A near-$1 billion Austin ISD budget and unchanged property tax rate are on the books for fiscal year 2014.

At its Aug. 27 meeting, the AISD board of trustees unanimously approved the district's budget—projecting $996.75 million in expenditures and other uses and $968.76 million in revenue and other sources—as well as the same tax rate as 2013, $1.242 per $100 of property valuation.

The district is facing a shortfall of about $30 million, board President Vincent Torres said.

"Even though we know [the shortfall is] a large amount of money and at some point we're going to have to have a tax ratification election to carry us forward, we're still able to use some of the money that we've been saving in the fund balance," he said, explaining the district started planning for reduced revenue streams about five years ago when changes were being made to school funding in the Legislature.

What the budget pays for

Most of the general fund, which pays for the district's basic operations, will go toward instruction costs ($436.9 million) and contracted instructional services ($117 million), according to budget documents.

The district plans to make payments on its debts, using nearly $104 million from its debt services fund and $488,613 in general fund money.

About $78 million will go toward maintaining grounds and facilities and $41.2 million will go toward food services.

Texas public school financing law requires "property-rich" districts such as AISD to send some of its property tax money to the state to be used to bolster poorer districts. Roughly 12 percent of AISD's overall revenue will go to the state in recapture payments, and related costs will increase by $467,769, according to the district.

Trustee Cheryl Bradley said she wanted to emphasize that while AISD is receiving about $73 million from the state, the district will send about $117 million to the state for recapture.

"We are not sending anything 'back' to the state," trustee Lori Moya added. "... It didn't come from the state in the first place. This is brand new funding to the state of Texas so that they can fund education because they're not funding education the way that the [state] Constitution requires the state of Texas to do."

Budget's effect on teachers

During the 2013 fiscal year, the district implemented a one-time payment to staff equivalent to a 3 percent raise. The 2014 budget's general fund includes money to maintain the raise for another year and add another 1.5 percent increase to be paid in two lump sums to regular staff, according to board President Vincent Torres.

"We have a lot of good teachers and administrators in the district, and we need to continue to try to stay competitive," he said, adding: "It doesn't really catch us up [to other school districts in the area]. If anything, I would say it allows us to maintain or perhaps not fall further behind, but it doesn't help us to move up or gain any ground on any of our competitors."

Unlike the 3 percent bump, the 1.5 percent adjustment is not pensionable.

Jeff Jamail, who has taught at Covington Middle School for the past 22 years, said he thinks the board should make its pay raises count toward retirement.

"I would hate for our salaries to go backwards," he said. "I don't think that would be very good for teacher morale."

Resident Monica Guzman said her research showed six of AISD's chief employees, including the superintendent, have six-figure salaries and suggested that money be allocated differently in the budget.

"Perhaps instead of paying executive and the [administration] level as a private corporate entity ... we need to think of what this is; this is a public school district. It's supposed to be for the children," she said.

Background and tax rate

AISD Chief Financial Officer Nicole Conley-Abram told trustees at a work session earlier this month that the district will draw from its reserves next year, but most likely will not take out the amount of the budgeted shortfall, she said.

For the 2014 fiscal year, the board approved the same tax rate as 2013, $1.242 per $100 of property valuation. Tax rates are comprised of 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.

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.

State law requires school budgets be approved by Aug. 31.