Houston ISD officials painted a slightly rosier budget outlook again on Friday, which could mean fewer employee layoffs as the district tackles a looming deficit.

HISD administrators said they reduced the district’s projected deficit from $115 million to $82 million after receiving better-than-expected revenue projections and new information from Austin regarding state funding for HISD. It is the second time HISD officials have trimmed the deficit projection since January, when district leaders forecast a $208-million shortfall.

HISD Chief Financial Officer Rene Barajas said district leaders are reducing the projected deficit again after receiving word last month regarding tweaks to the state’s education funding formula, which will result in more money for the district. On top of that, HISD officials are expecting slightly more revenue from a few sources, including the district’s investment income, and an increase of at least 1 percent in property tax collections. District leaders originally had projected a 3 percent decline in property tax revenue due to Hurricane Harvey, though they cautioned the projections were conservative.

“The budget is just always expanding and contracting all the way through as little things pop up,” Barajas said.

Facing a lower deficit, HISD likely will have to cut fewer jobs in the coming months, though it remains to be seen how those reductions will be distributed.

To close the $82 million shortfall, HISD administrators are recommending about $34 million in cuts at the campus level, which includes teachers, principals and instructional support staff, and another $28 million in cuts to off-site departments, such as maintenance and central administration. Those amounts reflect a 3 percent reduction in campus-level funding and a 10 percent reduction for departments.

Barajas said administrators are holding back recommendations on the remaining $20 million in expected cuts, hopeful that their revenue projections will continue to improve. HISD has been notified the district’s property values went up 2 percent this year, but budget officials are basing revenue projections on a 1 percent increase because many valuation appeals are expected due to Hurricane Harvey.

HISD trustees, however, ultimately are responsible for approving the district’s budget and financial priorities. Board members are meeting Monday for a budget workshop, and are scheduled to vote on the spending plan June 14.

HISD officials expect most of the campus-level reductions will be made through teacher attrition — the district loses about 2,000 of its nearly 12,000 teachers per year — and a small number of layoffs. They did not know Friday how many layoff notices would be issued.

Zeph Capo, president of the Houston Federation of Teachers, said he believes about 50 members of his 5,000-person union have received layoff notices in recent months. He said union members initially expected significantly more job cuts, though the uncertainty around this year’s budget made it difficult to predict.

“It was a really weird year, because who knows what to expect with the hurricane and tax changes?” Capo said.

Houston Educational Support Personnel President Wretha Thomas said her 1,250 union members, who include bus drivers, custodians, food service staff and maintenance workers, have not been notified of any potential layoffs.

“HISD should start cutting from the top and leave the blue-collar workers alone,” Thomas said. “They’ve cut from us so much, there’s nothing left to cut.”

jacob.carpenter@chron.com

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