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Austin ISD CFO: fund balance target steady but FY25–26 deficit widens to $49 million
Summary
CFO Katrina Montgomery told trustees the district targets a 15% unassigned fund balance but now projects an adjusted FY25–26 deficit of $49 million, citing $54M revenue declines, $56M recapture decreases and a $28M swing from delayed property monetization; near-term savings of $34M (including a $12M hiring freeze) were proposed.
Katrina Montgomery, Austin ISD’s chief financial officer, told trustees on March 26 that the district maintains a 15% fund-balance target but faces increasing budgetary pressure for FY25–26.
Montgomery said the district projects about $182 million in total fund balance, roughly $140 million of which is unassigned, and reiterated the board-approved target of approximately 15%. She said the district’s adopted FY25–26 budget initially assumed a $19 million deficit but that revised projections show an adjusted deficit of $49 million. Montgomery attributed the swing to a $54 million revenue decrease, a $56 million decrease in recapture, and a change in property monetization timing: staff now anticipate one property monetized for $17 million rather than two properties that together were expected to generate $45 million, a $28 million swing.
To reduce the gap, Montgomery outlined $34 million in estimated savings from March through June 2026, including a $12 million hiring freeze and additional spending controls. She said the Texas Education Agency made a technical correction to property-tax data that adds an estimated $4 million in “hold-harmless” funding to the current year. The CFO said the district still needs strategies to close an estimated remaining $16 million and planned monthly updates as projections firm up.
Trustees requested precise, declarative statements for future reports (for example, a simple line that says how far the district is from its adopted budget). The board asked staff to verify rounding around the 15% fund-balance figure and to present clearer enrollment-projection ranges to inform the June budget adoption process.
Montgomery said the district has compiled more than 70 budget strategies for FY25–26 and will present further details and community engagement opportunities, including a virtual session on March 28 and an in-person meeting on April 6.
