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Superintendent Matias Segura watches the crowd in the room grow as the Board of Trustees meeting begins at Austin ISD headquarters Thursday, June 11, 2026. To deal with the $181 million deficit, Austin ISD is proposing reducing transportation services, cutting staff positions, and reducing staff benefits.<\/p>\n
Mikala Compton\/Austin American-Statesman<\/p>\n
The AISD Board of Trustees listen to public comments during their meeting at Austin ISD headquarters Thursday, June 11, 2026. To deal with the $181 million deficit, Austin ISD is proposing reducing transportation services, cutting staff positions, and reducing staff benefits.<\/p>\n
Mikala Compton\/Austin American-Statesman<\/p>\n
When Rachel Preston became a teacher more than a decade ago, she fell in love with helping Austin students learn French.<\/p>\n
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\u201cSometimes, I get to see the kids go from zero to conversant, almost fluent in the language,\u201d said Preston, who teaches at the Liberal Arts and Science Academy, or LASA. \u201cThey\u2019re growing the whole time they\u2019re in your class. You just get to see them succeed.\u201d\u00a0<\/p>\n
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But now, Preston\u2019s future in the position she loves is uncertain, after learning in May that her role would shift<\/a> from full- to part-time as the Austin Independent School District searches for savings amid a budget crisis.<\/a><\/p>\n This spring, district officials proposed sweeping cuts to address a projected $181 million deficit for the 2026-27 school year.\u00a0<\/a><\/p>\n The school district is far from alone in its financial woes. School systems across Texas have laid off staff and scaled back student programming to grapple with multimillion-dollar deficits as the costs grew. However, no other Texas school system faces a deficit of such scale.\u00a0\u00a0<\/p>\n AISD\u2019s shortfall dwarfs those of any other urban-area district in Texas and represents nearly 20% of Austin ISD\u2019s operating budget. Trustees will debate the budget at a meeting Thursday and must approve it by the end of June.<\/p>\n Article continues below this ad<\/p>\n The $181 million deficit cannot be explained by state funding issues alone. A Statesman analysis found that district leaders spent years delaying difficult decisions as enrollment plummeted\u00a0<\/a>\u2014 preserving staffing levels, operating dozens of under-enrolled campuses and maintaining programs that became increasingly expensive to sustain.<\/p>\n Over the years, Travis County\u2019s growing property values helped soften the impact of declining enrollment in the short term. But Austin ISD remained vulnerable to financial pressures when inflation<\/a>, state mandates and student enrollment declines intensified budget issues.<\/p>\n The district\u2019s budget problems could play a role in whether the Texas Education Agency takes over the entire district<\/a>. TEA is likely to contemplate intervention this year because of longstanding academic problems at three North Austin middle schools.\u00a0<\/a><\/p>\n Although academic failings at a single campus can trigger a state takeover, Education Commissioner Mike Morath<\/a> has said he also considers a district\u2019s fiscal health when deciding whether to remove elected trustees from power.\u00a0<\/p>\n Article continues below this ad<\/p>\n If financial, academic or safety problems are acute, Morath believes there is \u201ca moral obligation to the students and a fiduciary obligation to the taxpayers for the state to temporarily intervene and correct those problems<\/a>,\u201d he told the Statesman in March<\/a>.\u00a0<\/p>\n The TEA declined to comment.\u00a0<\/p>\n Superintendent Matias Segura agreed that for years, Austin ISD leadership delayed difficult cuts, in part because the district\u2019s finances were cushioned by the area\u2019s ballooning property values.\u00a0<\/p>\n \u201cAll those pressures (of declining enrollment, property values and stagnant state funding) have compressed and have required this administration with this board to do all of (the cuts) at one single time,\u201d Segura said Monday. \u201cThat\u2019s why this feels so disruptive, because many decisions should have been considered many years ago.