Houston Independent School District, Texas
Funding and Spending, FY2019-FY2027¶
Where HISD's money comes from, where it goes, and whether the claim that the state cut its per-student funding holds up against the primary data.
Prepared: October 6-7, 2026; second edition October 8, 2026, extending every series back to school year 2018-19 (FY2019), and updated the same day to carry every table forward through FY2027 with labeled budgeted, amended and projected figures where no audit exists yet. Basis: TEA's Summary of Finances reports for HISD for every school year from 2018-19 through 2026-27, with TEA's full revision history of each, HISD's audited Annual Comprehensive Financial Reports (FY2019-FY2025), HISD's adopted budgets (FY2019-FY2027) and in-year amendments, TEA's PEIMS actual-spending and campus-level data, the budgets HISD filed with TEA (district level 2019-20 to 2025-26; campus level 2025-26), TAPR staffing data, School FIRST ratings, Federal Audit Clearinghouse single-audit records, and EMMA bond official statements. Every figure is traceable to a document listed in References; source files are saved alongside this report. An independent, document-based review (October 8, 2026) confirmed the core findings and led to corrections, notably to the formula-funding series in Section 4. The audit summary lists the review's results, the response, and the remaining open items.
Fiscal years: HISD's fiscal year runs July 1 to June 30; "FY2025" is the year ending June 30, 2025 (school year 2024-25). Texas funds districts through "school years" (SY) on the same July-June calendar. This is an independent analysis and is not affiliated with Houston ISD or the Texas Education Agency.
Audited, budgeted and projected figures
FY2025 is HISD's most recent audited year; the FY2026 audit is not expected before early 2027. Where no audit exists (FY2026 and FY2027), the report uses HISD's budgets and forecasts and TEA's estimates, and every such figure is labeled:
- Audited: HISD's Annual Comprehensive Financial Report (ACFR), audited by an outside firm.
- Adopted budget: the budget the board approved before the year began.
- Amended budget: the last budget amendment the board approved during the year (for FY2026, June 11, 2026).
- HISD forecast or HISD projection: HISD's own in-year estimate, from its board workshop materials.
- As filed with TEA: the budget HISD reported to the state, as published by TEA.
- TEA estimate: a Near-Final or Preliminary run of TEA's Summary of Finances, before final settlement.
- TEA count: TEA's fall enrollment count.
Budgets are plans, not results. In FY2025, HISD's General Fund balance fell $168.0 million more than its adopted budget planned. References lists every source by fiscal year, with its status.
1. Summary of findings¶
Did the state cut HISD's per-student funding? No — this is the question that started the investigation, and the primary data does not support it. The Basic Allotment (the core state per-student rate) rose from $6,160 to $6,215. Combined state-and-local formula funding (Tier One plus Tier Two) per attending student rose from $9,894 (school year 2024-25, TEA Final) to $11,064 (2025-26, TEA estimate), and is $10,992 in TEA's latest preliminary 2026-27 report (Oct. 9, 2026). That increase mixes new state allotments with HISD's one-year "disaster pennies" (a $0.0294 tax added for Hurricane Beryl repairs), which counted as Tier Two enrichment. HISD dropped those pennies when it adopted its 2026 tax rate on October 8, 2026, so the 2026-27 figure will come in lower, roughly $10,500 by our estimate. State aid rose from $172.0 million to $313.7 million. About $113 million of that increase is the state replacing property tax revenue the Legislature cut; $29.5 million is new aid tied to the 2025 Teacher Retention Allotment. Section 4 has the full decomposition. (Corrected October 8, 2026: earlier versions gave $9,225, $9,964 and $9,899, which left out part of Tier Two.)
The real financial pressure is on the spending side, not the state. HISD's General Fund spent more than it took in every year from FY2023 to FY2025, and the deficit grew each year. Setting recapture aside on both sides, General Fund revenue rose $5.1 million between FY2023 and FY2025 while spending rose $295.5 million. (The state takeover began June 1, 2023, the last month of FY2023; FY2024 and FY2025 are the first two full years under the state-appointed board.)
| FY2023 | FY2024 | FY2025 | FY2026 | FY2027 | |
|---|---|---|---|---|---|
| Basis | Audited | Audited | Audited | Amended budget (June 2026) | Adopted budget |
| General Fund deficit (revenue minus spending) | −$20.2M | −$166.6M | −$310.6M | −$55.6M | −$24.6M |
| Change in fund balance (after property sales and transfers) | +$0.2M | −$79.9M | −$299.1M | −$18.0M | −$0.8M |
In FY2025 the district spent $2.251 billion against $1.940 billion of revenue, and finished $74.7 million over its own final budget. HISD's budgets for FY2026 and FY2027 plan much smaller deficits, after spending cuts and with help from one-time items: a $46.6 million "prior period property value audit" payment in FY2026 and $35 million of planned property sales in FY2027. Neither year has been audited.
