On Aug. 26, Austin ISD's board of trustees is scheduled to take action on a budget with $1.05 billion in expenditures and other uses and $1.03 billion in revenue, along with a two-cent decrease in its tax rate in fiscal year 2015.
AISD Chief Financial Officer Nicole Conley presented staff's recommended budget at its Aug. 11 work session. The budget would draw about $25 million from reserves to offset projected revenue shortfalls.
"At the end of the day I always say we have infinite needs and sort of finite resources," Conley said, noting that with dwindling funding and increased financial requirements at the state level, the district may face tough decisions about what programs to cut over the next few years.
Trustee Amber Elenz said while AISD is proposing some increases in budget expenditures, it is proposing more decreases.
"I think it's really important that at the end of the day, the budget that we presented is $3.5 million less than what we spent last year," she said.
The budget
AISD's FY2015 recommended general fund budget covers instructional costs, costs associated with the implementation of House Bill 5, and operating costs for the new Jaime Padron Elementary School opening this fall, as well as the new Performing Arts Center.
It also continues supporting the 3 percent pensionable salary adjustment that was provided to all regular and full-time employees in FY2013 and adds another one-time salary adjustment to provide the equivalent of a pensionable 2 percent increase.
Interim Superintendent Paul Cruz said the salary adjustment is not about trying to be competitive with other school districts, as AISD already ranks eighth among a comparison of local school districts' salaries. Instead, it is about keeping up with the already existing gap, he said.
"We have had the grant to support our REACH program; well, that is that's going to be going away. We're going to continue [the program] this year, but that is going to be going away. So we're also looking at a new approach on teacher evaluation and principal evaluation," he said.
The district is also slated to pay about $58.5 million more to the state in Chapter 41 Recapture payments. Also known as "Robin Hood," Recapture is a system through which property-rich districts such as AISD are required by law to send money to the state to be redistributed among districts deemed property-poor.
Some trustees suggested an executive session discussion about strategies to address recapture with the legislature, but trustee Tamala Barksdale said she thinks the board's conversations about that should remain public.
"While I support the idea of equitable funding structure for all students across the state, the funding structure is not equitable for Austin. If we start cutting [the budget] to the bone, we're going to make ourselves a lot less competitive with other people that are offering educational services," she said. "So, I don't know that I'm quite down with having a private conversation about recapture and what our remedies are. I think we say no to this structure—loudly, forcefully—and take the lead on this conversation."
Trustee Ann Teich noted the district is facing decreasing enrollment and said the district needs to launch a campaign to draw more students to the district.
Board President Vincent Torres said he agrees. During the summer break, he said while watching TV he noticed an abundance of advertisements for local charter schools.
"It was sickening," he said. "I couldn't believe that they have the money to advertise to get kids [to come to their schools], yet we don't, yet we can't compete with that. I think we have an excellent story. I think we have excellent schools. We need to reclaim our students and to have a campaign to increase [enrollment] that we have lost."
Tax rate
Tax rates are made up of two parts: maintenance and operations (M&O) and interest and sinking (I&S). For AISD, the two rates are $1.079 and $0.163 per $100 of valuation, respectively. They combine to make up the current tax rate.
Information provided in April 2014 showed a projected increase in property tax values, so as a result the district is proposing a two-cent decrease in the I&S tax rate in FY 2015. The FY 2014 current I&S tax rate of $0.163 per $100 of taxable value would decrease to $0.143 per $100 of taxable value in FY 2015.
However, the budget also states this may change as AISD continues in the budgeting process and seeks strategies to meet district funding needs, including a possible tax ratification election. According to state law, a school district must hold a TRE to raise its M&O rate above $1.04 per $100 of property valuation. AISD held a successful TRE in 2008 and raised its M&O rate to $1.079 per $100 of valuation.
State law requires school budgets be approved by Aug. 31. The district usually adopts both the budget and the tax rate in the same evening, but the Chief Appraiser has said there will be a delay in providing the 2014 certified appraisal roll the district normally receives by July 25. The budget is scheduled to be approved Aug. 26 following a public hearing, and the district must adopt its new tax rate by Sept. 29 or 60 days after receiving the certified appraisal roll, whichever date is later.
More information is available at www.austinisd.org.
