As McKinney ISD gears up for summer break and next school year, district leaders once again find themselves walking a financial tightrope, grappling with a multimillion-dollar budget shortfall even as they work to lighten the property tax load for local homeowners.
During a May 12 board meeting, the district evaluated a financial outlook for the coming fiscal year. The proposed budget includes $258.9 million in revenue and $265.8 million in expenditures, leaving a projected $6.9 million shortfall.
This follows the previous year’s deficit of $17.1 million, offset by drawing from the district’s fund balance. That reserve is projected to stand at $86.8 million by the end of the 2024–25 fiscal year.
Inflation and Flat Enrollment Strain Finances
At the meeting, district officials emphasized that McKinney ISD isn’t to blame for the budget shortfall. Instead, they pointed to rising operational costs and inflation outpacing stagnant state funding. They also cited reductions in federal support for certain programs and flat student enrollment as added pressures straining the district’s finances.
“The deficit budget is not the result of financial mismanagement or a lack of proper budgeting, but a result of pressing needs related to inflationary double-digit price increases, including salary increases for teachers and staff and higher operational expenses, with no new funding to address them,” the presentation said.
Tax Rate Set to Drop Again
Even amid the financial shortfall, the district plans to reduce its property tax rate. The proposed rate for FY 2025–26 is $1.0780 per $100 of assessed valuation, down from $1.1252 the year before. That nearly five-cent decrease is made possible by growth in local property values, which are projected to rise by more than 10%, from $28.35 billion to $31.4 billion.
McKinney ISD has been steadily reducing its tax rate over the past few years. In 2023, the district approved a significant cut, dropping the rate from $1.3129 to $1.1275, a reduction of 18.5 cents. The rate saw a modest decrease again in 2024, settling at $1.1252.
As the district navigates the year ahead, balancing fiscal responsibility with educational investment will remain a top priority for trustees and administrators.
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