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Austin ISD projects $181 million shortfall for 2026–27; district weighing staffing and program cuts after $49 million current‑year deficit
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Summary
Superintendent Matias Segura and CFO Katrina Montgomery told the district community that lower property values, a drop of more than 3,000 students and delayed real‑estate revenue leave Austin ISD projecting a $49,000,000 current‑year deficit and a $181,000,000 gap for 2026–27. Leaders said the district may cut staffing, stipends and non‑staff budgets and pursue new revenue while soliciting community feedback before a June 2026 final budget.
Matias Segura, superintendent of Austin ISD, said the district now projects a $49,000,000 deficit for the current school year — $30,000,000 more than the approved budget — and is facing a projected $181,000,000 shortfall for 2026–27.
"Because of that, Austin ISD is now projected to end the current school year with a $49,000,000 deficit, up $30,000,000 from our approved budget," Segura said, adding that enrollment has dropped by more than 3,000 students and property values fell further than anticipated.
The district’s chief financial officer, Katrina Montgomery, said the gap grew because the assumptions used when the board adopted the 2025–26 budget no longer match today’s realities. "When the 2025–26 budget was passed, it included a $19,700,000 deficit and assumed about $45,000,000 in real estate revenue from the sale of the old Rosedale site and Brooks site," Montgomery said. She told listeners that Rosedale is delayed and will not close in this fiscal year.
Montgomery said steeper declines in property values and an enrollment drop directly reduce state funding and leave a large gap between expected revenue and planned expenses for 2026–27. "To close this gap, we must reexamine our planned cost for next year to stay within our anticipated revenue," she said.
The district has already taken several cost‑saving steps, Montgomery said, including central‑office restructuring, an external hiring freeze and tighter spending controls. She noted that in November 2025 the board of trustees voted to close 10 campuses, an action expected to save about $21,000,000, of which roughly $17,000,000 will be reinvested into required school improvement work such as staff stipends and instructional materials.
Even with those measures, Montgomery said "deeper reductions now have to be considered," listing possibilities that include reviewing campus staffing levels and teacher planning time, adjusting administrative and support position ratios, reducing employee stipends, implementing 15% cuts to non‑staffing budgets and considering program reductions.
As alternatives to cuts, the district is exploring new revenue opportunities, such as selling facility naming rights and expanding philanthropic and corporate partnerships aligned to district priorities.
Montgomery emphasized that these are difficult, personal decisions for staff, students and families and urged community participation in the process. The district will offer multiple opportunities for feedback and information, and Montgomery directed listeners to the online survey at austinisd.org/budget-getinvolved. The budget is scheduled to be finalized in June 2026.
Next steps: district leaders will continue internal reviews of expenses and revenue options, engage the community through public meetings and surveys, and return with a proposed budget for board action in advance of the June 2026 deadline.
