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.
FY 2024-25 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 2024-25 school year?
The Austin ISD school board adopted a budget with a $78 million shortfall for the 2024-25 school year with a commitment from the administration to keep reducing spending throughout the fiscal year. Since then, despite continuous spending reductions and the approval of Prop A by Austin taxpayers, the deficit has grown to a projected $110 million due to declining property values and growing inflation. Additionally, Austin ISD has incurred expenses that were not initially budgeted for, such as Special Education contracted services and maintenance and repairs.
What is Austin ISD Doing to reduce the budget deficit?
The district has already reduced its 2024–25 budget by approximately $60 million. These reductions include the elimination of Central Office positions, scaling back of service contracts, and implementing operational efficiencies across the organization. A districtwide hiring freeze—excluding positions in special education—was enacted effective March 1, 2025, as a cost-saving measure for the current fiscal year.
Additionally, the district has significantly reduced spending associated with procurement card (P-Card) usage and has implemented a process requiring pre-approval of purchase orders, check requests, and both employee and non-employee reimbursements before any expenditures.
How do property values and recapture factor into the budget?
The adopted budget for the 2024–2025 school year includes $1.57 billion in local property tax revenue collected by Austin ISD. Of that amount, the district is projected to send $940 million of local property tax revenue to the state to fund other school districts. As of April 9, 2025, the Travis County Appraisal District released preliminary property value estimates. Please note that final certified values will not be released until July 2025.
How much of the Austin ISD budget is allocated to staff compensation?
After recapture, 89% of Austin ISD’s General Fund is allocated toward payroll-related costs.
FY 2025-26 Budget FAQs
When will the budget be final?
The preliminary budget for the 2025-26 school year will be presented to the Austin ISD Board of Trustees in April. No decisions will be made until the Board votes to approve the proposed budget on June 26, 2025. If approved, the budget will take effect on July 1, 2025.
What is Austin ISD’s expected budget shortfall for the 2025-26 school year?
The district is currently projecting a budget deficit ranging from $110 million to $123 million for the 2025–26 school year, based on preliminary property value estimates the district will receive from Travis Central Appraisal District (TCAD) on April 9th.
How much of the Austin ISD budget is allocated to staff compensation?
After recapture, 89% of Austin ISD’s General Fund is allocated toward payroll related costs.
What is Austin ISD doing to reduce the budget deficit?
We’ve identified roughly $20 million in potential savings by streamlining class schedules, reworking bus routes, reevaluating contracts, tightening staff allocations at smaller campuses and eliminating underused software. While every effort has been made to keep reductions away from the classroom, the growing deficit means that we have to start looking at reductions that will have a direct impact on campuses. This might mean consolidating classes or positions to streamline campus schedules, understanding this could impact class sizes and programs. Non-mandatory programs and partnerships are also under review for possible reduction or elimination, though further engagement will be needed before making any decisions.
At this time, the Board has initiated discussions regarding the potential consolidation of schools.
Additionally, the district is working to monetize underused properties. The Board has already designated several former school campuses as surplus, creating the opportunity to lease or sell them.
