The big picture
AISD Chief Financial Officer Eduardo Ramos presented the preliminary budget during a board meeting April 4, predicting a $60 million shortfall. District officials are aiming to achieve $30 million in cuts, so a $30 million shortfall would be assumed instead, he said.
“The $30 million in cuts does not get us to a balanced budget,” Ramos told Community Impact. “But it gets us closer to where we feel comfortable as far as having to use some of our fund balance, our savings.”
The breakdown
The general fund was drafted under the following assumptions that affect district funding for the 2024-25 academic year:
- An enrollment of 73,100 students
- An average daily attendance rate of 92%
- An average daily attendance of 67,787 students
- A property value growth of 10%
- A growth in tax collections by 10%
- A tax collection rate of 99%
- A proposed tax rate of $0.8189 per each $100 of property value
For the 2023-24 fiscal year, AISD passed a $2.1 billion budget with a $52 million shortfall.
AISD Superintendent Matias Segura said the district faced a financial burden after taking on last year’s shortfall due to recent action from Texas lawmakers to keep basic student allotment the same as it has since 2019 at $6,160 per student.
This has led to 43% of school districts in Texas anticipating budget cuts this upcoming fiscal year, according to a survey conducted by the Texas Association of School Business Officials.
“The hope was that with the Legislature having a $33 billion surplus, they would use some of that surplus to increase the [the basic allotment], and after several special sessions, that did not occur,” Ramos said. “So now we are having to make some difficult choices.”
The basic student allotment is a major factor in public school funding, and according to Raise Your Hand Texas—a nonprofit organization that advocates for Texas public schools—increasing it would offset higher costs public school districts and public charter schools are facing.
Ramos said inflation increased by 3% since the basic allotment was last raised. Inflation is impacting multiple costs school districts cover, and without corresponding increases in state funding, it has contributed to budget challenges.
The Texas Legislature only meets every two years, so AISD will not be able to make any budget increases for either the 2024-25 or 2025-26 school years.
Managing the impact
Ramos said personnel expenses make up 87% of budget expenditures. The 2023-24 fiscal year budget included a compensation package with a 7% raise for teachers and additional pay increases for all district staff.
This is why staffing is slated to be part of the $30 million in cuts that district officials will likely make, the majority of which will be vacant positions, Ramos said, though there could also be cuts to filled positions as well. He said the district’s goal is to minimize impacts to filled roles and to campus roles. Cuts will not include staff compensation.
“There's a lot of intentionality with everything we do, and it's not lost on us that ... all of these things do impact people's lives,” Segura said April 4. “But, at the end of the day, it's all in service to our students here at [AISD] and the staff that support them.”
Other cuts for consideration include contracts with vendors for services and software purchases.
“We want to impact the classroom [the least amount possible], and so we are concentrating our efforts outside of the classroom with regards to our budget reductions,” Ramos said. “The goal is to not impact student services.”
Aside from cuts, the board of trustees will decide whether or not to ask voters for a property tax increase this November in order to generate up to $46 million in additional revenue for AISD, Ramos said.
A tax increase would raise the district’s recapture payment, and AISD is already the highest paying recapture district in Texas. This means some of the district’s property tax revenue is collected back by the state and redistributed to fund other school districts and charter schools, according to the Texas Education Agency.
Board member Kevin Foster said that he’d only support a tax increase if it is “fiscally prudent” to “serve students.”
What’s next
Staff will continue looking into investment and revenue options for consideration. The preliminary budget Ramos presented can be viewed here, along with the presentation from the board meeting here. All costs and numbers are preliminary and subject to change prior to the budget's adoption this summer.
The following are key dates to know throughout the budget process:
- April 11: Travis County Appraisal District releases preliminary property values
- May 9: draft of the FY 2024-25 budget presented at board information meeting
- June 20: public hearing and budget adoption held during board meeting
- July 25: property values are finalized by TCAD
- August: board of trustees adopts tax rate and decides on calling a tax ratification election
For more information, visit www.austinisd.org.
