Prosper ISD is delaying its newest middle school by a full year to help close a $25.1 million budget gap. The district has also halted construction on two planned elementary schools as enrollment growth slows.

The board of trustees voted to push Dr. Drew and Kristen Watkins Middle School from fall 2026 to the 2027-28 school year at a Nov. 17, 2025, meeting. The delay defers roughly $9.8 million in salaries and operational costs, Community Impact first reported. Construction on the district's 21st and 22nd elementary schools has also been halted because of lower enrollment projections, though the schools have not been publicly identified.

The $113.77 million Watkins campus is now slated to open for the 2027-28 school year alongside a new administrative building.

What's driving the shortfall

Prosper ISD added about 1,800 students in 2025-26, roughly half the growth rate of the prior year. That slowdown reduced state funding tied to enrollment growth. Bill McLaughlin, then deputy superintendent, linked the trend to a cooling Dallas-Fort Worth housing market at the November 2025 meeting.

"We began to receive information that the housing market in the DFW area had begun to slow down," McLaughlin said. "It's not a 1-to-1 correlation, but housing starts and housing closings are a big driver of our overall student enrollment."

McLaughlin now serves as acting superintendent.

The district's fast growth allotment, a state payment that rewards districts adding students, is projected to drop from $33.6 million in 2026-27 to $15.2 million by 2029-30, Chief Financial Officer Keri Croy told the board. Community Impact reported that recapture payments to the state will rise from $2.5 million in 2026-27 to more than $6.4 million by 2029-30.

How the district is responding

The board approved the 2026-27 budget 7-0 on June 16, with projected expenses of $433.4 million against $408.3 million in revenue. The $25.1 million gap will be covered by the district's existing fund balance, according to PISD's board meeting recap.

District leaders identified $21.5 million in savings through the Watkins delay, staffing model adjustments and cuts to department and campus budgets. Personnel expenses account for 80.3% of the total budget at $347.9 million.

Additional cost-cutting measures include a 30% reduction in department budgets, contract audits, a travel freeze for central office staff and staffing evaluations. Croy said at a July 20 board meeting that the goal is to absorb cuts at the central office level so campuses are shielded.

The shortfall is projected to grow to $28.4 million in the general fund by 2027-28.

Two new campuses did open

Despite the belt-tightening, Prosper ISD opened two campuses on Aug. 11 using 2023 bond funds. Jim Bridges Middle School, the district's seventh middle school, held its first day of classes. Judy Rucker Elementary School relocated to a new $59.51 million campus.

Voters approved the $2.7 billion bond in November 2023, during a period when enrollment had more than tripled over the prior decade. The bond has now fully or partially funded five campuses: three elementary schools, one middle school and one high school.

The next regular school board meeting is Monday, Sept. 28, at 7 p.m. at the PISD Board Room, 605 East Seventh St., Prosper.