AUSTIN, Texas — The Austin Community College Board of Trustees approved a balanced $583 million budget for fiscal year 2027 that includes a 2% pay raise for all employees despite declining state funding and lower property tax revenue.
The board approved the budget this week as the college faces reduced revenue from two of its three primary funding sources. The budget also provides a one-time $1,700 payment to all full-time employees.
ACC Chancellor Russell Lowery-Hart said the college lost $6 million in state funding because of changes to the state’s funding formula. He also said property tax revenue declined for the first time in 17 years, while employee salaries, which account for more than 74% of the budget, exceeded property tax revenue for the first time since 2014.
Lowery-Hart said the college proposed the pay raise while maintaining a balanced budget despite financial challenges.
Carlos Martinez, ACC deputy chief financial officer and associate vice chancellor, said the college balanced the budget by eliminating vacant positions, reducing funding for hourly labor and restructuring some departments.
College officials also decided not to add money to cash reserves during the fiscal year. Last year, the college deposited $4 million into its reserves. ACC Chief Financial Officer Neil Vickers said the college wanted to preserve its savings in case state funding or property tax revenue declines further.
Lowery-Hart said ACC plans to continue working with state officials to seek additional funding during the next legislative session. Martinez said the college will also continue reviewing spending to identify savings and reallocate resources.
Before the vote, employees urged the board to approve a 4% salary increase, citing inflation and the rising cost of living in Austin. The board instead approved a 2% raise and the one-time payment.
ACC professor David Albert said the one-time payment would not increase employees’ permanent base salaries and urged the board to adopt a 4% raise.
Lowery-Hart said the 2% increase reflected the college’s revenue outlook and would help avoid potential staff reductions if economic conditions worsen.
Martinez said the one-time payment was possible because of surplus revenue from fiscal year 2026. He said the payment, combined with the 2% raise, provides compensation comparable to a 4% increase for the coming year.
The board also kept tuition and mandatory fees unchanged for the 13th consecutive year.
ACC will continue its free tuition pilot program for Austin-area high school graduates, now in its third year. Martinez said the college budgets $27 million annually for the program and that increased enrollment, student retention and student success have generated additional revenue.
