The district reduced its initial shortfall projection of $127 million after proposing $44 million in budget reduction strategies, including $9 million in additional state funding following the 2025 legislative session. Additionally, AISD is expecting to receive $45 million in revenue from two land sales, interim Chief Financial Officer Katrina Montgomery said at a June 26 board meeting.
“This is not a stop gap,” Montgomery said about adopting the $19.7 million budget shortfall. “We’re going to continuously do work to reduce the deficit over the next fiscal year.”
The breakdown
The AISD board of trustees voted to adopt a general fund budget with $1.58 billion in revenue and $992.1 million in expenditures at the June 26 meeting. The district is anticipated to pay $715.5 million in property taxes back to the state through a process known as recapture and save $15.3 million in vacant positions.
For FY 2025-26, AISD has proposed the following budget reductions totaling $44 million, including:
- $10 million to restructure central office positions
- $9 million in additional state funding
- $7 million in cuts to contracted special education services
- $4 million in holding benefits contributions for staff
- $3.75 million in unidentified cuts, such as reducing stipends
- $3 million to reduce department budgets by 5%
- $3 million in property insurance savings
- $2 million in revisions to special education placements by centrally locating students at certain campuses
- $800,000 to reduce campus budgets by 10%, excluding staff positions
- $500,000 to consolidate or eliminate supplementary programs
“If we get additional state funding ... we can reduce another line item or we can just throw that back into our fund balance,” Montgomery said. “But, what we are committed to doing is making sure, whether these strategies all hold 100% or not, that we will reduce $44 million in FY 2025-26.”
The impact
A homeowner with an average taxable value of $576,644 is estimated to pay $4,040 in property taxes in FY 2025-26 based on a tax rate of $0.9253 per $100 valuation, according to district documents. This would be a $317 reduction in property taxes from the previous fiscal year.
If approved by voters in the November election, the state’s homestead exemption would increase from $100,000 to $140,000.
Also of note
Under House Bill 2, AISD is anticipated to receive around $35.9 million in additional school funding, around $9 million of which may go toward offsetting the district’s budget shortfall, Montgomery said.
The $8.5 billion school funding legislation—signed by Gov. Greg Abbott on June 4—includes a $55 increase to the basic allotment of funding per student as well as funding increases for special education, early education, school safety and support staff.
Around 600 AISD teachers with three to four years of experience will receive $2,500 raises and about 3,000 AISD teachers with five or more years of experience will receive $5,000 raises, Montgomery said.
The board is expected to vote on the district’s compensation plan Aug. 21. Staff members receiving raises will be notified Sept. 15, she said.
In case you missed it
Amid its budgetary concerns, AISD is planning to begin closing and consolidating campuses beginning in the 2026-27 school year. Over the last 10 years, AISD’s enrollment has declined by more than 12,000 students, leaving the district with 25,000 empty seats, according to the TEA and AISD.
The district is seeking community input as it works to create a tool to evaluate its 116 campuses for potential consolidation based on school utilization, condition, educational suitability and cost per student.
AISD officials are expected to present campus evaluations to the board in August and recommend school consolidations in October.
