Houston ISD’s state-appointed superintendent Mike Miles is pushing a sweeping money makeover for the district, and it starts with how every campus gets funded and how every teacher gets paid. At a late-April budget workshop, Miles rolled out a plan that would peel teacher salaries out of individual school budgets, tie next year’s pay to a new evaluation system and add a $500 "academic need" bump for certain high-need campuses. All of it is landing as HISD tries to manage shrinking enrollment while shaping a roughly $2.1 billion draft budget for 2026-27.
How the funding formula would work
Under the proposal, a school’s funding would start with a $1,400 base amount, multiplied by the campus’s projected enrollment and average daily attendance. On top of that, schools would receive targeted dollars for bilingual and special education students. Salaries and benefits, however, would live in a separate line item, away from campus-controlled budgets. That move is designed to let the district centralize payroll for its new pay-for-performance model and match staffing to evaluation results. As detailed by the Houston Chronicle, it would also mean some principals lose levers they’ve long used to shape their own teams.
Who would get the academic-need subsidy
Miles wants to tack on a $500-per-student "academic need" subsidy for New Education System (NES) campuses and other special-focus schools that serve higher-need students, routing a modest extra pot of money to the kids he says need it most. He has pitched the subsidy as a cousin to magnet funding, meant to shore up instructional muscle where outcomes are lagging. According to Community Impact, HISD has a second budget workshop on the books for May 20 and is expected to bring a roughly $2.1 billion final budget to the board for a June vote.
What pay-for-performance will mean
Next year’s teacher paychecks would be built on this year’s evaluation scores, affecting more than 10,000 educators now being rated under the new system. The district would budget each campus for its teachers’ expected average salary multiplied by the number of teachers. Miles offered one example: a school with an $83,000 average salary and 50 teachers would be budgeted about $4.15 million for salaries. As reported by the Houston Chronicle, HISD says it will pick up the tab if evaluation outcomes push actual payroll above that budgeted amount. If scores lead to lower pay than projected, though, campuses would have to send the extra money back to the district.
Campus leaders raise alarm over limits
Not everyone is thrilled with the fine print. Elected trustee Michael McDonough and several principals warned that the new formula could box in school leaders and leave them with fewer on-site resources, even if their campuses technically earn more funding. The district is floating caps for 2026-27 that would limit any campus budget increase to 4% and any decrease to 1%. Critics argue those caps could erase the rewards for schools that boost enrollment or attendance. As reported by Community Impact, McDonough said the plan "tells campus leaders: 'You did the work, you generated the funding, but you don't get to keep it.'"
Next steps and what to watch
The late-April budget workshop, posted on HISD’s official calendar and held at the Hattie Mae White Educational Support Center, gave district leaders a chance to walk through draft numbers and trade-offs in public. The work continues in a second workshop, and the Board of Managers is expected to consider final adoption in June. The official agenda and notices are available on HISD's Legistar portal. Between now and then, principals, teachers and parents will be watching how the pay-for-performance rules, budget caps and academic-need subsidy collide to shape what actually lands in each school’s bank account next year.
