How did Pearland ISD end up with a budget surplus while other school districts are facing deficits?

PEARLAND, Texas (KTRK) — While multiple school districts in southeast Texas face budget deficits, Pearland ISD is projecting a $4.1 million surplus for the upcoming fiscal year. What strategies did they implement to stay in the green, and how will they use the extra funds?

When Larry Berger became superintendent of Pearland ISD two years ago, he was aware of the financial challenges ahead. He credits the voters for helping the district remain financially stable.

In November, voters approved an increase in the district’s maintenance and operations tax rate, which funds salaries, classroom supplies, and more. This required a Voter-Approval Tax Rate Election (VATRE) as mandated by state law. The passage of this measure added $11.2 million to the budget.

Additionally, in May, voters approved two bonds that provided further financial support. A $30 million technology bond will fund computers, classroom equipment, labs, and more, while a $75 million infrastructure bond will cover electricity, HVAC, plumbing, and other needs in schools and district facilities.

“These strategies have been key to achieving financial stability. Our community showed their support by voting for these propositions, and that’s reflected in our budget,” Berger said. “The number one reason we’re successful is the support of our community.”

The surplus has enabled the school board to approve a two percent salary increase for staff, paraprofessionals, and teachers. Additionally, $2 million will be allocated to the capital renewal plan, and the remainder will go into a general operating reserve, essentially a rainy-day fund.

This situation contrasts with other districts like Houston, Spring, Katy, Tomball, Conroe, and Spring Branch, which are facing budget shortfalls. What has kept Pearland ISD in a better financial position?

Duncan Klussmann, assistant clinical professor at the University of Houston, explained, “Districts that managed the transition better after their federal pandemic funds (ESSER) expired are in a better situation now than those that spent heavily on personnel costs.”

Berger echoed this sentiment, noting that Pearland ISD used ESSER funds for expenditures rather than staffing. However, he acknowledged that the $4.1 million surplus is small compared to the overall $290 million budget, and challenges lie ahead.

One major challenge is the basic allotment amount, the per-student funding from the state, which has remained at $6,160 since 2019. “The legislature had a chance to increase this amount last session, but it was tied up in the voucher debate. If they don’t act soon, many more districts will struggle,” Klussmann said.

Additional challenges include inflation, which is driving up costs for facilities, operations, equipment, technology, personnel, and more. Another concern is the potential plateau or decline in student enrollment, especially with a new free K-12 charter school, International Leadership of Texas, set to open in August.

“The surplus is only a short-term solution. Our three-year projection shows we could be back in a budget deficit by 2025-2026,” Berger said. “Inflation is out of control, and our expenditures will quickly consume the surplus.”

ABC13 has repeatedly contacted Governor Greg Abbott’s office regarding public school funding but has received no response.

Pearland ISD will hold its next public board meeting on the district budget on June 11.