The Ysleta Independent School District remains mired in a financial crisis, with the board of trustees Wednesday adopting a budget that nearly depletes its savings and only provides required step increases for teachers.
In under an hour and with only one public commenter, the YISD school board voted 5-1 to adopt a $391.4 million operating budget for the next fiscal year – leaving about $4.5 million in its savings, known as the fund balance. That’s slightly higher than the $1.5 million fund balance anticipated earlier this week before more budget adjustments were made.
The budget includes a deficit of just over $12 million, which will eat much of the current $16.5 million fund balance.
Trustee Chris Hernandez voted against adopting the recommended budget – the fourth year doing so – while Trustee Shane Haggerty did not vote. Haggerty said not voting wasn’t an indication of indecision, but what’s left when a trustee is “asked to participate in a decision that has, in every way that matters, already been made.”
Voting to approve the budget were board President Carlos Bustillos and Trustees Connie Woodruff, Mike Dwyer, Cruz A. Ochoa and Henry Rivera.
Blaming the state, and specifically Texas Gov. Greg Abbott, for much of the district’s budget woes, Hernandez said he voted no because of what he called the “blatant lack of transparency” by administrators who brought forth the proposed budget during a workshop Monday. He blamed the rest of the board for rubber-stamping the administration’s recommendations.
“What I watched repeatedly is a board that accepts whatever administration puts in front of them,” Hernandez said. “It is the absence of oversight.”
The adopted budget includes about $345.5 million in payroll expenses – a decrease of about 5% over the current year.
No layoffs are planned under this budget, but YISD Superintendent Xavier De La Torre has told El Paso Matters that they’ll most likely be a reduction in force next year with notifications going out in early spring.
Jeff Cynor, president of the Ysleta Teachers Association, during public comment acknowledged budget challenges facing school districts and expressed appreciation for the district not planning any layoffs under the adopted budget.
“The commitment to avoiding layoffs helps put minds at ease and allows employees to focus on what they do best,” he said.
Fund balance and financial ratings
This year’s $4.5 million fund balance leaves the district with only enough money to operate for four days in case of an emergency – far lower than the 75 days recommended by the state.
The district’s financial troubles will impact its financial integrity rating, projected to drop from a B (above standard achievement) to a C (meets standard achievement) for the next rating period, YISD Chief Financial Officer Lynly Cambern told El Paso Matters. Current fiscal year ratings, which grade financial management practices, will be released in fall 2027.
The financial challenge facing YISD and school districts across El Paso and Texas is attributed to several factors, including decreased student enrollment due in large part to declining birth rates, increasing operating costs such as utilities, and stagnant state funding coupled with increased homestead exemptions approved by voters last year.
The state was expected to reimburse school districts for much of the loss in property tax revenue, but a state miscalculation left many districts short – including $11 million at YISD.
Still, education experts say there’s more school district leaders and school boards could have done to stave off financial disaster, including taking the widely unpopular steps of not offering pay raises or bonuses and considering layoffs and school closures much sooner.
“This is very complicated and there’s a lot at play, but a lot of this should have been done years ago,” said Manny Soto, a longtime school administrator who worked at Ysleta ISD for nearly 30 years. He said school leaders could have better projected enrollment declines had they been regularly tracking birth rates and other demographics. “All of this wasn’t created overnight.”
In Ysleta ISD, the board previously approved pay raise packages despite the administration’s warnings that doing so would eat into the fund balance and lead to a financial emergency.
Though not up for vote until later in the year, employee health care costs are also likely to increase in 2027 under some scenarios presented to the board Monday.
Ysleta ISD, which raised its employee contributions and cut available plan options this calendar year, is considering increasing deductibles by $250 to $500 depending on the plan starting in January. Co-payments may also increase by $5 to $25 in several areas, including pharmacy.
Layoffs, tax ratifications and school closures
To help avoid financial exigency, the district is considering more staffing cuts, including layoffs, in 2027.
Administrators are also recommending that the board call for a tax ratification election in November that, if approved by voters, would create about $6 million in additional property tax revenue a year.
The board also unanimously approved a $24,000 contract with MoakCasey for a district efficiency audit, which is required before holding a voter approval tax ratification election. The audit would be completed in August, just weeks ahead of the deadline for the district to call for the tax election to be placed on the November ballot.
An Austin-based public school consulting firm, MoakCasey is the agency that the El Paso Independent School District hired for its audit in May, which identified deep-rooted financial mismanagement and led to the district declaring financial exigency.
READ MORE: Ysleta ISD eyes tax ratification election as enrollment declines, future layoffs possible
“(De La Torre) is counting on voters to bail them out and voters are going to think twice,” said Soto, who now serves as director of data for the local nonprofit Council for Regional Economic Expansion and Educational Development. “From a taxpayer point of view, some people are going to have doubts about supporting (the tax ratification election) given everything we know about what poor decisions the district has made over the years.”
De La Torre earlier in the week told El Paso Matters that he does not anticipate needing to declare financial exigency because layoffs would come early enough that the district could simply not renew contracts rather than breaking them midterm as the El Paso Independent School District did this week.
El Paso ISD, the county’s largest school district, earlier this month declared financial exigency, a rare measure similar to a bankruptcy that allows school districts to break service and employee contracts. This week, the district laid off 55 employees, the vast majority of which are teachers.
Ysleta ISD also plans to offer incentives as early as December for teachers to voluntarily leave the district when their contracts end next school year. The district has a near freeze on outside hires, instead filling vacancies with current employees already on the payroll.
Additionally, the district by January will shut down César Chávez Academy and consolidate it with Thrive Academy, both in the Lower Valley, which will save the district about $2 million a year. The César Chávez Academy would be put up for sale and added to the district’s $50 million portfolio in properties now up for sale, De La Torre said.
In other board action Wednesday, trustees approved a resolution that allows the district to issue $65 million in tax notes – debt repaid from the district’s future maintenance and operations tax revenues. Unlike a general bond, tax notes don’t require voter approval. Haggerty voted against the measure.
The money 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.
The notes, which would be issued starting in August, would be repaid over 10 to 15 years.
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