Katy ISD Approves $1.15 Billion Budget for 2025–26, Reviews Proposed Tax Rate
At its August 25 meeting, the Katy Independent School District (Katy ISD) Board of Trustees approved a $1.15 billion operating budget for the 2025–2026 school year, supported by a proposed property tax rate of $1.12. Trustees will take a final vote on the tax rate in September.
While new funding from House Bill 2 passed during the 89th legislative session did provide financial relief, Katy ISD officials explained that inflation, enrollment growth, and the lack of state cost adjustments have weakened the impact. The district is currently projecting a $24.9 million deficit, though Chief Financial Officer Christopher Smith told trustees that the shortfall is expected to shrink—or possibly disappear—over the course of the year through cost savings, underspending, and other efficiencies.
Supporting Teachers and Staff
Teacher and staff compensation remains a major focus in the new budget. HB2’s funding supported pay raises for some teachers, but early-career educators were excluded from the state’s program. To close that gap, Katy ISD used local dollars to provide those raises. All other employees, excluding administrators, received a 3% increase—1.3% funded by HB2 and 1.7% funded locally. Administrators also received a 3% increase, fully funded by the district.
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“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,” said Board President Lance Redmon.
Growth and Enrollment
This fall, Katy ISD opened two new elementary schools—Boudny and Cross—in the northwest quadrant, expanding the district to 80 campuses. Student enrollment climbed by more than 500 students compared to last school year, representing a 0.5% increase. At the same time, the district’s tax base decreased by 2.1%. Despite these challenges, officials emphasized that Katy ISD continues to offer competitive salaries and healthcare benefits.
Tax Relief and Local Impact
During the August work study session, CFO Christopher Smith explained how state-funded tax compression and property tax relief efforts are expected to ease burdens for homeowners. One major change is the proposed increase to the state’s homestead exemption—from $100,000 to $140,000 for most homeowners, and $200,000 for seniors and disabled Texans. That proposal will be on the November ballot, and if approved, would reduce tax bills beginning this school year.
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Proposed Tax Rate for 2025–26
- Maintenance & Operations (M&O): $0.7271
- Interest & Sinking (Debt Service): $0.3900
- Total Tax Rate: $1.1171
As Katy ISD continues to navigate financial pressures from rapid growth, state funding formulas, and inflation, trustees emphasized their focus on protecting classroom instruction and supporting educators while balancing taxpayer concerns.
Stay with My Neighborhood News for updates as the Board finalizes the 2025–26 tax rate in September.
Tiffany Krenek has been on the My Neighborhood News team since August 2021. She is passionate about curating and sharing content that enriches the lives of our readers in a personal, meaningful way. A loving mother and wife, Tiffany and her family live in the West Houston/Cypress region.
