Kerrville ISD faces $2.7 million deficit as enrollment decline deepens

Kerrville ISD trustees received a sobering look at the district’s finances Monday, as Assistant Superintendent Jarret Jachade presented a 2026-27 budget carrying a projected $2.69 million deficit — and pointed to a South Texas district that nearly ran out of cash as a warning of where unchecked shortfalls can lead.

The presentation, the fourth budget update trustees have seen this year, referenced Crystal City ISD, where an interim superintendent recently told families the district had less than $500 in the bank and moved to terminate 72 employees amid an “imminent financial collapse.” Kerrville’s numbers are nowhere near that dire, but the comparison framed the message Jachade brought to the board: the district is spending more than it takes in, and enrollment losses are accelerating the problem.

A narrowing, but stubborn, gap
The latest figures project a $2,687,325 shortfall for the 2026-27 school year, with total spending of about $50.3 million against $47.6 million in revenue. That gap is smaller than earlier drafts — the second budget update pegged it at $4.85 million and the third at $3.8 million — reflecting cuts and revised projections since the spring.

The improvement came from two directions. The district trimmed its general operating budget by about $1.45 million, largely by reducing payroll, its single biggest expense, from about $40.5 million in the second draft to $38.95 million in the latest version. At the same time, projected state aid rose across the updates, from $19.7 million to $21.4 million. Notably, the gap did not close because more is coming in from local taxpayers: projected current-year property tax collections were revised downward across the three drafts, from $24.8 million to $23.9 million.

The district is also carrying a deficit in its current 2025-26 budget of just under $1.94 million.

To bring staffing in line with a smaller student body, the district outlined enrollment-based staffing adjustments totaling 20 full-time positions — 13 at the elementary level, five at Tivy High School and two at the district level.

Trustees are scheduled to adopt a final budget at their Aug. 17 meeting. The district plans to continue finalizing staffing decisions and to hold community feedback sessions in August.

Enrollment keeps falling
Behind the financial pressure is a steady decline in student enrollment. As of the state’s Oct. 31 enrollment snapshot, Kerrville ISD counted 4,412 students in grades PK-12 — a third consecutive year of decline and a drop of 7.7%, or 369 students, over the past five years. Over the past decade, enrollment has fallen 12.2%, a net loss of 612 students from a 2015 peak of 5,024. Because Texas funds districts largely on attendance, fewer students means less state money.

Jachade also flagged the state’s new education savings accounts as a factor, presenting data on student applications by district. The accounts, which give participating families about $10,474 to spend on private or alternative options in 2026-27, represent a fresh source of competition for the students — and the funding — that districts like Kerrville depend on.

New parental-rights law takes effect
Assistant Superintendent Shelby Balser gave trustees their first look at what Senate Bill 12, passed during the 89th legislative session, will require of the district beginning in 2026-27.

The law directs districts to notify parents of their rights regarding health care, health-related services and school counseling, and to give families the chance to opt their children out of a range of services. Those include monitoring of chronic conditions such as asthma and allergies; vision, hearing and scoliosis screenings; lice and diabetes screenings; and counseling tied to mental or emotional health, substance abuse and suicide prevention. Consent forms will go out through annual enrollment paperwork, and parents may modify, revoke or reinstate consent at any time in writing.

The law also spells out exceptions where parental consent is not required, including emergency care, general caretaking, law enforcement or family-services activity, and behavioral threat assessments. Under Texas Family Code section 32.004, a student may consent to counseling on their own for issues including suicide prevention, chemical dependency and physical, sexual or emotional abuse.

Separately, SB 12 requires districts to certify each year that they comply with certain state laws — including the prohibition on diversity, equity and inclusion practices — starting in 2026-27. Kerrville ISD updated the relevant local policies in January, Balser said, and reported no changes to programs or trainings and no associated cost savings. Monday’s presentation was informational; trustees will be asked to approve the compliance certification by majority vote on Aug. 17.

A virtual school pathway at Hill Country High
Assistant Superintendent Sandra Mouton presented plans for a new virtual school program set to launch this fall for 11th and 12th graders, housed at Hill Country High School.

The pilot is another response to the same forces squeezing the budget. A separate state law, Senate Bill 569, repealed the Texas Virtual School Network and now lets districts run a full-time online program inside an existing campus without separate state authorization, as long as it stays under 50% of that campus’s enrollment. Virtual students generate the same state funding as those in classrooms — money the district would otherwise risk losing to online programs run elsewhere.

“Families across the Hill Country are already choosing online options,” the district’s presentation noted. “The only question is whose program they choose.”

Under the plan, Kerrville ISD’s own certified teachers would serve as teachers of record using a TEKS-aligned, TEA-approved digital curriculum, rather than an outside vendor. Students would enroll first at Tivy High School for a transcript review before transferring to Hill Country High School, attend a weekly virtual office visit with a program assistant, and take state tests in person at a designated district site. Virtual students would not be eligible for UIL activities such as athletics or band, and the district stressed the program is an academic choice open by application — not the alternative school.

Registration for the fall runs July 27 through Aug. 19, with no late enrollment afterward. A parent and student information session is set for July 28 from 5:30 to 6:30 p.m. at the B.T. Wilson Library. The district plans to expand the program to grades 4-12 in 2027-28, with the possibility of a full K-12 virtual academy in later years. Amy Ahrens, director of secondary education, is the point of contact.