McAllen ISD Holds Final Workshop on $287.9M Budget Ahead of June 23 Vote, Reviews Teacher Pay Raises, Fund Balance, and Staffing Ratios, Tax Rate Unchanged
McAllen ISD, Board of Trustees, Budget Workshop, Teacher Compensation, Tax Rate, Staffing Guidelines, McAllen TX
Staff Report
McAllen TX - The McAllen Independent School District Board of Trustees held its sixth and final budget workshop for the 2026-2027 fiscal year Wednesday, June 17, 2026, ahead of the board’s scheduled vote to adopt the budget on Tuesday, June 23.
The proposed 2026-2027 budget presented at this workshop totals $283 million in revenue against $287.9 million in appropriations, leaving a gap of $4.9 million. That gap is covered by drawing $2.96 million from the fund balance and $1.96 million from Fund 197 (the maintenance tax note fund), for a combined total of $4.92 million in fund draws to balance the budget. The district’s tax rate remains unchanged at $0.9322.
This was described as the “near final” version, with the board scheduled to formally adopt the budget at its June 23 meeting.
Deputy Superintendent for Business and Operations Lorena Garcia presented the budget summary, framing it around three priorities. “This budget reflects three priorities, which we’ve always said: number one, we want to stay student-focused, support our students. We also invest in our employees, retaining our staff and hiring high-quality employees, and also maintaining our long-term stability,” Garcia said.
Superintendent Dr. René Gutiérrez opened the presentation by noting the board’s legal obligation. “Board policy CE local requires districts to prepare a budget for the anticipated expenditures and revenues before June 19th, and board approved by June 30th,” Gutiérrez said.
Budget Summary and Fund Balance
The proposed budget shows $283 million in revenue against $287.9 million in appropriations. Garcia outlined how the district plans to close that gap.
The district will draw $2.96 million from its fund balance, about 1% of the total budget, with roughly 60% of that, or $1.7 million, coming from the unassigned fund balance and the remainder from restricted program and federal funds.
The district has already tracked approximately $4.5 million in savings this year from payroll savings and unspent budget allocations that can help cover the deficit.
An additional $1.96 million will be drawn from Fund 197, the maintenance tax note fund, made up of investment earnings from a 2011 maintenance tax note that has already been paid off. Those earnings will be used to pay down the remaining 2012 and 2020 notes. Garcia cautioned that the funding source will not be available next year. “Once that is spent, that will not be available next year. Next year we will have to pay the full payment out of the general fund,” Garcia said.
The district’s fund balance is projected to end 2025-2026 at $95 million, dropping to $92 million after the proposed draw. Garcia said that still leaves the district well above its policy minimum. “That still leaves us with 132 days of operational days. Our policy requires 75 days, so we’re still well above the minimum. We’re about 57 days over that minimum,” Garcia said.
Compensation Plan
The proposed compensation package represents a total investment of $4.2 million, including $3.5 million for compensation and benefits, $627,000 in market equity adjustments, and $148,450 in stipend increases.
Garcia outlined the proposed teacher pay structure, which includes a standard raise of 1.5% of the market median, equivalent to $1,000 for most teachers, layered with required catch-up payments tied to the state’s Teacher Incentive Allotment thresholds:
Starting (zero-year) teachers would begin at $56,000 annually.
Teachers with one to two years of experience would receive the standard $1,000 raise.
Three-year teachers would receive $1,940, reflecting the standard $1,000 raise plus $940 needed to reach the state-required $2,500 cumulative threshold for a district of McAllen ISD’s size, after accounting for $1,560 already paid last year.
Four-year teachers would receive the standard $1,000 raise.
Five-year teachers would receive $3,500, reflecting the standard $1,000 raise plus $2,500 needed to complete the state-required $5,000 cumulative threshold.
Teachers with six or more years of experience would receive the standard $1,000 raise.
Garcia emphasized the underlying structure. “Just to be clear, every teacher, we are recommending the $1,000. The ones that are getting a little bit extra, it’s a pass-through from the state. It’s the teacher retention allotment,” Garcia said.
Hourly employees are recommended for a 3% increase based on their pay grade midpoint, ranging from 69 cents to $1.30 per hour depending on pay grade. Administrators are recommended for a 1% increase of their midpoint.
Revenue Projections
Garcia said total revenue is projected to grow by about $4.1 million compared to last year’s original budget, even as the district anticipates a decline in average daily attendance from 17,686 to 17,522.
Local revenue, driven primarily by property taxes, saw the largest increase, accounting for roughly $4 million in growth.
State revenue saw a modest increase, offset by declines tied to enrollment loss and a decrease in state compensatory education funding, the result of a shrinking at-risk student population.
The Teacher Incentive Allotment increased by $3.3 million, though Garcia noted those funds are a pass-through that must go directly to designated teachers.
The state’s per-capita distribution rate increased from $400 to $600 per student, generating approximately $3.5 million.
Federal revenue declined, driven largely by the district’s child nutrition program, where reimbursement rates are tied to enrollment.
Expenditures
The largest area of investment remains instruction and direct student services. Special education spending increased due to a rising number of students identified for services, though Garcia noted the state is revamping special education funding formulas and the district remains hopeful for additional revenue in that area going forward. The maintenance tax note line item decreased by $1.9 million because the district will use note interest earnings rather than general fund dollars to make that payment this year.
Trustee Roberto A. Haddad, asked why instruction and instructional support appeared to be reduced by roughly $5 million when comparing the proposed 2026-2027 budget to the district’s actual 2025-2026 budget. Garcia explained the apparent reduction reflects one-time spending added through budget amendments during the current year rather than a structural cut. “It’s largely one-time expenditures. It’s not like we’re making big cuts to these, to instruction,” Garcia said, pointing to mid-year amendments in state compensatory education, career and technical education, and testing services.
