Austin ISD projects $110M–$123M shortfall; administration outlines reductions, rightsizing timeline and community engagement

Interim Chief Financial Officer Katrina Montgomery and Superintendent Segura presented an updated budget picture to the Austin ISD Board of Trustees on March 27, saying the district’s projected deficit for fiscal 2025–26 could reach $110 million under current assumptions and climb to about $123.3 million under an 11% property‑value decline scenario.

Montgomery said the board’s approved 2024 budget began with a $78 million deficit; the district currently projects a $110 million shortfall if the district takes no additional actions. She said administration has already identified roughly $63 million in reductions (including multi‑year strategies) and is pursuing an additional $32 million in reductions for fiscal 2026 to return to the board‑approved starting point.

Montgomery pointed to near‑term spending indicators — a decline in March purchasing card spending from about $1.4 million in March 2024 to $700,000 in March 2025 and a drop in purchase order totals from $5.2 million to roughly $2.2 million — as evidence that hiring and spending controls implemented in March are reducing outlays.

The administration described actions already in place: a hiring freeze through June 30, 2025 (with special‑education hires exempted to reduce contractor reliance), pre‑approval for overtime, tighter P‑card limits and weekly financial monitoring with principals. Montgomery said the district will not implement a blanket spending freeze at the moment, but would reassess if savings trends do not reach targets.

Segura and Montgomery outlined a suite of identified strategies for fiscal 2026 totaling about $46 million, including master‑schedule optimization, transportation reconfiguration, contract evaluations (technology and special education), a graduation preparation program and software utilization reviews. The administration said some strategies will produce savings in later years and that rightsizing (including potential school consolidations) would be part of a multi‑year plan rather than a one‑year fix.

On rightsizing and potential consolidations, the administration presented planned guardrails: an equity‑informed tool, timeline and public engagement process; timelines included development of a tool and a December 2025 board vote if a consolidation plan is advanced. The presentation emphasized transition planning, stakeholder engagement and an intent to align any plan with district values.

Trustees asked for clarifications about the assumptions feeding projections. Trustee Foster and Trustee Quintana emphasized the need to preserve program quality and guard against efficiency moves that reduce effectiveness. Trustee Bruce Goffin and Trustee Kitara Quintana pressed for more nuance on whether consolidation assumptions accounted for transportation, enrollment shifts, and whether closures would drive families to charters or private schools. The administration said the figures are starting points and that deeper campus‑level work — including analysis of transportation impacts and equity measures — is necessary before any closures.

Montgomery said the district will not include uncertain state funding in the budget until it is finalized. She said preliminary property‑value information from the Travis Central Appraisal District would be available April 9 and final values are not guaranteed until later in the summer, so revenue estimates remain subject to revision.

Why it matters: The district’s fiscal stance shapes staffing, programs and capital choices for thousands of students. Trustees and administration framed the work as a multiyear effort combining short‑term spending controls and longer‑term structural changes that will require transparent community engagement and equity screening.

Next steps: the administration will continue weekly financial monitoring, post materials on the district budget page, brief principals and the ad hoc committee, and refine the rightsizing tool with stakeholder input. Montgomery said the administration will provide updated budget numbers after the Travis Central Appraisal District delivers preliminary values in April.