Austin ISD projects six‑figure budget gaps, outlines cuts and hiring freeze as board begins planning

Austin ISD officials presented a detailed budget update and a budget‑alignment workshop to the Board of Trustees Feb. 27, saying the district faces a sizable shortfall and must consider a mix of program reductions, operational changes and asset monetization.

Interim Chief Financial Officer Katrina Montgomery said the district's adopted FY2024–25 budget (adopted last year) projected a roughly $78 million deficit; current projections show a substantially larger gap and a need for additional reductions. "This fiscal year…we need to cut an estimated $32,000,000 in addition," Montgomery told trustees, describing steps already taken this fiscal year that reduced the gap and the further actions under consideration.

Montgomery and Superintendent Matias Segura presented multiple scenarios for FY2025–26 based on property appraisal changes. The administration showed an estimated deficit of about $105 million assuming 0% property value growth and about $121 million using a midpoint projection (roughly an 11% local property value decline from recent appraisals). Montgomery emphasized cash‑flow timing and reserves, saying, "One payroll is approximately $33,000,000," and noting months when cash is thin.

Planned and proposed measures discussed in the workshop included: - An immediate hiring freeze for FY2024–25 that excludes special‑education positions; Montgomery said special‑education staffing decisions are being prioritized to reduce reliance on contractors. - Tighter spending controls and an escalation process for approving overtime and other non‑essential spend. - Consideration of monetizing district property and rethinking property insurance (including self‑insurance options) to lower annual premiums. - Program and staffing options that would reduce budgeted positions or allocations, including potential changes to secondary master schedules (moving from a 6‑out‑of‑8 planning model to a 7‑out‑of‑8 model at some high schools), adjustments to elementary protected planning and staffing thresholds, consolidation of schools, and reductions in non‑required enrichment and partnership programming. The administration presented rough estimates for groups of options (for example, a scenario labeled "7 of 8 secondary" estimated $16 million in savings in one illustrative configuration).

Trustees asked detailed questions about impacts to instructional coaches, dual‑language programming, the role of Title I funding for supplemental staff and whether changes could be tailored across campus bands or would be district‑wide. Several trustees stressed the importance of protecting core instructional supports: Trustee Hunter and others emphasized that instructional coaches and stable leadership correlate with improved campus outcomes. Montgomery and Segura said they would produce refined models and that the district will continue community outreach and board workshops through March and into June as assumptions (including state legislative outcomes) become clearer.

Segura and Chief of Staff Jacob Reach also briefed trustees on the legislative environment that could materially change the district's revenue picture, including competing House and Senate proposals for teacher pay and statewide school finance adjustments. Reach flagged pending proposals on special‑education funding and whether state action will materialize in time to influence FY2025–26 planning.

Board members asked for additional scenarios and asked administration to show what it would take to preserve a 20% fund balance policy target. Montgomery said such a scenario would be "aggressive" and require larger reductions or greater monetization but that staff could model options. Trustees requested continued public and staff engagement and asked administration to run tailored models for different bands of campuses and for the board to consider the trade‑offs explicitly before final adoption of the FY2025–26 budget in June.