The Austin Community College board of trustees approved a balanced budget of $583 million for the 2027 fiscal year. It includes a 2% raise for all employees. That’s despite growing budgeting concerns for the college due to shrinking state funding and lower property taxes, which constitute two of the school’s three primary revenue streams.

ACC Chancellor Russell Lowery-Hart said the college lost $6 million in state revenue due to new dynamic funding formulas. This was also the first time in 17 years that property tax revenue was down for the college, and the first time since 2014 that employee salaries, which amount to over 74% of the budget, exceeded the revenue from property taxes.

“For us to propose any kind of raise when other schools in the state are proposing cuts, speaks to our commitment to our employees in this college and this community,” Lowery-Hart said during a meeting this week. “And while it’s not what we wish it were, I’m proud that in this moment we’re able to offer something, when the budget could dictate that we don’t offer anything.”

Carlos Martinez, ACC’s deputy chief financial officer and associate vice chancellor, said that in order to offer a raise and have a balanced budget, the college eliminated vacancies, decreased their funding for hourly labor and restructured some departments.

This year, officials also decided not to put money into their cash reserves, as they normally do each year. Last year, they put $4 million into their savings. While some suggested using those reserves to pay for higher raises, Neil Vickers, ACC’s chief financial officer, said the college has to be careful about dipping into its cash reserves because that could create a “slippery slope” of operating on their savings.

ACC officials also said they want to leave as much as possible in their savings in case there’s an additional drop in state revenue. Some board members also worry about a continued decrease in property taxes that could hit the college’s revenue over the next few years.

Lowery-Hart said he hopes that the college continues to work with the state government to restore funding, saying state officials are working to ask lawmakers for supplemental funding during the next legislative session. Martinez said that while they are confident that they will secure more state funding, they are also continuing to work reducing spending.

“Part of our action and our planning going into this FY27 budget year is to continue to look for areas where we can be more effective and efficient,” Martinez said. “Looking for dollars that we can reallocate to capture this shortfall if it does get there and reevaluate what our internal initiatives are and if they align with the college.”

A 2% increase for employees

During the meeting, ACC employees asked for a 4% increase in pay to keep up with inflation and the cost of living in Austin. Instead, the board approved a 2% increase in pay plus a one-time $1,700 payment for all full-time employees. During the last few years, the board has approved pay increases of at least 3%. In 2024 they approved a 4.5% increase plus an increase to the hourly minimum wage from $22 to $23.

ACC employees who spoke before the vote said that federal cuts to SNAP and Medicaid systems, along with cuts to student loan forgiveness programs, and a lack of access to reproductive healthcare in Texas are creating additional expenses for many families.

“The one-time payment will provide some temporary relief, but leave our employees falling further behind since that does not become part of the permanent base salary,” ACC professor David Albert said. “We are advocating for a flat 4% raise to allow our employees, particularly our lower-income employees, not to continue to fall further behind.”

Lowery-Hart said officials recommended a 2% increase based on decreased revenue projections. He said that number helped the college prepare in case of a “worse economic scenario” and avoid having to cut personnel positions.

Martinez explained that a one-time payment was possible because the college has leftover revenue from the 2026 fiscal year. He said that while the college couldn’t give employees the increase that they asked for, the one-time payment plus the 2% increase was the equivalent of a 4% increase.

Frozen tuition continues

This is the 13th year ACC has been able to freeze its student tuition and mandatory fees despite growing inflation. The college is also in the third year of its free tuition pilot program, which allows Austin-area high school graduates to attend college for free for three to four years.

During the public comment part of the meeting, ACC employees said that while they respect the college’s decision to give free tuition, those decisions “should not come at the expense of the employees who carry out the institution’s mission every day.”

Martinez said since the beginning of the free tuition program, the college has budgeted $27 million for it every year. Because of the program, he said, the college has increased enrollment, student retention and student success, which will lead to additional revenue.

“So not only is it helping all the students in the surrounding area that we serve, but it’s also assisting us with meeting those budget gaps that we might have,” Martinez said.