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Houston ISD Superintendent Mike Miles suggested Tuesday that the district wastes hundreds of millions of dollars each year by purchasing unneeded contracted services, allowing employees to abuse overtime pay and failing to fix inefficiencies in its transportation system.
District officials released an “efficiency report” Tuesday detailing what Miles described as “dysfunction” in the HISD’s central office, transportation systems, maintenance practices and more.
The report offers the first concrete look at how Miles intends to balance next year’s budget, which will require cutting over a quarter-billion dollars of deficit spending this year plus offsetting expensive new programs as he continues to scale up his overhaul of HISD. Teachers at over 100 schools next year are set to receive raises of roughly $10,000 to $20,000 — what HISD says are the highest salaries at any Texas public school district — as they join his transformation model.
Miles declined to name a dollar amount that he believes HISD can save through addressing the inefficiencies named in the report, but he said they would be enough to plug budget holes, which suggests the total may be in the hundreds of millions of dollars.
“We will save enough money to pay for the reforms that we need to put in place,” Miles said.
Miles, who was appointed by Texas Education Commissioner Mike Morath in June, has repeatedly claimed previous HISD administrations poorly managed the district’s roughly $2 billion budget. He said the issues identified in the Tuesday report represent “normal dysfunction” for large, urban school districts, but at a concerning scale. The structural issues behind the inefficiencies have persisted for years, or even decades, he said.
“I think the level (of inefficient practices) here was higher than I expected,” Miles said. “There was some level of, ‘Wow, this is worse than a typical urban district.’”
Miles cited examples including:
- About 1,000 people remained on HISD payroll after they no longer worked there, some for several years. Only a handful continued to receive paychecks.
- Spending about $20 million on 175 school buses he said HISD didn’t need.
- Running buses under capacity, resulting in per-student transportation costs about five times higher than the national average — roughly equivalent to the cost of each student taking an Uber or Lyft to and from school.
- Spending $26 million on overtime pay, with 650 employees last year accruing overtime hours exceeding 30 percent of their earnings.
- Overspending on contracted services. HISD planned to spend about $300 million on contracted services last year, according to budget documents. Miles said he will cut $50 million for the 2024-25 budget.
Miles did not provide a detailed breakdown of changes he plans to make or evidence backing up some of the claims. For example, Miles did not name specific contractors that he believes are unnecessary.
HISD officials also did not explain why their data shows a dramatic, previously unreported decline in bus ridership, which contributed to their calculations showing transportation inefficiencies. Miles' report suggests HISD's bus ridership has dropped 65 percent since 2018-19, when the Legislative Budget Board said about 25,000 students took the bus each day. Data published by the state shows buses traveled about 35 percent fewer miles between 2018-19 and 2022-23.
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Former HISD elected trustee Judith Cruz, who held her post from January 2020 until January 2024, agreed the district needs streamlining. When she learned of Miles’ efficiency plans, the key issues such as inefficiencies in transportation and high levels of spending on contractors rang true, she said.
“When I read those headlines, I was like, ‘Yeah, these are basically the problems that were shared with us by (former HISD) Superintendent (Millard) House’s administration,” Cruz said. “These things need to be addressed.”
In 2018, HISD’s school board requested a third-party review of the district’s operations from the Texas Legislative Budget Board, seeking to identify ways to streamline its expenditures. A year later, the legislative committee released its findings: HISD could save up to $237 million over five years — less than $50 million per year — if it undertook a number of efforts to restructure operations, including closing as many as 40 underutilized schools.
Miles acknowledged the 2019 report raised many of the same problems and possible solutions that his team identified in the efficiency report, but said his plan will spur savings at a larger scale.
In 2021, two years after the release of the budget board’s report, HISD leaders said they had saved roughly $6.7 million over two years, a fraction of the projected savings, by implementing some of its recommendations.
Miles has previously overstated the extent of his cost-saving measures when, in July 2023, he said his team had cut over 2,300 jobs from central office, including eliminating roughly 670 occupied positions. A Abdelraoufsinno investigation, however, found Miles had only let go of about a third as many employees as he said he had, while increasing the pay for the upper echelons of district administrators.
When a reporter asked Miles about the overstated central office cuts during a Tuesday press conference, Miles downplayed the exaggeration.
“What does it matter whether there's 2,000 or 2,100 (cuts)? I will get the mission accomplished by cutting the people that we need to cut,” Miles said.
HISD Board President Audrey Momanaee said she anticipates the findings of the efficiency report will be helpful as the board reviews the district’s 2024-25 budget, which Miles said he will present to the board in May. The district must approve its budget by the end of June under state law.
“Superintendent Miles and his team have been focused on improving outcomes for our students and this report is another step in making progress to that end,” Momanaee wrote in a text message.
HISD's per-student spending has been roughly in line with Texas' other largest school districts in recent years, according to school district financial data published by the state. The district spends less per pupil than the Dallas Independent School District, but more than Katy or Cypress-Fairbanks independent school districts, which both serve smaller shares of low-income students.
Asher Lehrer-Small covers Houston ISD for the Landing and would love to hear your tips, questions and story ideas. Reach him at [email protected].
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