Austin ISD Faces Budget Crisis: Hiring Freeze Set for Feb. 28 as Deficit Rises to $110M

Due to a growing deficit from $92 million to $110 million, the Austin Independent School District (AISD) is cutting back on its budget by freezing hires and spending across the district. On Thursday, Interim Chief Financial Officer Katrina Montgomery told the board that AISD needs to cut $32 million from its $954 million running budget to get its finances back on track.

There will be no hiring until February 28. This is part of a more extensive set of austerity steps meant to cut the deficit to $78 million. This year, the district has already cut $26 million, mostly from the central office's business. They had planned to cut another $8.48 million.

But unexpected costs have made the gap worse. AISD received new requests for $52 million, with $16 million going to special education, $7 million to buy teaching supplies, and $6 million to fix up the service center. When the transportation budget changed, the School Health and Related Services program, which reimburses Medicaid for student health services, lost $12 million in income.

AISD has been spending a lot of money to reorganize its special education department in response to a 2023 order from the Texas Education Agency to clear up long-standing evaluation backlogs. The district spends almost $170 million on special education, but the state only gives $96.6 million to pay for it.

Adding to the problem, property tax income, which had been a stabilizing factor for a long time, did not meet expectations. Officials thought that property prices would rise by 6%, but they only grew by 1%, which meant that the district made much less money.

Montgomery told AISD that it might have trouble with money flow if it doesn't take action. In the coming months, the board is likely to continue looking for ways to save money.

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