How is the Austin ISD budget funded?
The majority of the district’s funding is derived from local property taxes, supplemented by state and federal sources.*
The Texas Legislature establishes the funding formulas for public schools, with allocations primarily based on two key factors:
- Average Daily Attendance (ADA) and the district’s property tax collections; and
- Additional weighted funding for specific student populations, including those eligible for State Compensatory Education services (such as students identified as at-risk or economically disadvantaged), as well as students receiving Special Education services.
*Austin ISD is subject to a state-mandated process known as "recapture," which requires a portion of locally collected property tax revenue to be remitted to the State of Texas.
Why is Austin ISD facing a budget deficit?
Each year, Austin ISD’s expenses increase due to rising costs such as property insurance, energy, fuel, and staff raises to align with the rising cost of living. At the same time, state funding for Texas schools has remained relatively stagnant since 2019. Additionally, federal funding has been reduced due to a decline in the economically disadvantaged student population. Federal reimbursements for School Health and Related Services, which largely fund special education therapies, have also decreased.
During the 88th Texas legislative session in 2023, school districts across Texas alerted the public and legislators of the urgent need for the state to increase school funding given these rising costs and unfunded mandates like the HB3 that requires districts to staff an armed officer at every campus.
Despite the growing need for additional school funding, no new school funding resulted from the regular legislative session, or from any of the four special sessions Texas Governor Greg Abbott called in 2023.
- At the time, Governor Abbott stated he would only approve school funding increases if some form of voucher bill became law.
- A bipartisan coalition of legislators stood against Governor Abbott’s push for vouchers because they opposed diverting taxpayer dollars to private education.
- As a result, several bills, which contained provisions for teacher compensation and school safety funding, were not passed, leaving school districts statewide with stagnant budgets that have not been adjusted to account for costs due to inflation.
The Texas Legislature meets every two years with the 89th legislative session currently underway.
Why does Austin ISD have budget challenges when school funding comes from local property tax revenue and local property tax bills have been rising each year?
While Austin has experienced significant economic growth, Austin ISD does not get to keep the majority of the property tax revenue that comes with that growth. This is because of a state mandate called recapture, which requires school districts considered “property wealthy” — like Austin — to send money back to the state to support “property poor” school districts.
How can I provide feedback to the district or ask a question to the district?
There’s many ways to provide feedback. Join us for a community meeting or share your feedback on AISD Help! AISD Help is a platform that allows community members to submit questions or provide feedback on any topic of interest. It can be accessed through the Austin ISD website by clicking the AISD Help! button located next to the search bar, or by clicking this link austinisd.org/aisdhelp.
How does the Texas Lottery provide funding to Texas school districts, and how does the process work?
The Texas Lottery generates revenue through ticket sales for games like scratch-offs and draw games. A portion of the money collected from these sales is used to pay prizes and cover administrative costs, but a share is allocated to public education in Texas.
This education funding is transferred to the Foundation School Fund, which is the primary source of state funding for Texas school districts. The state then distributes this money to districts based on formulas that consider factors such as student enrollment, property values, and specific student needs.
Importantly, lottery funds do not go directly to individual schools or districts. Instead, they supplement the overall state education budget. This means the funding helps support public education broadly across Texas rather than being earmarked for specific programs or schools.
FY 2025-26 Budget FAQs
What opportunities are there for the community to provide input on the budget?
Austin ISD hosts a series of budget community conversations every year during the spring semester. Community members can get involved by attending those meetings and also by being part of their Campus Advisory Council (CAC), which works with principals to provide input on campus budgets.
What is Austin ISD’s expected budget shortfall for the 2025-26 school year?
The Austin ISD Board of Trustees adopted the FY2025–26 budget with a projected $19 million shortfall and a commitment from the administration to pursue additional expenditure reductions throughout the fiscal year.
What is Austin ISD Doing to reduce the budget deficit?
To address the current FY2025–26 budget deficit, Austin ISD has implemented a series of strengthened fiscal controls and expenditure management strategies. These measures include requiring pre-approval for discretionary expenditures to ensure alignment with district priorities and available resources, instituting a hiring freeze for external candidates to limit personnel cost growth, and adjusting procurement card (PCard) spending limits to enhance oversight and reduce nonessential purchases. Collectively, these actions are intended to curb spending, reinforce financial discipline, and mitigate the district’s projected deficit while maintaining a focus on core instructional and operational needs.
How do property values and recapture factor into the budget?
The adopted budget for the 2025-26 school year includes $1.58 billion in local property tax revenue collected by Austin ISD. Of that amount, the district is projected to send $715.5 million of local property tax revenue to the state to fund other school districts. The Travis County Appraisal District will release preliminary property value estimates on March 25, 2026, for the 2026-27 school year.
How much of the Austin ISD budget is allocated to staff compensation?
After recapture, 87% of Austin ISD’s General Fund is allocated toward payroll-related costs.