\u201d\u00a0<\/p>\n Article continues below this ad<\/p>\n Now, the district is making \u201chard decisions,\u201d and that is the kind of change the agency wants to see, he said.\u00a0<\/p>\n To address the deficit, AISD officials plan to cut more than 550 positions, slash transportation options, increase class sizes at some elementary schools and reduce athletic and fine arts spending.\u00a0<\/a><\/p>\n Public school funding experts the Statesman spoke with about Austin ISD\u2019s shortfall put a fine point on the difficult decisions the district will face as it moves forward.<\/p>\n \u201cThat\u2019s $2,500 a kid,\u201d Marguerite Roza, director of the Edunomics Lab at Georgetown University, said of needed cuts. \u201cThat\u2019s going to be really hard.\u201d\u00a0<\/p>\n Article continues below this ad<\/p>\n The grim financial picture has thrown staff like Preston into uncertainty. For days, she contemplated how to tell students she may be at the school on a more limited basis\u00a0\u2014 or not at all if she has to find a new job.<\/p>\n In the 11 years that Preston has taught in Austin ISD, she\u2019s never felt that the district\u00a0\u2014 and her position in it\u00a0\u2014 was so unstable.<\/p>\n Enrollment falls as staffing remains relatively stable<\/p>\n Since 2011, Austin ISD\u2019s total enrollment dropped by 17,000 students<\/a> as families fled high city prices, left because of immigration fears<\/a> or enrolled outside the district.\u00a0<\/p>\n Article continues below this ad<\/p>\n Last year alone, 16,500 students who live within Austin ISD boundaries attended other public school campuses, largely charters.\u00a0<\/p>\n But as student numbers plummeted by 20% in the past 15 years, Austin ISD didn\u2019t reduce staff at the same rate, a Statesman analysis found. Over the same period, total staffing dropped by 3.2%.<\/p>\n Because Texas funds schools based on attendance, every student who leaves takes state funding with them.<\/a> Fewer students also reduce the need for staffing.<\/p>\n Article continues below this ad<\/p>\n In previous years,\u00a0 the district regularly made exceptions for campuses with small or declining enrollment to keep positions, Segura said in a May interview.<\/p>\n \u201cThe history of Austin ISD has been: we make exceptions everywhere,\u201d Segura said.\u00a0<\/p>\n When enrollment drops quickly, districts have to restructure staffing, said Lori Taylor, a professor of public service and administration at Texas A&M University who studies school funding.\u00a0<\/p>\n \u201cYou don\u2019t have to serve as many kids, so the funding coming down is not a problem if you adjust your staffing and services accordingly,\u201d she said.\u00a0<\/p>\n Article continues below this ad<\/p>\n District leaders repeatedly budgeted as though enrollment would remain stable, despite enrollment declines, Segura said in May.<\/p>\n From 2016 to 2025, AISD\u2019s costs per student for counseling increased by 76% and by nearly 50% for security spending, in part because of a 2023 state law requiring districts to place a police officer on each campus<\/a>. Staffing of aides, who assist teachers in the classroom, grew by 40% and special education teachers grew by 32% since 2016.\u00a0<\/p>\n The special education hiring surge came as the district scrambled starting in 2022 to clear a chronic backlog of special education evaluation requests<\/a>. Federal law mandates schools test students who request a special education evaluation within a strict timeline, but for years, Austin\u00a0ISD failed to test thousands of students by that deadline. Students missed out for months on critical support to help them learn.\u00a0<\/p>\n Article continues below this ad<\/p>\n The backlog triggered a 2021 lawsuit against the district.<\/a> A 2023 state order to clear the waitlist<\/a> prompted the district to boost spending and staffing for the costly services, Segura said in May.\u00a0<\/p>\n Even though Austin ISD\u2019s enrollment declined, the number of students receiving special education services grew from 8,300 to 13,300 from 2016 to 2025.<\/p>\n Since 2016, the district has made cuts to regular teaching staff and central office positions, but not at a proportionate rate as enrollment declined. From 2011 to 2025, the number of students per Austin ISD teacher dropped from 15 to 13.9.