Katy ISD stands to lose about $5.3 million in state funding this school year under Texas's new voucher program, a watchdog report released Thursday, Oct. 1 estimates.

The projected loss is tied to roughly 640 students leaving the district through the Texas Education Freedom Accounts (TEFA) program. Lamar Consolidated ISD faces a $3.6 million hit from about 430 departing students, the Houston Chronicle reported, citing the same data. Lamar CISD said it would not need to make budget changes because it had already planned for the enrollment declines.

The statewide figures are larger.

The report, published by anti-voucher groups Our Schools Our Democracy and Every Texan, estimates Texas public schools will lose a combined $300 million this year under the TEFA program. Houston Public Media first reported the findings. At least 184 districts will lose a combined $227 million, and another 549 districts face an estimated $67 million in losses.

Each student who leaves a public school costs the district roughly $8,000 in state funding, the report estimated. Texas Comptroller data shows 30% of voucher recipients were previously enrolled in public schools.

For Katy ISD, which approved a $1.17 billion general operating fund budget for 2026-27, the $5.3 million loss represents less than half a percent of total spending. But Dee Carney, executive director of Our Schools Our Democracy, said districts cannot absorb those cuts easily.

"A public school district can't reduce expenses dollar for dollar when a student leaves with a voucher because many of those costs, such as transportation, utilities, insurance, teachers – those are fixed costs," Carney said.

The two local districts saw heavy application volume. Community Impact reported that 5,108 students in Katy ISD boundaries and 3,855 in Lamar CISD applied for TEFA accounts for 2026-27. As of a June district-level report from the Texas Comptroller, Katy ISD had 1,622 awarded applications, according to KPRC 2.

Lamar CISD officials told Community Impact that only a "minimal number" of students who withdrew actually went to private schools. The district, classified as "hyper-growth" by the Texas Education Agency, now serves more than 50,000 students across 62 campuses, Superintendent Roosevelt Nivens said at the Aug. 27 Katy Area Chamber of Commerce State of the Schools luncheon, the Katy Times reported.

Katy ISD did not comment on the report, the Chronicle reported. Superintendent Ken Gregorski said at the same Aug. 27 event that the district is focused on retaining families. Katy ISD has entered the TEFA program itself through its Legacy Virtual High School, which is approved to accept voucher funding from students statewide, ABC13 reported.

More than 60 Katy and Fulshear-area private schools have been approved to accept TEFA funding. Across the Houston area, 15 districts with more than 30,000 students may lose $52 million combined.

The TEFA program passed into law in 2025 and awarded more than 120,000 vouchers for 2026-27, with another 100,000 students on a waitlist. The next Texas legislative session begins in January 2027, when lawmakers will consider the Comptroller's request to double TEFA funding to $2 billion.