I commute on a 1996 Gary Fisher Marlin that I got on Craigslist for $50. I replaced tires, tubes, brakes, brake handles, cables and chain for well under your budget. I've thought about converting it to put drop bars on it but have not done that yet. Those old fully rigid steel mountain bikes can be made into wonderful commuter bikes. I do also have a Kona Jake CX bike that I used to commute on. That doesn't get used too much anymore.