Arlington ISD has been forced to adjust to an unfamiliar problem, according to officials: budget deficits.
In June 2024, the school board adopted its 2024-25 budget with a $25.5 million deficit. Now, about halfway into the school year, officials are looking to stay on track with spending forecasts and find new cost-saving strategies.
These initiatives include limiting custodian overtime hours, cutting utility-related expenses and increasing daily student attendance, which is directly tied to state funding.
The district managed to cut costs in the 2023-24 school year, when it turned a projected $5.5 million deficit into a $1.5 million surplus, according to auditing numbers presented to trustees at a Dec. 12 school board meeting.
That’s a turnaround officials hope to replicate this year, at least in part.
“Districts that have been very financially responsible for a very long time like us have realized deficits for the first time,” school board President Justin Chapa said at the Dec. 12 meeting. “You saw a lot of change last year in districts’ financial positions that were in a lot of ways not really their fault.”
If Arlington ISD cannot shrink its spending gap, any deficit will be covered by the district’s $253 million in reserves, the district’s Chief Financial Officer Darla Moss previously told the Report. By October 2025, reserves were expected to drop to $228 million.
The district tries to keep its reserves above 16.67% of the general fund operating expenditures, or above $112.7 million over the next year.
“We would like to be in a different financial position and talking about different things,” Superintendent Matt Smith told trustees. “But I commend (officials) for rolling up their sleeves and trying to figure out the best way forward.”
Smith blamed the Texas Legislature for the deficits, saying the state does not fully fund schools. The district stays afloat thanks to its reserves, which is a result of local officials’ strategic saving over years, not money from the state, he said.
“That (reserve) amount does not indicate the financial position the state has put us in,” Smith said. “We have significant needs our legislators need to fund. I don’t want the message in the community to be that everything is just fine.”
As of Oct. 31, the school district had earned almost $99.3 million in revenue and spent $192.3 million.
“That’s one of the reasons we need to have a strong fund balance,” Moss told trustees. “We’ve spent a lot more money than we’ve received for this year so far.”
Officials expect to present an amended budget to trustees in early 2025, she said.
How is Arlington ISD addressing its spending gap?
The district breaks its policy wish list into three categories and lays out The district has reduced its $25.4 million deficit using the following strategies:
- Saving about $3.8 million in the department budget, mostly due to cheaper property insurance than expected.
- Spending about $10 million less in payroll due to more vacant positions than expected.
- Monetized real estate holdings.
To maximize revenue, the district has:
- Strategically used federal COVID-19 relief dollars, which expired in September.
- Adopted higher-than-expected tax rates that were determined by the state government.
- Increased student daily attendance.
Other possible reductions to the budget include:
- Paying less than expected in excess local revenue under the state’s recapture law
- Decrease in utility spending.
- Keep departmental overtime at a minimum by hiring more custodian workers.
Drew Shaw is a reporting fellow for the Arlington Report. Contact him at drew.shaw@fortworthreport.org or @shawlings601.
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