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Fitch Ratings downgraded Austin Independent School District’s underlying unlimited tax bond rating to AA with a negative outlook from AA-plus, citing lower available general fund reserves.<\/p>\n Fitch Ratings downgraded Austin Independent School District’s underlying unlimited tax bond rating to AA with a negative outlook from AA-plus, citing lower available general fund reserves.<\/p>\n
Rich Saskal<\/p>\n
A decrease in Austin Independent School District’s budget reserves led to a Fitch Ratings downgrade on Wednesday, which followed outlook revisions to negative by two other rating agencies this year.\u00a0<\/p>\n
Processing Content<\/p>\n
Fitch cut the Texas school system’s underlying unlimited tax bond rating a notch<\/a> to AA, keeping the negative outlook it originally assigned the district last November and citing lower available general fund reserves. <\/p>\n The rating agency said it “expects reserves to decline to about 11% of spending in fiscal 2026 before improving to at least 15%, supported by cost-saving measures in the fiscal 2027 budget and proceeds from one-time property sales.”<\/p>\n In September, Moody’s Ratings revised its outlook on the district’s underlying Aaa rating to negative from stable due to a “trend of deficit spending has materially weakened financial ratios, particularly in the general fund.”<\/p>\n KBRA, which has an AAA underlying rating for the district, changed its outlook to negative in July, saying the move “reflects increased risk with respect to the Austin Independent School District’s ability to maintain a level of reserves consistent with the rating level as it works to restore structural budget balance following three years of significant fund balance draws.”<\/p>\n The district did not immediately respond to a request for comment.<\/p>\n Austin ISD, which received voter authorization for $2.44 billion of bonds in 2022, shuttered several schools at the end of the 2025-26 school year to help deal with financial challenges. Its school board approved an $887 million fiscal 2027 budget<\/a> in June that included $205 million in operating cuts.<\/p>\n The district’s declining enrollment and its effect on per-pupil funding revenue could further pressure the district’s budget and financial resilience, Fitch said.<\/p>\n Most of the district’s $2.46 billion of outstanding general obligation bonds as of June 30, 2025, are rated triple-A through the Texas Permanent School Fund’s bond guarantee program. <\/p>\n A $541.9 million bond issue<\/a> in 2023, issued with triple-A ratings from Moody’s and KBRA, did not carry that guarantee after the program ran out of capacity<\/a>, which was later increased<\/a> by the Internal Revenue Service. \u00a0 <\/p>\n","protected":false},"excerpt":{"rendered":"Fitch Ratings downgraded Austin Independent School District’s underlying unlimited tax bond rating to AA with a negative outlook…\n","protected":false},"author":2,"featured_media":480663,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[132,134,133,32034,17423,22095,3913,17424,27],"class_list":["post-480662","post","type-post","status-publish","format-standard","has-post-thumbnail","category-austin","tag-austin","tag-austin-headlines","tag-austin-news","tag-budgets","tag-general-obligation-bonds","tag-public-finance","tag-ratings","tag-school-bonds","tag-texas"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts\/480662","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/comments?post=480662"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts\/480662\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/media\/480663"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/media?parent=480662"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/categories?post=480662"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/tags?post=480662"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}