Austin ISD announces hiring freeze as budget deficit grows to $110 million

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Austin ISD will institute a districtwide hiring freeze on March 1 as the school district tries to claw its way out of a financial hole that has grown deeper since the 2024-25 budget was approved in June.

Though district officials initially anticipated a $78 million budget deficit, that figure climbed to $92 million. Now, it’s reached $110 million, despite Austin ISD already making $26 million in spending cuts. Only special education services will be exempt from the hiring freeze, according to a district spokesperson.

Austin ISD’s interim Chief Financial Officer Katrina Montgomery shared the sobering news about the budget deficit with trustees during a school board information session Thursday. She said efforts to reduce the deficit must continue, especially to keep the district’s savings account from getting too low.

“We can’t stop here. We can’t just say we made the $26 million (in cuts) and stop,” she said.

Montgomery said a combination of spending requests and lower-than-anticipated federal funding for the School Health and Related Services program drove the deficit up. Those requests included $16 million for special education evaluation contracts, $7 million for instructional materials and $6 million for repairs and maintenance.

“What we’re trying to do is be very courageous in reducing an additional $32 million (in costs),” she said.

The goal, Montgomery said, is to get the deficit back down to $78 million during the current fiscal year. In addition to the hiring freeze, other strategies Austin ISD is using to reduce the deficit include reorganizing departments, selling district properties and improving student attendance rates, which bring in more state funding. A spending freeze is also on the table.

Montgomery said a variety of headwinds have made it harder to cut spending and increase revenue. Among them is an uncertain political climate for public schools at the state and federal levels as the Texas Legislature considers creating a school voucher program and President Donald Trump issues education-related executive orders. That includes allowing immigration authorities to enter schools and houses of worship.

“We have parents who are possibly keeping their kids at home because of their fearful state,” she told trustees.

Austin ISD’s financial situation has also been exacerbated by other factors such as inflation and underfunded school safety mandates state lawmakers approved in 2023. Montgomery noted Austin ISD received $2.5 million from the state for school safety – but the actual expense tops $23 million. Both the Texas House and Senate have proposed increasing school security funding by $400 million to help bridge the funding gap.

Austin ISD is not the only Central Texas school district to see its projected budget deficit grow this fiscal year. The Eanes ISD school board, in an effort to cut a projected $6.3 million deficit next school year, voted to close an elementary school and consolidate it with another.

Leander ISD officials also announced last week they anticipate a $34.4 million budget shortfall. To reduce that sum, the district plans to cut more than 200 school-based positions after the current school year ends.

This story was produced as part of the Austin Monitor’s reporting partnership with KUT.

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