Almost a year after the Austin Independent School District board of trustees made the declaration of financial exigency, the board voted unanimously to remove the state of financial crisis status.

Board president Mark Williams said that the action is a good sign, but not a complete relief.

"What it's signaling is that over the next year and the next school year, we're not going to have to go to a reduction in force," Williams said. "There's been enough financial planning to get us up to the next legislative session. But who knows what the future is going to hold?"

Austin ISD Superintendent Meria Carstarphen presented her case to the trustees at the Jan. 30 board meeting, saying that the district is on sound financial footing for now. Much of what she said echoed her State of the District Address in November 2011, when she announced that she would request that the board remove the declaration.

"When we were in the moment last year, it was really hard for people to see why it was important that we bring sound closure and be smart about the elimination of positions and think through programs that perhaps weren't the highest-quality programs," she said in November.

Financial exigency allowed the district to terminate contracted teacher positions without the risk of unlawful termination lawsuits. The situation that allowed the board to lift the order was in stark contrast from when the board—by way of a 7–2 vote—put the tag on in March 2011 after the state Legislature cut $4 billion in education funding, forcing more than 1,100 job cuts district-wide. Of those cuts, roughly 650 of those employees have been rehired, according to staff data.

The direction also shows progress toward a staff salary increase that the superintendent advocated in the November address, which could be as much as 3 percent. According to numbers provided by AISD, the cuts made in the past year have helped to build up reserve funds that could pay for an increase in wages. The district's current fund balance is about $179 million.

Sustaining such a raise, however, could mean a tax-rate hike in future years via tax-ratification election.

"While we provide Social Security and other benefits, on a pure cash basis, we are not as competitive as we need to be," Williams said. "We know there's a lot of pressure on our taxpayers today, but the indication from the state is that we're in a quandary where the state continues to lower the support with the expectation to put lower demand on your local taxpayers."

The district's current tax rate is $0.09 per $100 of assessed value lower than the state maximum. Williams said that the district is considering what the impact to the taxpayers would be, and weighing that against population growth and rising standards.

"At some point, long-term, we're going to have to get additional revenue," he said. "It also may be that the Legislature comes back next session and goes the way opposite from what they had done last session, which is potentially provide additional resources to school districts."

Currently, 88 percent of the district's expenditures are invested in pay and benefits. Williams said that in the case that there is no tax-ratification election and further reductions from the state Legislature, the district may base raises on one-time increases that expire each year based on what the district can afford.

The decision to increase the tax rate hinges partly on pending litigation on the Texas school finance system. Last year, the district joined a lawsuit that claims the system is inefficient and arbitrary.