Plano ISD approves budget, faces $44.8 million shortfall

Plano ISD approved a $691.6 million general operating budget that still leaves the district with a $44.8 million shortfall heading into the 2026-27 school year. The gap remains even after $12.2 million in operating transfers from another fund.

Chief Financial Officer Courtney Reeves told trustees the problem is not a matter of poor management. She pointed to a school finance system that has not kept pace with inflation, rising operating costs and new state requirements, a mismatch playing out as enrollment keeps sliding and state recapture rises.

Six state-mandated programs that Texas does not fully fund will cost $141.3 million next year, while the state is expected to provide $66.9 million. Those programs are special education, student transportation, safety and security, gifted and talented services, pre-K and dyslexia.

Plano ISD has already been reshaping expenses around changing enrollment. District staff have reduced vacancies, cut discretionary spending and reviewed programs for student impact. The district’s department budget will rise by only 0.2% year over year, the smallest increase since FY 2021-22, with expected savings from lower custodial costs, lower in-school support service costs and moving counseling and guidance services in-house.

Plano ISD first projected about a $43.75 million deficit in January, then about $44 million by May. In that May presentation, staff projected about $561.9 million in expenditures and about $517.1 million in net revenue, with the shortfall tied largely to declining enrollment and a rising recapture bill. The district expected to lose 2,008 students in 2026-27, a decline of about 4.6%, after enrollment peaked at 55,659 students in 2011-12 and fell to 43,838 in an October 2025 count.

The recapture payment, which sends local tax revenue back to the state under Texas school finance formulas, has also climbed. A January briefing put the projected recapture bill at about $124.07 million, while later spring estimates placed it at about $132.54 million, roughly $14 million more than the prior year.