Austin Independent School District (AISD) is grappling with a staggering $92 million deficit, a situation attributed to several interrelated factors discussed in a recent government meeting.

The primary driver of this financial shortfall is inflation, which has significantly increased costs across various operational areas, including insurance, supplies, and labor. Despite the Texas state government recognizing teacher pay as a critical issue for retention, AISD has not received additional funding to address this concern. In response, the district implemented one of its largest salary increases for teachers to remain competitive and retain quality staff.

Additionally, AISD has seen a substantial rise in expenditures related to special education, with an increase of approximately $25 million over the past two years. The district currently spends around $160 million on special education, yet receives only $50 million in dedicated funding from state and federal sources, resulting in a $110 million gap that the district is covering to meet the needs of its students.

The district's financial challenges are compounded by slower growth in property values, which affects its tax revenue. Unlike other municipal governments that can adjust their tax rates to meet budgetary needs, AISD must base its budget on projected tax revenue, limiting its financial flexibility.

Moreover, while AISD has maintained a steady student population over the last two years, the impact of COVID-19 has led to a loss of students in previous years. The funding model, which is based on attendance rather than total enrollment, further complicates the district's financial situation. This model means that funding fluctuates with daily attendance, regardless of fixed costs like teacher salaries.

These factors collectively contribute to the district's significant deficit, prompting ongoing discussions about potential solutions and the future of funding for education in Austin.