5. Budget versus actual results, and reserves¶
Budgeted and actual change in the General Fund balance, FY2019 to FY2027¶
| Change in General Fund balance | FY2019 | FY2020 | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 | FY2026 | FY2027 |
|---|---|---|---|---|---|---|---|---|---|
| Adopted budget | −$35.6M | −$23.2M | −$34.0M | −$82.1M | −$100.8M | −$168.5M | −$131.1M | −$14.7M | −$0.8M |
| Final amended budget | −$86.7M | −$89.7M | −$207.0M | −$144.4M | −$164.9M | −$194.4M | −$247.3M | −$18.0M | — |
| Actual (audited) | +$206.3M | +$148.9M | +$28.7M | +$130.3M | +$0.2M | −$79.9M | −$299.1M | not yet audited | — |
| Actual minus adopted | +$241.9M | +$172.1M | +$62.7M | +$212.4M | +$100.9M | +$88.7M | −$168.0M |
Sources: HISD's adopted budget schedules FY2019-FY2027; final amended budgets from each ACFR's budgetary comparison schedule (FY2019-FY2024) and from HISD's June budget amendments (FY2025, FY2026); actuals from the audited ACFRs. Data: data/hisd_gf_fy2019_2027_by_basis.csv.
From FY2019 to FY2024, every adopted budget planned a draw on reserves, and every year came in better than planned: in each year, actual state revenue ran above the adopted budget and spending came in below the final amended budget. FY2025 broke the pattern. The FY2026 and FY2027 budgets plan the smallest draws in the series; neither has been tested by an audit.
The last audited year and the two budgeted years¶
| General Fund | FY2025 adopted | FY2025 actual | FY2026 adopted | FY2026 amended | FY2027 adopted |
|---|---|---|---|---|---|
| Basis | Adopted budget (June 2024) | Audited | Adopted budget (June 2025) | Amended budget (June 11, 2026) | Adopted budget (June 25, 2026) |
| Revenue | $1,888.6M | $1,940.4M | $2,082.0M | $2,053.8M | $1,990.4M |
| Spending | $2,100.3M | $2,251.0M | $2,121.9M | $2,109.4M | $2,015.0M |
| Revenue minus spending | −$211.7M | −$310.6M | −$39.9M | −$55.6M | −$24.6M |
| Property sales, transfers and other sources (net) | +$80.6M | +$11.5M | +$25.2M | +$37.5M | +$23.8M |
| Change in fund balance | −$131.1M | −$299.1M | −$14.7M | −$18.0M | −$0.8M |
| Ending fund balance | $801.6M | $748.1M | $785.2M | $730.0M | $729.3M |
Sources: HISD's adopted budget schedules FY2025-FY2027; General Fund Budget Amendment #2, FY2026 (June 11, 2026); audited ACFR for FY2025.
FY2025 (audited). HISD budgeted $80 million in revenue from property sales and actually received $30,000. Spending ran $74.7 million over the district's own final amended budget, driven by instructional salaries, the Texas Connections Academy virtual school, school leadership, and recapture.
FY2026 (budgets and HISD forecasts; not audited). The year ended June 30, 2026, but HISD's audit for it is not expected before early 2027 (the FY2025 audit opinion was dated January 12, 2026). What HISD has reported so far:
| FY2026 General Fund | Revenue | Spending | Other sources (net) | Change in fund balance | Ending fund balance |
|---|---|---|---|---|---|
| Adopted budget (June 12, 2025) | $2,082.0M | $2,121.9M | +$25.2M | −$14.7M | $785.2M |
| Amendment #1 (February 12, 2026) | $2,074.8M | $2,099.7M | +$28.8M | +$3.9M | $752.0M |
| HISD forecast, actuals to March 31 (April 2026 workshop) | $752.0M | ||||
| Amendment #2 (June 11, 2026), the final budget | $2,053.8M | $2,109.4M | +$37.5M | −$18.0M | $730.0M |
| HISD forecast (May 20, 2026 workshop) | $730.0M |
Sources: HISD's FY2026 adopted budget schedule, Budget Amendments #1 and #2, and its FY2027 budget workshops of April 23 and May 20, 2026.
- The adopted budget started from an assumed $799.9 million beginning fund balance. The audited figure turned out to be $748.1 million, so the adopted budget overstated its own starting reserves by about $52 million. Amendment #1 reset the starting point to the audited figure.
- Amendment #1 added a one-time $46.0 million "prior period property value audit" revenue item (raised to $46.6 million in Amendment #2). Without it, the final FY2026 budget would show a $64.7 million draw; without it and the $15 million of budgeted property sales, a $79.7 million draw, other things unchanged.
