With less than a month left in the financial year, the Austin Independent School District’s 2025-26 budget deficit has swelled to $95 million, causing the district to dig into reserves and eat up more than half of its savings. The deficit, a leap from the $19 million projected in August, marks an escalation of the district’s financial crisis. Failures to sell off Austin ISD property and student enrollment declines caused the ballooning deficit, with attendance falling much lower over the course of the year than expected. Austin ISD’s newly reported deficit will deplete cash reserves so much that the district will need to take out a loan this fall to make payroll. The district will also have to cut further into its savings, dropping its on-hand cash from 15% to 10% of its budget.
Protesters rally in opposition to budget cut proposals
The announcement comes as Austin ISD struggles to cut a $181 million deficit projected for next fiscal year by slashing student programming and cutting staff. Trustees responded in a stunned manner, questioning how a late-breaking financial deficit could develop. The news caused trustees to question the 2026-27 budget, which they must approve by the end of June. The average number of students showing up for school each day has steadily declined in Austin ISD since August from 62,520 students to 60,525 students.