\u00a0<\/p>\n Article continues below this ad<\/p>\n Enrollment loss isn\u2019t always concentrated in one area geographically, making staffing cuts difficult to do at scale, Taylor said.<\/p>\n \u201cWhen the enrollment declines are dispersed, the cost-minimizing thing for the district to do is to redraw the boundaries and close the school, but that is very politically difficult,\u201d she said.\u00a0<\/p>\n This summer, Austin ISD closed 10 campuses and the district\u2019s International High School<\/a>, but some worry that decision may have come too late.<\/p>\n Small schools<\/p>\n Austin ISD\u2019s enrollment decline started in 2012, but the district has continued to add campuses with funds from the 2004, 2008 and 2017 bonds, most recently with the opening of Marshall Middle School in 2024<\/a>.\u00a0<\/p>\n Article continues below this ad<\/p>\n Until last year, Austin ISD had largely avoided controversial school closure decisions<\/a>.\u00a0A 2011 proposal to shutter 13 campuses failed amid parent outrage<\/a>. Austin ISD closed four schools in 2020, backing off an initial plan to shutter 12.<\/p>\n All the while, more students left the district and small schools proliferated across Austin ISD. By 2025, 24 of Austin ISD\u2019s 115 campuses enrolled fewer than 300 students, the Statesman found.<\/p>\n A third-party auditor hired by AISD to identify cost-saving measures<\/a> zeroed in on the small school issue in a report released in March 2025. The consultant told Austin\u00a0ISD that operating small schools was costing the district $43.6 million annually<\/a>.<\/p>\n Article continues below this ad<\/p>\n The audit found that an elementary campus with fewer than 500 students and a middle school enrolling under\u00a0750 students didn\u2019t produce better outcomes for students than larger schools, despite costing almost $2,000 more per child.\u00a0<\/p>\n Forty-nine AISD elementaries enrolled under 500 students and 10 middle schools had fewer than 750 in 2023-24, auditors wrote. All similar Texas urban school systems educated more students on average at their campuses, except for Fort Worth ISD.<\/p>\n Small schools cost more per student to operate. While many families love small, neighborhood schools, each campus requires its own principal, counselor, custodian and cafeteria worker. But with fewer enrolled, school systems receive less revenue to cover the costs.<\/p>\n That\u2019s why right-sizing a district to match enrollment is essential work, Taylor said. In the same way that growing districts prepare to build more schools ahead of enrollment growth, shrinking districts must plan for losses, she said.\u00a0<\/p>\n Article continues below this ad<\/p>\n \u201cThey need to be as proactive at shutting schools as the fast-growth districts need to be proactive at building new ones,\u201d Taylor said.\u00a0<\/p>\n Austin ISD proposed redrawing attendance boundaries across the district last year<\/a>, the first time in decades that leaders had undertaken the project in earnest. But officials announced in November that they would delay that decision for at least a school year, also shelving a plan to close another three campuses, all of which enrolled under the recommended 500 students.\u00a0<\/a><\/p>\n One\u00a0\u2014 Bryker Woods Elementary\u00a0\u2014 had just 284 students in 2024-25.<\/p>\n Austin ISD expects this year\u2019s closures will save $21.5 million<\/a>, but the vast majority of the savings are already accounted for by new expenses to run state-mandated academic improvement plans.<\/p>\n Article continues below this ad<\/p>\n What is AISD spending its money on?<\/p>\n Based in Travis County, where property values have grown in recent decades, Austin ISD often benefited from rising property tax revenue. Officials began to expect extra cash to flow into district coffers when property values rose more than projected, Segura said.<\/p>\n Because of a special taxing tool, Austin ISD could also collect\u00a0\u2014 and keep\u00a0\u2014 more money per student than other peer districts with lower property values.<\/p>\n But the district also spent more. In 2025, Austin ISD spent almost $13,000 in general fund costs per student, while the average Texas school district spent $11,300 per student, according to TEA.