Austin ISD’s budget shortfall for fiscal year 2024-25 has increased from what officials predicted in April.

The big picture

In mid-April, AISD staff discovered property value growth and average daily attendance rates are lower than they expected, bringing the predicted $60 million shortfall to $89 million. Throughout April, officials made $30 million in cuts for FY 2024-25, meaning the district may start the year with a $59 million shortfall.

For FY 2023-24, the district took on a $52 million shortfall. Since then, officials have decreased the shortfall by $26 million through avenues including interest earnings and vacancy savings. Despite this, next fiscal year will likely start with an even greater shortfall.

“Our goal is to keep the lights on and the doors open,” board member Candace Hunter said during a board meeting April 9. “This [shortfall] is not our fault.”

More budget cuts are in discussion. Additional reductions unrelated to staffing will be considered, but staffing takes up 87% of the budget and may be impacted as vacancies arise, district officials said.

How we got here

On April 4, AISD Chief Financial Officer Eduardo Ramos presented a preliminary budget for FY 2024-25. This was drafted with the assumption the district would end this fiscal year with an average daily attendance rate—the average number of students who attend school each day—of 92% and a property value growth of 10%.

Instead, the district is facing an 87% average daily attendance rate and a property value growth of 5%, both of which factor into funding for public schools.

Under Senate Bill 2, passed during the 88th legislative session, community members whose homes are worth $100,000 or less don’t pay any property taxes to local school districts. This helped cause property values to grow at a slower rate than many Texas school districts may have originally predicted. Additionally, SB 2 cut school district maintenance and operations taxes, the majority of a homeowner’s tax bill, by nearly 24%, as previously reported by Community Impact.

“This year is the first year where our conservative assumption of 10% was actually not met,” Superintendent Matias Segura said at a press conference May 10.

Diving in deeper

AISD officials also noted several other factors impacting the strained budget, including:Bob Popinski, Senior Director of Policy for public education advocacy group Raise Your Hand Texas, told Community Impact in April the basic student allotment would need to be closer to $7,100 per student to keep up with inflation.

On May 13, nearly 40 Democratic state representatives addressed Gov. Greg Abbott in a letter, urging him to call a special session “to pass an education funding package to address the school budget crisis unfolding statewide.”

Abbott declined, stating budgeting problems would have been addressed if the representatives who signed the initial letter supported the creation of “a school choice and public school funding package” during the last two special sessions that took place.

Additionally, Abbott pointed to COVID-19 relief funding expiring and lowering enrollment as reasons impacting school district budgets.

About 43% of school districts in Texas anticipate budget cuts this upcoming fiscal year, according to a survey conducted by the Texas Association of School Business Officials.

“AISD did not put the [district] here; the state not supporting public education by way of funding has really exacerbated this problem that we have,” Segura said. “My hope is that our legislators are paying attention to the pain that school districts are going through right now.”

Going forward

District officials already made reductions for FY 2024-25, which included the elimination of 41 central office positions, many of which were vacant.

“We're protecting the schools,” Segura said. “All the cuts that we've taken are our central office; we're not impacting ratios at this point, [and] we're not impacting curriculum.”

AISD parent Laurie Solis told Community Impact in April she understands the district’s priority is to not impact campuses but feels many cuts could still end up affecting students.

“No matter how much you try to make cuts away from campus, it will trickle down to the way that students and the community experience our campuses,” Solis said. “It's not an easy decision of what they're being burdened with.”

Some avenues district officials will continue to look at to offset the shortfall include:
  • Elimination of contracts with outside vendors no longer needed, such as those made to stabilize the special education evaluation backlog
  • Potentially adding a registrar at elementary schools to help track average daily attendance
  • Taking advantage of vacant properties that are district-owned for revenue
  • Potentially asking voters for a property tax increase this November to generate about $42 million in additional revenue
“Over the next several weeks and into the next school year, we're going to be having more difficult conversations around how to reduce these costs, given that we have not received additional funding from the state [and] as the cost of education continues to increase,” Segura said.

The AISD board of trustees will approve a final FY 2024-25 budget during a board meeting June 20. To view the updated preliminary budget, click here.