- Budgeted state revenue fell from $414.5 million (adopted) to $377.3 million (Amendment #2), and budgeted transportation spending rose from $38.3 million to $52.8 million.
- At March 31, 2026, against the February budget, actual revenue was $1.880 billion and actual spending $1.394 billion (HISD's April 2026 workshop). Spending is weighted toward the end of the year, so these partial-year figures do not indicate the full-year result.
FY2027 changes (adopted June 25, 2026). HISD describes them two ways, and the two lists overlap: a central-office or NES cut also appears in the function lines. Do not add the lists together.
| By function (adopted budget, change from FY2026 adopted) | |
|---|---|
| Instruction | −$96.5M |
| School leadership | −$10.0M |
| General administration | −$7.8M |
| Instructional leadership | +$7.6M |
| Transportation | +$12.1M |
| By initiative (HISD's May 20, 2026 budget bridge) | |
|---|---|
| Central office reductions | −$35M |
| NES campus budget decreases | −$29M |
| School consolidation (projected saving) | −$15M |
| Electricity and water | +$13.5M |
Sources: HISD's adopted FY2027 budget schedule and FY2026 adopted schedule (function lines); May 20, 2026 budget workshop, slide 14 (initiatives).
The FY2027 budget assumes a 4,000-student enrollment loss (to 164,812) and $35 million of property sales. Without the property sales, the budgeted draw would be $35.8 million; with no sales and spending 1% over budget, $55.9 million. In FY2025, HISD budgeted $80 million of property sales and received $30,000. The board adopted the FY2027 (tax year 2026) rate on October 8, 2026: $0.8421 per $100 of property value, maintenance & operations $0.6754 plus debt service $0.1667 (HISD Legistar file 26-346). That drops the one-year $0.0294 "disaster pennies" of tax year 2025, which HISD's May 2026 workshop valued at about $50 million. As of October 12, HISD's tax-rate page still showed the 2025 rate.
Reserves (General Fund balance)¶
| June 30 | Basis | Total fund balance | Unassigned portion | Months of spending (total / unassigned) |
|---|---|---|---|---|
| 2019 | Audited | $819.0M | $512.3M | 4.9 / 3.1 |
| 2020 | Audited | $967.9M | $655.1M | 6.2 / 4.2 |
| 2021 | Audited | $996.6M | $556.3M | 5.6 / 3.2 |
| 2022 | Audited | $1,126.9M | $664.2M | 6.8 / 4.0 |
| 2023 | Audited | $1,127.1M | $590.1M | 6.2 / 3.3 |
| 2024 | Audited | $1,047.2M | $590.1M (identical to 2023) | 5.9 / 3.3 |
| 2025 | Audited | $748.1M | $464.8M | 4.0 / 2.5 |
| 2026 | Amended budget and HISD forecast (not audited) | $730.0M | not reported | 4.2 (total) |
| 2027 | Adopted budget | $729.3M | not reported | 4.3 (total) |
Sources: audited ACFR balance sheets, FY2019-FY2025; HISD's FY2026 Budget Amendment #2 and FY2027 adopted budget. Months of spending: fund balance divided by one month of actual total General Fund spending (budgeted spending for 2026 and 2027); this is not the board policy's formula (see below).
- The unassigned balance was held exactly flat for two years — exactly $590,067,862 in both 2023 and 2024 — while an "Instructional Reserve" accounting assignment absorbed the real losses, falling from $264.2 million to $215.6 million to $0. Looking at the unassigned figure alone, without also watching the assigned and total balances, would have missed the real drawdown.
- HISD's unassigned balance is below the board's three-month goal. Board policy CE(LOCAL), adopted November 2021, sets a goal of an unassigned balance of at least three months of operating expenditures. It measures that as adopted General Fund operating expenditures, less recapture and non-cash expenditures, divided by 12, times three. HISD's April 2026 budget workshop put three months at $548 million for FY2025. Applying the policy's formula to the adopted FY2025 budget, less the $103 million of TRS on-behalf payments, gives about $499 million (our calculation; HISD has not published its own). The June 2025 unassigned balance was $464.8 million, $34.6-83.2 million short. The 2.5 months in the table above uses actual total spending, not the policy's formula. HISD's budgets do not split the projected 2026 and 2027 balances into assigned and unassigned portions.
- A widely repeated figure that HISD's reserves "fell about $450 million" is directionally right but matches no single audited line. Depending on the measure: total General Fund balance fell $379 million; the unrestricted fund balance (committed + assigned + unassigned) fell $501 million; all governmental funds combined fell $546 million.
- HISD's own financial consultants (Alvarez & Marsal) projected the district's fund balance would have fallen to $252 million by FY2026 if no budget cuts had been made.