Haddadd confirmed the broader pattern after reviewing the district’s posted financial transparency documents, noting the original 2025-2026 budgeted expenditures across all funds totaled $281 million while the actual amended budget reached $320 million, a difference of roughly $40 million. Garcia confirmed the bulk of that increase came from a $15 million payment tied to the maintenance tax note, along with investments in stadium track and turf, technology, fine arts, and athletics.
Staffing costs make up approximately 82% of the budget when adjusted for pass-through payments. Garcia said staying below the 80% threshold is becoming increasingly difficult as teacher salaries rise under the state’s incentive and retention allotments.
Debt Service and Bond Update
Voters approved Proposition A, a $335 million bond issue, on May 2. Garcia said the district is currently debt-free after paying off its prior bonded debt, and plans to issue the first $100 million tranche of the new bond in September. The district anticipates its first payment on that issuance next year will total $12.6 million, based on figures developed with financial advisor Estrada & Hinojosa.
Tax Rate and Taxpayer Impact
The district’s total proposed tax rate remains at 93.22 cents, unchanged from the current year, though the internal split between maintenance and operations and interest and sinking is shifting. The maintenance and operations portion is projected to compress from 80.22 cents to 79.54 cents, with the interest and sinking portion rising from 13 cents to 13.68 cents. Garcia noted the state has not yet finalized its maximum compression rate, which could adjust those figures before certified property values are received in July and the tax rate is formally adopted in September.
A newly required Taxpayer Impact Statement, posted to the district’s website June 10, shows the median homestead value after exemptions decreasing from $122,465 last year to $98,988 this year, according to Hidalgo County Appraisal District figures. At the same 93.22-cent rate, that translates to an estimated tax bill of $922.77, down from $1,141.62 last year, a savings of about $211 to the average taxpayer.
One trustee noted the district has already maximized its Tier 2 supplemental tax rate, an additional 17 cents available to districts statewide. Garcia confirmed the point. “We’ve already maximized the tier two, which is great because it gives us additional revenue,” Garcia said.
Staffing Guidelines
Chief Human Resources Officer Dr. Albert Canales presented updated staffing guidelines, developed in coordination with campus principals, department coordinators, and instructional leadership. The most notable proposed change raises secondary campus class-size ratios, with middle schools moving from 25:1 to 27:1 and high schools moving to a 28:1 ratio.
Extended board discussion followed regarding the relationship between the staffing guidelines and actual PEIMS-reported teacher-to-student ratios at the high school level, which trustees noted appear significantly lower than the proposed 28:1 guideline. Canales explained that PEIMS actuals aggregate all secondary campuses districtwide, including specialized programs such as IB, IB Lamar, Achieve Early College High School, and dual enrollment courses through UTRGV, which typically carry much smaller class sizes and pull the district-wide average down. “The specialized schools are always gonna cost us more because the class sizes are smaller, but in order for us to remain competitive with surrounding districts, we gotta have those programs,” Canales said, citing IB, Achieve, UTRGV, and Collegiate High School as examples. Canales also noted that federally funded class-size-reduction programs serving at-risk students are capped at a maximum of 18 students per class.
Asked about the purpose of the staffing guidelines given that actual ratios often run well below them, Canales said the guidelines exist to maintain equity across campuses and to prevent new hires in areas where existing ratios do not justify additional staff. “The purpose of this is just to ensure that we have equity across our district and our campuses,” Canales said, adding that any requests to staff a campus below the standard ratio require approval from Gutiérrez and district leadership.
One trustee asked whether the district has studied any correlation between class size and STAAR or end-of-course performance. Canales said no formal analysis has been conducted but agreed it would be worth examining. A separate trustee asked staff to compare student-to-counselor caseloads across campuses against scholarship dollars awarded and college acceptance rates, citing feedback from parents about disparities between smaller and larger comprehensive high schools.
One trustee offered a broader assessment of the district’s staffing challenges, noting that more than 80% of the budget goes toward compensation even as enrollment patterns create uneven class sizes across campuses. “We’ve got really crowded campuses and classes, and then really under-enrolled,” the trustee said, urging the board and administration to address staffing imbalances over the next three to five years to create room for more substantial future raises.
Canales noted that older campus buildings also factor into staffing decisions independent of enrollment ratios, since some classrooms, particularly at older high schools, cannot physically accommodate the full 28-student guideline.
Draft Budget Book
Chief Financial Officer Joel Garcia presented the draft budget book, which serves as a supporting document to the presentation. Garcia noted the district has produced an annual budget book since 2011 as part of its commitment to financial transparency, and that the document has been recognized by professional organizations for its clarity. The final 2026-2027 budget book will be ready Monday, June 22, with the board receiving both a hard copy and a digital copy that day, one day ahead of the scheduled vote.
Garcia closed the presentation by characterizing the proposed budget as reflective of the district’s broader priorities. “Our budget supports students, investment in employees, and maintaining strong financial reserves, and we have done this with conservative planning assumptions,” Garcia said. “At this time we would be comfortable with recommending this proposed budget as the near final for the board’s approval on June 23rd.”
One trustee closed the discussion by placing the district’s financial position in a statewide context. “It’s worth saying in the context of where we are as a state in public education and finances, we are in a markedly different position than many of our peers across the state, and I think that is a testament to the team, to Dr. Gutiérrez, to the leadership of this board,” the trustee said.