The school closure crisis is entangled with the release of Texas’ A-F accountability ratings, which came out in April with 30 local schools scoring F’s. However, Austin ISD officials say, the closures really remain about two things: The district’s budget deficit and the declining enrollment in its public schools.
Katrina Montgomery, the district’s chief financial officer, updated the community on those problems at the May 22 board meeting, where she presented a recommended budget for the 2025-26 school year. Montgomery said that AISD currently has 73,000 students enrolled in its schools, down 10,000 students from a decade ago. The district estimates it has 25,000 empty seats in its schools.
The lower attendance causes the district to receive less funding from the state, which contributes to its budget deficit. Montgomery said the deficit rose from $78 million last June to $110 million in January, leaving the district with a critically low level of cash on hand. Ongoing cuts and adjustments have brought the deficit down to $97 million as of April.
Montgomery said the district expects to cut an additional $44 million in the 2025-26 fiscal year. Three strategies will account for most of the savings: $10 million will come from laying off employees in AISD’s central office; $7 million will come from using AISD employees instead of contractors to provide services for the district’s special education students; $24 million will come from what the district is calling “forced reductions.”
“In 2023, we went out on a limb here to invest in staff, which is the right thing to do, but those dollars never came to fruition.” – AISD Superintendent Matias Segura
Superintendent Matias Segura explained that the forced reductions will be cuts proposed by his office and made across every division of AISD, with the goal of reducing overall expenditures by 2%. “It will not be uniformly distributed,” Segura said, “meaning that not every division is going to see a 2% reduction. Some may see 4%, some may see none at all.” Segura noted that the budget includes thousands of line items, some of them budgeting small amounts of money, and that his office will comb through them all. “That might be a non-staffing line item in a division that might say, ‘miscellaneous equipment greater than $5,000,’ right? Those are the sorts of things we’re talking about now.”
One thing the proposed budget doesn’t include is the assumption that there will be new funding from the state Legislature, even though Texas representatives announced last week that they have come to an agreement to provide about $8 billion more for the state’s public schools over the next two years. The bill with the proposed funding increase, House Bill 2, was passed by the Senate with amendments and is currently awaiting approval from the House. It does not give school districts much flexibility on how to use the the increased funding. Much of it must be spent on special education and security. AISD’s Jacob Reach estimated that if the bill is approved it will result in $19 million for teacher raises and another $13.5 million for possible deficit reductions.
Reach was careful to note that HB 2 is not yet law. Segura remembered the budget process undertaken two years ago. Then, AISD provided big raises for its teachers and staff, assuming that legislators were on the cusp of providing more funding to public schools, something which did not happen. “In 2023, we went out on a limb here to invest in staff, which is the right thing to do, but those dollars never came to fruition, and, honestly, we’re still hurting from it,” Segura said. He emphasized that even if the Legislature does approve HB 2 this year, the district must still go forward with school closures and consolidations.
“We need to have vibrant, well-resourced schools, and right now we’re simply very, very thin,” he said. “We’re at the point now where things that really matter are being pulled out. That just can’t continue.”
This article appears in May 30 • 2025.
