AISD: The First Carstarphen Budget
New AISD superintendent prepares her first whole budget
At the moment, board President Mark Williams said, "We're in that pause phase." With the board on its summer hiatus, there won't be any real movement until they meet again at the end of July. With the deadline for passing a new budget tied to the start of the new school year, Aug. 23, Conley-Abram said, "While it would be nice to have 100 percent closure, I think we're in a good place." Last year, the board made multimillion-dollar changes to the budget up to the final vote. This time around, Conley-Abram said, "I think that we'll be able to choreograph the ... budget in August, [because] we've got early discussion and consent from the board to move forward with our proposal as it is."
Yet there's still some work to be done before a final vote. Board Vice President Vince Torres described the negotiations as "similar to or maybe a couple of million below where we would normally be at this time of year." The difference, he said, is that "Forgione was very good at baseline budgeting. He'd say, 'This is truly what we had last year, and when you compare the things we had to do last year with the things we have to do this year, here are the changes.'" Because Carstarphen has switched some items in and out of essential spending, the board's job has become more complicated, as "you end up not having an apples-to-apples comparison," Torres said.
District staff made their final presummer 2010-11 budget presentation to the board on June 7. Planned expenditure has risen to $841 million, up from both last year's $819 million and the February draft proposal of $838 million. Between drafts, the anticipated Chapter 41 "Robin Hood" payments to the state have dipped by roughly $3 million, that cash being offset by an extra $6 million for essential new investment in priority projects – including multiple pathway schools, strategic compensation, and additional translators. However, while planned spending has gone up, predicted revenue has drifted down. Back in February, staff was expecting $838 million for the next year. By June, that figure dropped to $834 million. On April 22, the board authorized Carstarphen to draw up to $7 million from the district's fund balance to cover select mission-critical programs from the district's new 2010-2015 strategic plan. If the current plan is adopted and estimated revenues hold when Travis County certifies property tax appraisals on July 26, Conley-Abram expects that she'll only be requesting around $6.3 million out of that cap – well below last year's predictions of $15 million to $25 million in deficit spending.
The long-term plan is to be able to move beyond the district's current year-to-year budgeting and instead, like the state, draft at least on a biennial basis. Because the district works from three-year financial forecasts, Conley-Abram said, "We have the tools and the analysis to do that now, [and] certainly we could do a two-year budget for the '12 and '13 [academic years]." However, not every decision is in the district's hands: In 2009 the Legislature passed major school finance reforms, and while it is unlikely that school spending will be a major priority next session, the bill established a new Select Committee on Public School Finance Weights, Allotments & Adjustments to investigate rebalancing the state contribution to education funding. Formula funding currently covers the bulk of any losses in property taxes. That's been particularly welcome this year, when Travis County's early estimates have fluctuated from an 8% drop to merely stagnating. Conley-Abram said: "You're counting on the formula to stay whole, and that's the big question mark. Is the state going to fulfill its obligations?"
The other fear is that with a predicted $18 billion state deficit, legislators will start eyeing districts' fund balances as a way to cut their contribution to schools. Statewide, Texas school districts hold roughly $7 billion in reserve, and while districts may only be encouraged to spend a small portion of that, Conley-Abram warned that AISD doesn't have much leeway. While its total reserve is equal to roughly 20% of the total budget (or two to three months of operating costs), only two-thirds of that is unallocated, the rest being dedicated for future authorized spending. Historically, the district's unallocated reserves have fluctuated between 14.5% and 15.5%: "I would go as low as 13%," said Conley-Abram, "but it would erode our bond rating." While bond rating agencies aren't the sole arbiter of fiscal stability, she said, "All they care about are your reserve levels, and that just translates into bigger costs for the taxpayer, as it costs us more to borrow and satisfy our debt obligations."