Austin ISD hears plan to draw $19.7M from reserves, lower fund‑balance target to 15% as administrators outline $44M in reductions

The Austin Independent School District Board of Trustees held a public hearing on June 26 to review the district's proposed fiscal 2025–26 budget, during which administration said the plan would draw $19.7 million from reserves, leave a 15.21% fund balance and rely on $44 million in identified reductions including a central‑office restructuring and possible centralized special‑education placements.

Katrina Montgomery, interim chief financial officer, told trustees the district is using conservative enrollment and property‑value estimates drawn from a snapshot showing 72,003 students and an average daily attendance of about 64,100. Montgomery said proposed general‑fund figures include $1.58 billion in revenue, $715.5 million in state recapture, and $984.1 million in operating expenditures; the budget also highlights $8 million labeled for school improvement.

The draft budget would use $19.7 million of fund balance in FY2025–26, leaving the district at 15.21% of operating expenditures. Montgomery said the administration is "committed to trying to reduce this deficit" and characterized the 15% level as a time‑limited change: the policy would allow a fund balance as low as 15% for up to three years in extenuating circumstances, with a plan to return to a 20% target by the end of fiscal 2028.

Why it matters

Board members and administrators framed the hearing as a tradeoff among protecting staff and classroom resources, avoiding borrowing for cashflow, and making deep operational cuts. Trustees repeatedly pressed for clarity on which reductions are fixed and which are "TBD" and asked for a clear timeline and quarterly updates showing measurable progress toward restoring the…