The Austin Independent School District (AISD) is grappling with a significant financial challenge as its budget deficit has escalated from $92 million to $110 million. Interim Chief Financial Officer Katrina Montgomery informed board members that the district must cut $32 million from its $954 million operating budget this year to reduce the shortfall to $78 million. The district's financial difficulties are exacerbated by rising costs and lower-than-expected property tax revenues. To address this issue, AISD will implement a hiring freeze starting February 28 and explore other austerity measures to prevent potential cash flow problems.

Montgomery highlighted that the district had initially faced a $119 million deficit at the start of the school year, which was partially mitigated by voter-approved property tax increases in November. Despite cutting $26 million from the budget and planning for an additional $8.48 million in reductions, new funding requests totaling $52 million have emerged. These include substantial allocations for special education, instructional materials, service center repairs, and technology upgrades. Furthermore, changes in transportation budgeting have led to a loss of $12 million in anticipated revenue from the School Health and Related Services program.

The district's special education department, which consumes nearly $170 million annually, has been under scrutiny following a mandate from the Texas Education Agency to address overdue evaluation requests. Historically, AISD could rely on increasing property values to bolster its finances, but this year, Travis County's property value growth has slowed significantly, falling short of initial projections. Superintendent Matias Segura emphasized the need for an "honest budget," acknowledging that past adjustments due to rising property values may no longer be feasible.

Other Central Texas districts are also facing similar financial pressures. For instance, the Eanes district decided to close Valley View Elementary School and end its Spanish immersion program to trim costs, while Leander plans to eliminate about 200 campus-level positions. In Austin, the school board appreciates voter support for raising the tax rate, which injected an additional $41 million into the district. However, the district is preparing its budget without assuming any new state funding, despite promises from lawmakers to increase public school financing. The school board will convene a workshop on February 27 to strategize deficit reduction efforts.