Austin ISD is facing some tough choices as it begins to develop its fiscal year 2014–15 budget.

For the past few years, the district has drawn money from its reserves to pay for expenditures, including temporary one-time salary adjustments for staff, Superintendent Meria Carstarphen said.

The district will face a shortfall of about $30 million for the 2013–14 fiscal year, and while the board approved the use of reserves to maintain those salary adjustments for staff, the district must now look for permanent revenue streams as part of planning for its 2015 budget, she said.

"I think the district would have been in a far better situation if the bottom hadn't fallen out in the Legislative session before this last one, but we were well on the road to recovery and then, you know, like everybody else across the state of Texas, we had to deal with the reality of our fiscal landscape under the state," Carstarphen said.

AISD Chief Financial Officer Nicole Conley-Abram presented preliminary budget documents including budget parameters and a presentation about the 2015 budget to board members at the trustees' Sept. 16 work session. She said that during the past few years, AISD has implemented about $77 million worth of cost containment strategies and budget cuts. In terms of cost strategies, she said "unpopular" options remain, such as rescinding its one-time pay adjustment for staff, facilities consolidation and boundary changes. In 2015, the district will most likely need to call for a tax ratification election, or TRE, she said.

"We could constrain spending to access reserves for another year, but it's clear to me that with escalating costs and the need to address salaries, that a TRE is in our imminent future," Conley-Abram said.

A school district must hold a TRE to raise its M&O rate above $1.04 per $100 of property valuation, according to state law. In 2008, AISD held a successful TRE and raised its M&O rate to $1.079 per $100 of valuation. The district's current tax rate is $1.242 per $100 of property valuation. Tax rates comprise two parts: maintenance and operations (M&O) and interest and sinking (I&S). The two rates are $1.079 and $0.163 per $100 of valuation, respectively. They combine to make up the current tax rate.

Trustee Robert Schneider said he agrees a TRE will be necessary.

"Still, I don't think [a TRE] is going to be the miracle that everyone would like to see I think we really need to look at any cuts that we can make along the way," he said.

Even with a TRE asking for nine cents—the maximum amount the district could seek—AISD would still need to limit spending, Conley-Abram said. She added enrollment in the district is expected to decline, and its expenditures greatly exceed what revenue will likely be.

On Sept. 30, the board is scheduled to take action on its 2014-15 budget parameters and budget development calendar.