\u00a0<\/p>\n Article continues below this ad<\/p>\n When more money came in from higher property values, Austin ISD could afford to increase the number of counselors at a school, create new curriculum and spend money on other programs that Segura said represent the district\u2019s values of choice, student supports and smaller classes.\u00a0<\/p>\n \u201cWe have to bring the cost per student down to get the budget to be balanced,\u201d\u00a0Segura said Monday. \u201cAustin ISD has spent over the many, many years more per student than what was offset by the state.\u201d\u00a0<\/p>\n Austin ISD\u2019s high per-student spending comes despite the fact that the district serves a smaller share of students who are at-risk, low-income or learning English\u00a0\u2014 groups of students who tend to require costly additional supports for learning.<\/p>\n Critics have questioned what Austin ISD is getting out of its higher per-student spending as the district had more F-rated campuses in 2024-25 than any other Texas public school system.\u00a0<\/p>\n Article continues below this ad<\/p>\n Small campuses and student-to-staff ratios contribute to AISD\u2019s higher per-student cost. The district also provides a slew of upgraded academic options like Montessori education, a firefighting academy, International Baccalaureate courses and specialized resources for newly arrived immigrant students.<\/p>\n These programs are what kept\u00a0Maplewood Elementary prekindergarten teacher Traci Dunlap in Austin ISD.<\/p>\n \u201cI stayed in this district for 20 years because I feel like AISD has offered me and my students opportunities that they may not get in other districts,\u201d Dunlap said. \u201cThey offer more than what the state requires.\u201d\u00a0<\/p>\n But in a district that once marketed that families could \u201cHave it All,\u201d<\/a> Austin ISD may no longer be able to shoulder those costs, Segura has said.\u00a0\u00a0<\/p>\n Article continues below this ad<\/p>\n Proposed cuts include extracurricular programs like water polo, librarian positions at small schools and music and art classes at campuses that serve a smaller population of \u201chigh-needs\u201d students.<\/p>\n State funding ‘mismatch’<\/p>\n Austin ISD is one of many school districts across the state contemplating major budget cuts to deal with a bleak financial picture. Districts nearby, including Pflugerville <\/a>and Leander ISDs<\/a>, have turned to school closures. In El Paso, school leaders declared financial exigency<\/a>, initiating staff layoffs.<\/p>\n Houston ISD, run by state-appointed leaders, is facing its own $50 million deficit because of projected enrollment loss.<\/a><\/p>\n Article continues below this ad<\/p>\n Public education advocates\u00a0\u2014 and Austin ISD staffers like Dunlap\u00a0\u2014 have pointed fingers at state leaders.<\/p>\n \u201cIt\u2019s all been manufactured by the state,\u201d Dunlap said.<\/p>\n Some cite Austin ISD\u2019s hefty contribution to the state\u2019s recapture, or Robin Hood program, which requires property rich districts to send a portion of their tax revenue back to the state to be redistributed to districts with lower property values<\/a>.<\/p>\n But even as Austin ISD sends back about half of what it collects, the district still keeps enough to fulfill state-mandated education spending requirements.<\/p>\n Article continues below this ad<\/p>\n Others blame stagnant state funding. While Texas has invested billions in public education over the past decade<\/a>, the funding has not kept up with the rate of inflation or costly state mandates on schools, said\u00a0Chandra Villanueva, director of budget and policy for Every Texan, a left-leaning public policy nonprofit.\u00a0<\/p>\n \u201cIt really is just a mismatch of what (the state is) willing to provide our schools and what things actually cost in real life,\u201d Villanueva said.\u00a0<\/p>\n For instance, districts spend more on special education than what they get from the state. Austin ISD\u2019s special education spending grew from $112.1 million to $164 million since 2021, with the state only covering half of the expenses.<\/p>\n \u201cWe\u2019ve been shortchanging our schools for a really long time,\u201d Villanueva said.<\/p>\n Article continues below this ad<\/p>\n Next steps<\/p>\n In the face of such demanding financial pressure, Austin ISD has to change how it budgets, Segura said in May.\u00a0<\/p>\n