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As Austin ISD braces for state intervention, a critical question about the possible future of the cash-strapped district remains unanswered: How much will this cost taxpayers?
If the Texas Education Agency’s overhaul in Austin looks anything like it has in the other parts of the state, it could mean spending hundreds of thousands, if not millions, of dollars to install new academic programs, remove the superintendent, pay a new one or hire a conservator.
AISD won’t know how its budget crisis could be affected until TEA announces its plans for the district. Like most of the big questions surrounding the looming intervention, it depends on the type of action TEA takes and what happens afterward.
But it’s clear Austin ISD will foot the bill for any changes made by the state in the coming months, even if the current district leaders lose control over what those changes look like.
Houston ISD, which the state took control ofin 2023, pulled nearly $450 million dollars from its rainy day reserves in the first two years to implement changes that included new technology, programs and higher salaries at some schools.
Other districts that faced state intervention in the last six months immediately saw costs spike. In Fort Worth ISD, which underwent a full takeover in March, the district paid at least $412,000 to part ways with its former superintendent. Wichita Falls ISD, which kept its leadership, now pays a state-appointed conservator to oversee reforms.
TEA does not provide districts additional money to fund costs incurred from state intervention. However, said agency spokesperson Jake Kobersky, the state “works with district leadership to identify additional revenue sources” as part of the support it provides to all Texas ISDs.
Austin ISD is already struggling to stay afloat. The district ended last year with a $105 million deficit, and had to pass a budget with severe cuts this year to prevent a deeper shortfall. It closed 11schools. Its reserves are still historically low, about half the amount typically required by board policy.
This year, cash reserves are so low that Austin ISD must borrow $140 million to cover payroll through November while it waits for the arrival of the property taxes that help fund normal operations.
Districts across the state have handled intervention costs by dipping into their reserves or eliminating existing programs to make way for new ones.
Austin can’t afford that, said trustee Candace Hunter. Declining enrollment, decreasing attendance, stalled property taxes and growing expenses have already put the district in a deep financial hole. Hunter worries a takeover could make it worse.
“I think it’s like Sherman’s march to the Atlantic: death and destruction and fire and ruin,” she said. “Then they will say, ‘Look what we did! Aren’t you proud of us?’”
New leaders, new costs
Austin ISD is facing state intervention after two middle schools, Webb and Burnet, received five consecutive Fs on the state accountability rating system and triggered a law requiring TEA to intervene in some way.
Austin ISD has appealed those school ratings in the hopes of staving off state intervention. If the ratings stand, TEA Commissioner Mike Morath has multiple options.
He could order a takeover. TEA would remove the superintendent, choose a new one and negotiate their salary. The state would also replace the current school board with an appointed board of managers, stripping the locally-elected representatives of power.The board would approve the new superintendent’s contract.
AISD Superintendent Matias Segura earns a base pay of $362,000. His contract does not lay out the details of a separation agreement in case of a takeover. That would need to be negotiated between Segura and whatever school board is in charge, according to an AISD spokesperson.
Removing superintendents can be costly. In Fort Worth, the district paid $412,000, plus benefits to part ways with its former leader. In Beaumont, the district will pay its previous superintendent $245,000 to serve as an adviser until January 2027 in addition to the salary of its state-appointed leader.
In general, the initial salaries and benefits come close to what the previous superintendent earned. Houston ISD Superintendent Mike Miles was hired in 2023 with a $380,000 base salary, $20,000 more than his predecessor, according to state records.
The board of managers has since raised his base pay to $462,000. If Miles leaves before the end of his contract in June 2030, he could walk away with a package worth up to $924,000.
State intervention doesn’t have to mean Segura’s exit. Morath could decide, as he did in Wichita Falls ISD, to keep district leadership in place and appoint a conservator to oversee district changes.
Fort Worth ISD doesn’t just have a new superintendent and board of managers. It must also pay $250 an hour, plus travel, to a conservator expected to remain in place for the duration of the takeover.
Roxanne Martinez, a member of the removed Fort Worth ISD board of trustees, said the community wants to know what the takeover will ultimately cost the districts and what must be cut to cover those related expenses.
“And the biggest question,” she said, “is, will these investments ultimately produce the improved student outcomes that everyone wants?”
No blank check from state
Then comes the bill for any academic overhauls the districts approve. That money all comes from the district, too.
Under Miles and the board of managers, HISD spent millions on academic changes, including more staff, higher salaries and new equipment. HISD spent an extra $700,000 per campus in the first year in schools that adopted Miles’ expensive effort, New Education System (NES), which came with higher teacher salaries.
Nearly eight in 10 HISD schools this year earned A or B ratings, nearly double what it was before the 2023 takeover.
But those higher ratings came with a steep price tag. To compensate, HISD slashed hundreds of central office jobs, slashed transportation and social work services — decisions made amid parent protest. In 2024, HISD held a $4.4 billion bond for building and technology updates. Voters rejected it.
“The bond needed to fail because we would be approving a bond at a time when people would not be held accountable,” said Maria Benzon, a member of the HISD board who was removed. “There’s no board member to vote out if they did a bad job.”
Since the takeover, 21,000 HISD students have left the district, translating into about $190 million less in state funding. Fort Worth is also now facing a nearly $50 million shortfall next year as the new leadership institutes more expensive reforms and faces declining enrollment.
Before the takeover, it had a hefty reserve fund, Benzon said. Now it is regularly pulling money from that rainy day pot to cover costs.
Benzon was a teacher at an NES school when the new system was ushered in. As a teacher, she said, many purchases didn’t make sense. Some of the technology seemed unnecessary, she said. The district spent hundreds of thousands of dollars on spin bikes.
While the district’s appointed leadership can’t be voted out, several of the board of managers have responded to public pressure, Martinez said. After fierce community outcry over cuts to speech therapists, two appointed board members apologized to the community at a public meeting, she said. The superintendent has promised to fully staff those positions next year but the district is currently using contractors to fill the gap, Martinez said.
“The takeover doesn’t come with additional money or any type of blank check,” she said. “There still have to be decisions made around what to cut and at what cost to students.”
The state should help fund changes the district makes as it tries to improve, Hunter said.
AISD is not in the position to deal with new costs, she said. Earlier this year, the district passed a budget that included $205 million in cuts that affected more than 500 jobs, teacher planning time, bus service, stipends, technology and community partnerships.
“Financially speaking, the district is already in a stranglehold,” Hunter said. “There’s no upside to this.”
This article first appeared on Austin Current.
