracts as part of a reduction in force. The proposed declaration would remain in effect through the end of the 2026-27 school year.
District administrators proposed reducing staffing levels by more than 400 positions through a combination of layoffs, retirements, resignations and the elimination of vacant jobs. Agenda documents released ahead of the meeting showed approximately 250 campus-level positions and about 160 central office positions targeted for reductions, which district officials estimate would save roughly $28 million annually.
The cuts would affect campuses and departments throughout the district.
The staffing reductions are part of a broader package of cost-saving measures. District administrators have also proposed cutting the district’s contribution to employee health savings accounts, reviewing stipends for possible reductions, reducing travel spending and improving financial reporting and state data collection practices.
If trustees ultimately approve a financial exigency declaration at a meeting on Thursday, EPISD would become the 19th Texas school district to take that step in the past decade.
Next EPISD board meeting
When: 5 p.m. Thursday, June 4.
Where: El Paso ISD central office, 1014 N. Stanton St.
What: The school board will vote on whether to declare financial exigency, which would allow the superintendent to make sweeping job cuts and other budget reductions to erase a $42 million deficit from the 2026-27 budget. The board must adopt the budget by June 30.
The post ‘We will right the ship’: EPISD plans largest workforce reduction in county school district history amid budget crisis appeared first on El Paso Matters.
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