Katy Independent School District Board of Trustees has approved its operating budget for the 2025-26 fiscal year.
The $1.15 billion budget is supported by a proposed tax rate of $1.12. The board reviewed the tax rate earlier and plans to formally approve it next month.
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The budget, approved at Monday’s board meeting, will support services for a projected 97,000 students across the district’s 80 campuses.
Enrollment increased by more than 500 students, or 0.5%, compared to last year. Meanwhile, the district’s tax base declined by 2.1%, adding financial strain.
Despite additional state funding under House Bill 2 during the last legislative session, district officials said rising costs, rapid enrollment growth, and a lack of state-funded cost adjustments in recent years have left Katy ISD facing a projected $24.9 million budget deficit.
Chief Financial Officer Christopher Smith said the deficit is likely to shrink over the year through cost-saving measures, underspending, and operational efficiencies.
“The budget is a backstop,” Smith explained. “We don’t typically spend the entire amount that’s approved.”
The new budget also includes pay increases for district employees. All teachers and staff, excluding administrators, received a 3% salary increase—1.3% from state funding and 1.7% from district dollars. Administrators also received a 3% raise, funded entirely by the district.
“As our district grows and costs continue to rise, we remain committed to being responsible with our resources, supporting our dedicated teachers and staff, and ensuring students continue to receive the high-quality education our community expects,” Katy ISD Board President Lance Redmon said in a statement announcing the budget.