The El Paso Independent School District is now grappling with a $52.8 million deficit that could spur deep cuts.
The district presented an update on its financial status during a Tuesday, May 19, regular session of the Board of Trustees, outlining the circumstances affecting the district’s budget and the comprehensive steps being taken to secure long-term financial stability.
“The goal is not simply to balance a budget for one year,” EPISD Superintendent Brian Lusk said during the meeting. “The goal is to introduce controls and processes that have been lacking in order to build a stronger and more sustainable financial foundation that allows El Paso ISD to continue serving students at a high level into the future.”
How large is the EPISD deficit?
According to the district, current estimates project a funding gap of approximately $52 million for the current year, including a previously adopted $6 million deficit included in the 2025-26 budget.
Why does EPISD have a deficit?
Officials shared that the district is facing a financial shortfall driven by rising operational costs, declining enrollment-related funding, inflation, changes in state funding, and concerns about prior budget assumptions and projections.
District leadership also acknowledged that part of the challenge stems from insufficient financial systems, internal controls, and operational processes that are now being reviewed and strengthened as part of the district’s long-term stabilization efforts.
What does the deficit mean for EPISD employees?
During the presentation, leadership outlined several immediate and long-term strategies to improve the district’s financial outlook, including cutting areas of the district budget and possibly shedding positions as part of multi-year financial planning.
The district also confirmed that, as part of its response, it is working with independent external and internal auditors to conduct a comprehensive review of the district’s financials, validate assumptions, and help guide the development of a long-term recovery plan.
The district is currently identifying interim financial leadership while Deputy Superintendent David Bates oversees the finance department during the transition.
Can a school district declare bankruptcy?
MoakCasey, an Austin-based public school consulting firm, the district hired to conduct an audit this month, noted the district should consider declaring financial exigency.
The move is similar to bankruptcy for educational institutions. It involves developing and implementing a stabilization plan that may include mass layoffs in response to an unexpected budget shortfall for the current school year.
How long has the district been facing financial difficulties?
Even as far back as December, Lusk addressed the district’s budget issues and characterized them as having concrete solutions.
“We can all agree that school districts are having a financial challenge,” he told the El Paso Times in December 2025. Everything I’ve seen with El Paso educators in the district places students in the center. If we can continue to do that, that financial challenge will be a brief obstacle that we can figure out.”
At that time, despite boosts in state funding approved by the Texas Legislature under House Bill 2, the board unanimously adopted a $541.2 million budget with a $6 million deficit for the 2025-26 school year. EPISD also continues to grapple with declining enrollment.
Kristian Jaime is the Top Story Reporter for the El Paso Times and is reachable at Kjaime@elpasotimes.com.
This article originally appeared on El Paso Times: El Paso ISD grapples with $52.8 million deficit, considers major cuts
Reporting by Kristian Jaime, El Paso Times / El Paso Times
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