News Story

After significant cost reductions districtwide throughout the year, the Austin ISD Board of Trustees approved the 2025–26 budget with a $19.7 million deficit, — a steep reduction from the prior year adopted deficit.

The details: This budget includes $ 1.63 billion in revenue, including $715.5 million in recapture and $939 million in operating expenses.

• The new budget assumes $55 million in new revenue sources, including land sales and an estimated $9 million in new state funding from House Bill 2. 
• The latest cost-cutting measures included a more than 20% reduction in the central office staff, totaling $9.6 million in savings.
• School improvement support is also included with an additional $8 million in funding. 

Background: The road to this budget has been long and challenging. In June 2024, the board adopted a budget with a multi-million dollar deficit. A month later, projected property tax revenues came in lower than expected, increasing the shortfall by another $14 million– bringing the total to $92 million deficit. 

• By January of 2025, the projected deficit had grown to $110 million, due to additional funding for Special Education and other services, as well as the loss of SHARS revenue. 
• In March 2025, Austin ISD was able to reduce the deficit by an additional $9 million by implementing a hiring freeze and optimizing expenditure management strategies.
• We’re closing the year with a projected $90 million deficit that will be absorbed through our fund balance, or savings account. 

On that note: With multi-year deficit budgets, our fund balance will now be below the 20% minimum required by board policy. To ensure a sustainable way to get back to 20%, the board also approved the updated fund balance policy to allow for a minimum fund balance of 15% for the 2025-26 school year and restore it to 20% by June 2028.

Looking Ahead: Austin ISD plans to bring an amended budget to the board in September once more is known about the rules tied to House Bill 2, which includes pay increases for campus-based staff. District leaders will work with Education Austin to finalize the compensation plan.

• Stay tuned as we continue working toward a balanced budget.