Austin ISD presents FY26-27 proposed budget with $205M in reductions and $60M property monetization plan

Austin ISD leaders presented a revised FY26-27 budget proposal at a June 18 hearing that would increase implemented reductions to $205 million, rely on $60 million in property monetization and add $20 million in near-term cuts intended to bring the district to a 13% unassigned fund balance.

Chief Financial Officer Katrina Montgomery told trustees the district’s general-fund revenue was projected at about $1.477 billion with $630 million in recapture and that operating expenditures remained higher than revenue. She said the district failed to reach its FY25-26 projection of a 15% fund balance, in part because the Rose Dale property sale that had been expected to net $19 million is now estimated to close at about $16.9 million.

"Even with the additional $20 million reduction, our operating expenditures and recapture is still more than our revenue," Montgomery said, summarizing a negative $40 million net change. Administration proposed $60 million from monetizing four properties to help balance the FY26-27 budget and said the $60 million figure is a conservative, executable target given current portfolio work.

Montgomery outlined scenarios showing the district could land at 10% unassigned fund balance if no further cuts were made, or 13% with the $20 million of additional reductions. The administration described how that added $20 million would be achieved: increases to class ratios, expansion of essential-area reductions into additional bands, substitute-cost savings, stipend and benefits reductions, central-leadership attrition, vacancy and attrition assumptions, and other departmental measures.

The presentation listed the proposal’s key numbers: a proposed operating-expenditure level around $886–887 million for FY26-27; implemented reductions expanded from $185 million to $205 million; property monetization target $60 million; and $20 million of new reductions designed to move the district from an estimated 10% starting point to 13% unassigned fund balance.

Trustees pressed administration on execution risk: whether $60 million in property monetization is realistic given market and entitlement uncertainties; how many bridge loans (short-term borrowing to float cash) might be needed; and the district’s ability to weather federal-grant delays such as past freezes to Title funds. Administration said it planned one bridge loan for FY26-27 if needed, is refining interest estimates with advisors and acknowledged federal grants have been unpredictable in recent years.

Administration also described staffing impacts: slides showed a decline in proposed FTEs to a projected 9,744, and Montgomery said certain campus and central-office roles would be affected, noting an 84-FTE central-office impact figure that included placements for many impacted staff and a number listed as "placements not needed." Montgomery said talent and staffing teams are attempting placements and that some displaced staff have found roles on other campuses.

Why this matters: The plan aims to stabilize the district’s finances but relies in part on one-time property monetization and a series of operational cuts that will affect campus staff and services. Trustees repeatedly asked how the district would avoid repeating late budget pivots and asked for monthly fund-balance updates and an updated budget calendar.

What’s next: The budget hearing was adjourned and discussion moved to the regular voting meeting where trustees will consider voting items; administration said it will present further updates and a July/August timeline for finalized numbers and actions.