Austin ISD outlines $181 million preliminary gap and proposes staffing, planning-time and stipend reductions

Austin Independent School District leaders told trustees at an information session May 7 that the preliminary FY2026–27 general fund shows a $181 million gross deficit driven by lower property values, enrollment declines and rising costs. Superintendent Sigra and CFO Katrina Montgomery said staff are identifying reductions, monetization of property and other cost savings to reach a balanced budget by the adoption date in June.

The district presented updated assumptions—refined average daily attendance (ADA) −3% and property-value change −3%—and an estimate that property monetization could contribute about $45 million toward the shortfall. After those adjustments staff reported an adjusted net change near $4 million that would be drawn from fund balance under the current plan pending final certified property values.

To reduce recurring costs, the district proposed a package of measures that include rebalancing staffing allocations, a two-year phased change to staffing ratios and planning time (with protections for higher-need “band one” and turnaround campuses), and a districtwide review of roughly 125 stipends (about $30 million in total) to prioritize pay for staff serving directly in classrooms. Academic leaders described a staffing formula that in secondary schools can staff campuses at 6.5-of-8 or 7-of-8 teacher allocations depending on course classifications defined under TEC 28.002, and said principals will be given guardrails and some discretion in master-schedule decisions.

CFO Katrina Montgomery said the district is separating staffing and non-staffing budgets in department presentations and is working through a line-by-line review of expenditures; she emphasized that many decisions will be made in consultation with departments, principals and trustees. District staff warned that failing to adopt a responsible budget could trigger state oversight and other penalties and said they are following board policies governing personnel reductions and the process for declaring financial exigency if legally required.

Trustees and staff said they plan more public engagement before votes. The board is scheduled to receive a recommended budget May 21 and to adopt a final budget in June; final certified property values from the Travis County appraisal district will follow later in July.