Education
BY MARY KATHERINE SHAPIRO
McKinney ISD o cials predict $7.5M budget shortfall for FY 2026 27
The context
Local property taxes are a signi cant source of revenue for the district, according to district documents. The district’s tax rate is made up of two parts, maintenance and operations, or M&O, and interest and sinking, or I&S. The tax rate in the adopted 2025-26 budget is set at $1.1043 per $100 assessed valuation, per district documents.
A nancial outlook for McKinney ISD’s scal year 2026-27 shows a potential $7.5 million budget shortfall, district o cials said. Budget discussions began ahead of the upcoming scal year, with McKinney ISD’s Chief Financial O cer Marlene Harbeson giving a presentation at a March 23 meeting. The budget shortfall is a projection and could change, she said. As of late March, district o cials are predicting to end the 2025-26 scal year with a fund balance of about $93.4 million, which would result in just over $321,000 in surplus funds, according to district documents. Various factors could change that number by the time the scal year ends, Harbeson said. “As far as this year is concerned, it’s de nitely a moving target,” she said. “I’m pretty con dent in saying it will change again before we get to the end of this year.” In predicting the 2026-27 budget, the district predicted a 96% average daily attendance rate with about 24,000 students, Harbeson said, as the average daily attendance rate will determine a portion of the district’s funding. O cials also factored in a 4% increase in property tax values and a 3% mid-point pay increase for sta , Harbeson said. The projected budget predicts the district will generate about $261.7 million in revenue from sources including property taxes, state revenue and federal revenue, per district documents. It shows that expenses will total about $269.2 million, which includes costs for
MISD historical tax rate
McKinney ISD's tax rate has been decreasing since scal year 2021-22.
$1.5
$1.37
$1.31
$1.27
$1.12
$1.10
“The reduction from the state continues to reduce the M&O tax rate. That’s going to continue to happen each year.” MARLENE HARBESON, MCKINNEY ISD CHIEF FINANCIAL OFFICER
$1
$0.5
$0
Fiscal year
SOURCE: MCKINNEY ISD COMMUNITY IMPACT
Looking ahead
sta ng, transportation, recapture and more. As a result of estimated expenses exceeding projected revenue totals, district o cials are estimating a $7.5 million shortfall next scal year, per district documents. McKinney ISD’s bond issuance is complete, and the district is expecting to do a refunding in August, which will increase interest savings, Harbeson said. “Right now our preliminary projections for refunding [bonds] will end up saving us anywhere from $3 [million] to $4.5 million in interest,” Harbeson said.
McKinney ISD is also predicting a $500,000 increase in recapture, Harbeson said. Recapture involves districts with excess local revenue paying into a fund for other districts, according to the Texas Education Agency. The district received certi ed property value estimates April 7, which Harbeson said can be used to more accurately project the next year’s budget.
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