AISD presents budget update showing recapture history, tighter FY27 assumptions and strategies to close a multi‑million dollar gap
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Summary
CFO Katrina Montgomery told trustees that Austin ISD is pursuing multi‑year budget stabilization after years of recapture payments to the state, reporting $8 billion in cumulative recapture (2001–2025) and outlining strategies (hiring freeze, property monetization, stipends, transportation efficiencies) to close remaining FY26/FY27 gaps.
Katrina Montgomery, Austin ISD’s chief financial officer, gave a detailed budget update at the Feb. 12 information session that walked trustees through historical spending, revenue pressures and preliminary assumptions for FY 2026–27.
Montgomery said the district has consistently managed budget swings but noted that recapture payments to the state have taken a large toll. "The first year that we paid recapture was in 2001, and from 2001 through 2025, we've paid the state $8,000,000,000," she said, using that figure to explain why the district is emphasizing multi‑year balance and reserve targets.
The presentation showed FY26 year‑to‑date underspending (about $30 million under a $514M YTD expected run rate) and explained FY27 planning assumptions: staffing will be built on a higher enrollment projection (69,550) while the budget will be conservatively modeled on a lower planning number (66,768) to create a cushion; property values are modeled down 5%; the district continues a hiring freeze and plans vacancy savings at about 2%.
Montgomery listed reduction and revenue strategies already in motion: central office refinements, special‑education contract adjustments, property monetization or sale options, stricter p‑card and preapproval controls, and potential bus‑camera revenue streams. The district identified $26.4 million in near‑term strategies and noted roughly $52 million of total reductions that were required when the budget was passed; the shortfall reflects timing changes as some property sales shifted between fiscal years.
Trustees pressed staff for more detail. Trustee Quintana asked "What is the percentage after recapture that we get to keep?" Montgomery answered that the district keeps roughly 51% after recapture. Trustees also asked for written follow‑ups on the staffing 'needs‑based' approach, the hold‑harmless calculations from the Legislature, and scenarios to quantify likely revenue losses.
Administration said it will return with additional written detail and that staff will continue community outreach on budget assumptions and upcoming engagement events.