Reserves fell $379 million in two years. The General Fund balance went from $1.127 billion (June 2023) to $748.1 million (June 2025). The unassigned portion, $464.8 million, is below the board's goal of three months of operating spending: HISD's own April 2026 workshop put three months at $548 million for FY2025, and the policy's formula applied to the adopted budget gives about $499 million. HISD twice committed publicly to keeping at least $800 million and did not. HISD's June 2026 budget amendment puts the June 2026 balance at $730.0 million (unaudited), and the FY2027 budget plans $729.3 million for June 2027. Section 5.
Federal COVID relief ran out, and the General Fund absorbed the cost. Federal revenue fell from $816 million (FY2023) to $401 million (FY2025). Over the same two years, General Fund instruction spending rose 22%, but instruction across all funds was flat (+0.4%), as grant-funded instruction fell from $390.0 million to $170.6 million. Leadership grew across all funds: school leadership +44% and instructional leadership +92%, while enrollment fell 7%.
HISD spends more per student than the state average, concentrated in campus leadership. 2024-25 operating spending was $14,147 per student — 9% above the state average, on par with Dallas and Austin, and 15-26% above the fast-growing Houston-area suburban districts (Katy +15%, Fort Bend +21%, Cypress-Fairbanks +26%). School-leadership spending is 1.8 times the state rate, and HISD has the fewest teachers per student of the eight large districts examined. Section 3.
Schools in the state-mandated New Education System (NES) reform get far more money per student, and are losing students the fastest. The 129 NES campuses in the comparison spent $14,288 per student in 2024-25, versus $9,193 at other campuses ($9,411 leaving out HISD's online school, Texas Connections Academy). The same campuses differed by $1,704 ($1,517 without the online school) in 2022-23, before the reform began. NES campuses lost 11-14% of their enrollment from 2022-23 to 2024-25, against 2.6% elsewhere, and 9.7% in 2025-26 (TEA count), against 4.0% at other brick-and-mortar campuses; the online school grew 31%. HISD's 2025-26 budget, as filed with TEA, keeps a General Fund gap of $12,944 versus $8,409 per student. These are descriptive differences: NES campuses serve higher-need students, and the data cannot show how much of the gap or the enrollment loss NES itself caused. There is no separate state allotment for NES; HISD pays for it from its general resources. Section 6.
Debt outstanding is falling, but new borrowing continues without a voter election. Bonds and notes fell from $2.12 billion to $1.51 billion between FY2023 and FY2025. After voters rejected a $4.4 billion bond proposal in November 2024, HISD issued $114.4 million of maintenance-tax notes (which do not require a vote) and the board authorized up to $182.5 million more in lease-revenue bonds. A 2026 debt refinancing pushes FY2027 debt payments to $438.5 million ($418.2 million on tax-supported bonds and $20.3 million on maintenance-tax notes); the adopted FY2027 Debt Service Fund budget covers its share with $14.0 million of fund balance, plus transfers. Section 7.
Over seven years, HISD went from surpluses to deficits while spending per student rose 51% (about 20% after consumer-price inflation). The General Fund ran surpluses in FY2019-FY2022 ($463 million in total) and deficits in FY2023-FY2025 ($497 million), and the June 2025 reserve ($748 million) is below the June 2019 level ($819 million). Enrollment fell 16% over the period. Before federal COVID relief, HISD spent 5-7% less per student than the state average; it now spends 9% more. HISD paid $969 million in recapture between 2018-19 and 2024-25. Enrollment fell again in 2025-26, to 167,793 (TEA count), and HISD projects 164,812 for 2026-27. Section 9.
Several figures disagree across HISD's own and TEA's documents. The most visible, HISD's FY2025 recapture payment, appears as five different amounts in five sources. Three match TEA's own estimate at different dates (TEA re-issued that year's report 41 times); the audited figure is within $1.4 million of the estimate current when HISD closed its books but matches no run exactly; HISD's budget figure matches none. Section 8 lists every disagreement found and which are now explained.