Austin ISD leaders are now weighing teacher layoffs and cuts to academic programs, nurses and technology in a new proposal that will reach into classrooms as they confront a ballooning budget deficit.

The austerity measures would cut an unspecified number of elementary and secondary teaching positions, shorten teacher planning time and convert librarians into support roles. It is the latest move to address a budget deficit that continues to climb despite cost-saving measures. District leaders now predict a shortfall of $49 million, $30 million more than was projected last summer. If no action is taken, the deficit predicted for the next school year would reach $181 million, but if all cost-saving “strategies” are implemented, the district could reduce that number by $132 million.

“We are at a point now where the pressures have not subsided and the budget gap that must be addressed is significant,” Superintendent Matias Segura said. “Decisions have to be made.”

Segura and Austin ISD Chief Financial Officer Katrina Montgomery on Tuesday night presented the draft plan during a budget work session with school board members as the latest attempt to head-off a financial crisis exacerbated by lower property values and decreased enrollment due to declining birth rates, increased school choice, and intensified immigration enforcement. Austin ISD board members will consider the cuts as part of a June budget vote.

The cuts are the latest in a series of difficult decisions district leaders have made to stabilize the district’s finances. In November, Austin ISD board members voted to close 10 school campuses to bridge the budget gap. The $181 million potential deficit already accounts for the estimated $20 million in savings from those closures. Six of those schools are already in a community-involved process to determine a future use that could entail selling or leasing all or part of the land for profit. Austin ISD has also turned to sales of previously-closed schools this year, including the embattled sale of the former Rosedale School. And, in June, the district cut 20% of positions at its central office.

But the cost-saving measures have not proved enough to keep the cuts away from the classroom as the district combats the financial hit of enrollment loss combined with state and federal education funding constraints. Now, district leaders say it is impossible to end the deficit without terminating current educator positions.

“The reality is when 86% of the budget represents people, the only way to make these types of changes over time is to reduce that overall cost,” Segura said following the work session. “The frustrating part is each of these individuals is contributing to the student experience, they are here for a reason.”

Cuts move into classrooms

The proposed budget cuts would translate to an estimated $22 million in “staffing adjustments” at elementary and secondary schools, but Segura declined to say how many eliminated positions that entails. However, the proposal would cut some secondary teachers’ planning time in half, and lead to some days without planning time at all, depending on the school’s schedule.”You cannot move from six class periods and two planning periods to seven without eliminating people,” said Austin ISD Board President Lynn Boswell.

Other cuts include an estimated $40 million in potential department-level “staffing adjustments,” $23 million in reductions tied to funding for vacant positions, 15% reductions of campus and department budgets for non-staffing expenditures and cuts to stipends related to travel, cell phones and special education.

Librarians would be transitioned to support roles to save an estimated $2 million, a change that could alter how students access campus libraries and another $2.9 million could be saved by reducing secondary campus safety monitors, who assist with safety on campus.

Cuts to instructional initiative funding and sign-on bonuses would save another million dollars. Also included in the proposal are considerations for cuts to academic programs, nurses, and technology, but the amounts for those are still to be determined, leaving key details unresolved as the budget process moves forward.

What happens next?

Austin ISD board members will host work sessions every other week and engage with the community through virtual and in-person meetings to gather feedback, make changes to the proposed cuts and ultimately vote on a budget in June. If approved by board members, the proposed budget would take effect by July.

Other potential sources of revenue currently under consideration include monetizing three properties through land sales or leases. Austin ISD is wrapping up community meetings this week to gather input on the future use and repurposing of six of the schools set to close at the end of the school year.

How the deficit grew

Austin ISD has faced financial woes for years, due in part to declining enrollment, decreasing property values and the state financing system, pressures that have steadily eroded the district’s financial flexibility. Between 2020 and 2021, at the height of the COVID-19 pandemic, the district lost about 6,000 students.

Additionally, the district loses hundreds of millions of dollars annually due to recapture, a state school finance policy that requires property-wealthy school districts to send a portion of their local property tax revenue to the state for redistribution to lower-wealth districts. Austin ISD’s board members estimated a recapture payment of $715 million for the current school year, nearly half of its $1.58 billion budget, limiting how much local revenue the district can retain.

Last June, Austin ISD board members approved a budget ahead of the 2025-2026 school year that included a planned $19 million deficit, assuming the sale of the former Brooke and Rosedale schools for one-time cash injections. However, the estimated $26 million sale of Rosedale continues to hang in the balance after area residents fought against the proposal, citing parking concerns and a lack of promised affordable housing, and delaying a key piece of the district’s financial plan.

The district also cut central office staff by 20% last June, saving $9.6 million. Other cost-saving measures included a central-office hiring freeze and increased oversight of expenditures, steps that trimmed administrative costs but did not close the widening gap.

After just losing more than 3,000 students, district finance leaders told trustees in February that unforeseen enrollment loss and a delayed land sale, among other factors, had widened the district’s deficit far beyond earlier projections. At the time, district leaders said cost-saving measures and cuts had not yet reached the classroom level, and they were working to keep it that way even as the outlook worsened.