Austin ISD adopts FY2025–26 budget with $19.7 million draw from reserves; fund-balance policy set at 15.21%

The Austin Independent School District board adopted the district's proposed fiscal 2025–26 general fund, food-service and debt-service budgets on June 26, approving a plan that draws $19.7 million from reserves and sets the district's fund balance at 15.21% for the coming year.

The budget presentation, introduced by Superintendent Matias Segura and delivered by interim Chief Financial Officer Katrina Montgomery, shows projected general-fund revenue of about $1,580,000,000 before recapture, with an operating-expenditure baseline of roughly $984.1 million. Montgomery said the district will continue using conservative enrollment and property-value snapshots while final Travis Central Appraisal District (TCAD) numbers are certified in July.

District leaders told the board the proposed budget balances several factors: an expected net of roughly $9 million available from recent legislative changes (from an initial $35.9 million estimate with restricted uses), two property sales totaling $45 million, vacancy savings of $15.3 million and multiple planned reductions that together sum to $44 million. Montgomery said the $44 million is the administration’s target of additional reductions for FY2025–26 and includes a central-office restructure, reduced contracted special-education placements, and department and campus non‑staff cuts.

“The proposed adoption net change in fund balance would show that we're taking from our fund balance $19,700,000, which will leave our fund balance at 15.21%,” Montgomery said during the presentation.

Superintendent Segura and Montgomery emphasized the adopted 15.21% figure is a temporary, deliberate step. Segura said the district plans to treat the reduction as a three‑year restoration plan, aiming to return to a 20% fund balance by June 2028. Segura described 15% as the lowest level he would accept, saying it represents roughly two months of operating expenditures in cash-on-hand.

“We want to be at three months or 90 days of operating expenses,” Segura said. “So 15% is as low as I will ever go.”

Board members pressed administration on several elements. Trustee Quintana asked for specifics about the centralized special-education placement strategy, including how many students could be affected and when families would be notified; Montgomery said the approach is an estimate and implementation would be staggered with family notifications planned in early August if the district moves forward. Trustee Hunter asked the administration to re-state how much of the $35.9 million projected from the state is unrestricted; Montgomery said the district estimates about $9 million net that is not already tied to legislative restrictions.

The budget includes a set of compensation commitments tied to funding signals from the Legislature. Montgomery said preliminary estimates from HB 2 provide about $17.4 million for local compensation increases: an estimated $2,500 for classroom teachers with 3–5 years’ experience (about 600 teachers) and $5,000 for teachers with 5+ years (about 3,000 teachers). The Teacher Incentive Allotment (TIA) is estimated at about $5.3 million and is expected to benefit roughly 600 teachers.

Montgomery laid out a calendar for final actions and future amendments: TCAD final certified values due July 25; consultation with compensation partners in July and a board vote on a compensation agreement in August; compensation letters to employees in mid‑September and new pay rates effective for the September 30 payroll; and a series of budget amendments in September and subsequent months as revenue estimates and forced-reduction decisions are finalized.

Board discussion acknowledged the trade‑offs in adopting the lower minimum fund balance. Trustee Foster said he remained a “20% person” but that the three‑year approach and incremental central-office reductions made the recommendation defensible given immediate fiscal pressure. Multiple trustees requested quarterly updates and more granular listings of any later “TBD” reductions so the board and public can track where cuts are made.

The board approved the budget later in the meeting; the formal motion to adopt the FY2025–26 budgets was moved by Secretary Gonzalez and seconded by Vice President Whitley Chu and was recorded as passing unanimously by those present on the dais.

Ending with implementation details, Montgomery and the superintendent said administration will continue to refine reductions, seek additional state funds and return to the board with amendments in September and again as needed during the fiscal year.