Canyon ISD is in its fifth consecutive deficit budget year

On Aug. 27, the Canyon ISD Board of Trustees adopted the district’s 2026 tax rate and fiscal year budget. This year’s budget estimates the district will spend about $5.35 million more than it takes in.

The Amarillo Tribune sat down with Canyon ISD Superintendent Dr. Darryl Flusche to learn how the district entered a deficit budget and how it’s working through it. Flusche said a deficit budget doesn’t mean all spending is frozen, but budgets have tightened across every department and school. While some spending areas are reduced, some spending is protected, like sending students to state competitions if they again earn their way there.

“No, it’s not that we won’t be able to continue to buy the trash can liners, the books for the classroom, the instructional materials, the replacement Chromebooks for those grades that have Chromebooks will still be able to do those things, but we’re just tightening up further on things that we need to do.”

Local school district budget years begin in September and run through the end of the following August. In the 2018/2019 school year , Canyon ISD operated with a relatively small budgeted deficit, just over $500,000.

In 2018, Canyon voters approved a $196.7 million bond, which funded renovation and improvement projects and the construction of the Heritage Hills Elementary, Spring Canyon Elementary, and West Plains High School campuses. Flusche said that even before he arrived in 2015, the district had been saving money to cover these schools’ opening costs that weren’t included in the bond.

“Because when you open a new school building, there are new staff costs related to that,” Flusche said. “It’s not necessarily that we hired all brand new teachers, because what we did is we dispersed kids that we had into buildings that were not quite as full and overcrowded, and in portables, but we also have the unduplicated expenses of staff. Whether it’s custodians, librarians, principals, assistant principals, news office secretaries, things that you can’t just divide and take.”

Flusche said the district knew the additional cost would be about $5 million, and planned for that expense to continue until student enrollment balanced it out.

“What we didn’t predict is COVID. We didn’t predict a 40% increase in all kinds of supplies and inflation, as well as tripling of insurance costs,” Flusche said. “Those are the things we didn’t predict, as well as that state funding stayed relatively flat. That is why we went from an okay place, even though enrollment still grows, to no additional funding and expenses far exceeding the money we had to work with due to inflation.”

Canyon ISD’s 2026 tax rate at $0.9154 is technically lower than last year’s rate of $0.9272. Because property values increased—something taxing entities don’t control—the rate still raises around $2.4 million more for the district than last year.

At a workshop before the Aug. 27 meeting, Canyon ISD Chief Financial Officer Lela Vela told the board that the district could have adopted a higher rate through interest. However, the district ended up qualifying for an unexpected State allotment last year, so it kept the interest side down.

Consecutive budget deficits began in the 2021/2022 school and fiscal year, when expenses were estimated to exceed revenue by about $2.2 million. In 2023 and 2024, Canyon ISD proposed a tax rate election to voters. Voters did not pass the measure either year, and the district hasn’t proposed one since.

Those expenses creating a budget deficit come out of the district’s fund balance, which is like a savings account. Vela said in August, the district must keep a balance equal to 20% of its annual operating expenses, or at least $24 million to cover $120 million in annual expenses. The district’s fund balance as of last August was $49 million; Vela conservatively estimated that the audited deficit for last fiscal year will be around $5.8 million.

Canyon ISD is one of the few districts in the Panhandle where enrollment is increasing , not declining. Since fall 2021, the district has gained over 850 students.

Higher enrollment means more State funding based on the previous year’s average daily attendance. HB 2 , which passed in 2025, raised the basic allotment by $55, going to $6,215 per student. Flusche said expenses have increased more steeply than enrollment funding.

“If you imagine that every time we grow, give or take 20 students, well, that’s another classroom teacher expense, another classroom set of supplies, another classroom where we have the lights on and we got to provide the teacher technology, and so those expenses continue,” Flusche said.

He said the costs to insure campuses, buses, and other school vehicles have more than tripled since 2019, going from around $600,000 per year to nearly $2 million. In the past six months, the cost of the trash can liners used in each of Canyon ISD’s school cafeterias has gone up 40%; Flusche said that cost increase applies to many of the supplies each school needs to operate.

After the second tax rate election failed, Flusche said Canyon ISD told its constituents it would have to reduce expenses across the district.

“We did that because a human being in their own household cannot live off of just taking money out of your savings account. Eventually, it depletes, and then you’re insolvent. The same is true for a school district,” Flusche said. “And although we have a healthy fund balance, we’re stable. You cannot continue to live and take $4 million, or $5 million, or $6 million a year out of a healthy savings account because then it’s not healthy anymore.”

Canyon ISD hoped the 89th Legislative Session in 2025 might make a difference by raising public school funding. Lawmakers appropriated $8.5 billion to fund schools and public education: over half went to teacher pay raises, and the rest addressed specific expenses, like safety and security. Funding was not appropriated for raises to other school professionals, like principals and counselors, and supply and insurance costs continued to rise.

Flusche said that last November, he asked all district administrators—principals and department leaders—to determine where they could cut costs. Each department, he said, determined its own priorities and identified how to cut budgets by 6%.

As we previously reported , some of those cost reductions include limiting school band travel out of Potter and Randall counties, and replacing some librarians who left the district through normal attrition with paraprofessionals.

“As people left our district for any reason—retirements, stayed home with baby, spouse got transferred—then we really evaluated whether those positions could be absorbed or not,” Flusche said. “Another expense that we felt like had to be curtailed was staff travel for professional development reasons. Whether it’s a professional development conference or training, we had to reduce that expense because that doesn’t touch the classroom, at least in a direct way.”

Flusche said people who wanted to stay with the district still had jobs. Around 40 teaching positions were not filled after teachers retired or left the district. Flusche said position absorption started around three years ago with administrative staff before it was used with campus staff.

“That continues to happen, and people work early morning hours and late hours, well beyond what has occurred in the district for the past 20 years,” Flusche said.

Flusche said he’s been asked why the district didn’t cut its football program, considering the cost of uniforms and stadium lights. Flusche said the short answer is that football brings in more revenue than it costs – plus, the athletics department had already determined its 6% budget cuts based on its own priorities.

In July , the Canyon ISD Board of Trustees approved a 2% pay increase for all staff, which costs about $2.3 million overall. Flusche commended the board for this choice, which brings district employees’ salaries to a more competitive range.

In July, Katharyn Wiegand, board president, said, “We know that our employees are the heart of this district, and it’s important that we show them that and do everything we can to retain them.”

This fiscal year budget also expands and enhances the district’s career and technical education programs, which give students opportunities to earn career certifications. Flusche said that a few years ago, about 12% of Canyon ISD students graduated with an industry-based certification. In May, 52% did.

This school year, the district launched Canyon ISD Connect , a monthly series of articles with information about the district. Links to published articles are posted on Canyon ISD’s social media pages .

“We are not out of a budget deficit. That means we have to continue to see how can we approach a zero or a minimal budget deficit instead of looking at potentially $5 million again the coming year. We’ll continue to evaluate that and be thoughtful with that; be intentional, be good stewards of our taxpayer dollars, because there’s a community expectation of the experience our students receive,” Flusche said. “We want to try to honor that as best we can without eliminating student experience.”

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