McKinney ISD Approves Budget With $5.8 Million Shortfall, Still Raises Teacher Pay

McKinney ISD's board of trustees unanimously adopted a 2026-27 budget on June 29 that projects a $5.8 million shortfall in the district's general fund, with expenditures of about $282 million outpacing roughly $276 million in expected revenue. Despite the gap, the board approved 3.5% midpoint salary increases for teachers and staff for the coming school year.

District officials pointed to a combination of factors behind the shortfall: state-mandated tax rate compression, slowing growth in local property values, and a more than 6% increase in recapture payments — the state's "Robin Hood" system that redistributes local property tax revenue from higher-wealth districts — which are expected to rise by nearly $8 million. To cover the gap, the district's fund balance is projected to drop from $91.5 million to an estimated $85.6 million over the course of the year.

The budget also reflects a drop in the district's overall property tax rate, from $1.1043 to $1.0528 per $100 of assessed value, driven largely by continued declines in the interest and sinking portion of the rate used to pay down district debt. "We have steadily been bringing the rate down since 2015, and we continue to do so," McKinney ISD Chief Financial Officer Marlene Harbeson told the board.

Superintendent Shawn Pratt was blunter about the district's broader financial position, telling trustees that the current approach of absorbing shortfalls by drawing down reserves amounts to "not sustainable policies" if state funding formulas don't change. McKinney ISD's situation mirrors that of many fast-growing Texas districts, which have increasingly found themselves squeezed between rising costs, recapture payments, and a per-student state funding formula that hasn't kept pace with inflation.