AISD Headed Back to Exigency?

Memo paints bleak portrait of school district budget

AISD Headed Back to Exigency?

Austin Independent School District's administration has sent a memo to staff containing two major bombshells: A hiring freeze for all vacant non-campus staff positions, and the threat of declaring financial exigency.

Exigency is the equivalent for a superintendent of when a president invokes wartime powers: It gives them the leeway to make major structural and staffing changes. How similar to wartime powers? The memo refers to a "RIF (Reduction in force)." That's now the common term in government for staff cuts, but is originally a military term.

The memo says the decision is based on a "$7.1 million structural deficit for FY2011" and the superintendent's wish to find $8.6 million for new projects. The big problem, financially speaking, was summed up last year by special assistant to the superintendent Milan Sevak, who said declaring exigency "would kill our bond rating."

Last time the district did this was in 2003, when the process was expected to net a total of $3 million (with other reforms and budget cuts, the final total was $39 million saved over the next year, but with over 400 positions cut.) However, this raises three issues:

One: How big will this leave the district's reserves? AISD has argued that it needs to keep them high for the long haul: But how high is high enough? Education Austin president Louis Malfaro has repeatedly argued that the district has left the reserves unnecessarily high for their claim that it's about defending the bond rating.

Two: How did the district end up with a structural deficit? Many experts, such as Dick Lavine of the Center for Public Policy Priorities, have pointed out the basic flaws of depending on property taxes to pay for schools

Three: Why the urgency? District budgets fluctuate wildly between years, and rarely look the same at the beginning of the budget process as they do at the end. (Case in point: This year's budget started off with around $865 million in general revenue expenditure, but when passed was closer to $819 million.)

The full text of the memo below:

The administration has been working with internal and external stakeholders for the last several months to develop the FY 2011 Preliminary Budget according to the Board adopted timeline. In order to avert a projected $7.1 million structural deficit for FY 2011, and to identify reprogramming needs of $8.6 million to cover base expenditure costs to implement components of the strategic plan, including a targeted approach for academically unacceptable schools, a number of budget reduction options are being considered. The culmination of many of these options may result in the administration proposing that the Board affirm a declaration of "Financial Exigency." While this independent action does not commit the Board to any specific steps related to the Reduction in Force (RIF) of personnel, it will give the administration the authority it needs to move forward should these steps become necessary. The Board also has the ultimate authority to subsequently approve the administration’s request for a RIF if so proposed.

As a preliminary measure to address financial concerns, effectively immediately all vacant, non-campus based positions will be frozen. Exceptions to filling any non-campus positions will be at the discretion of the Superintendent.

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AISD, Louis Malfaro, Financial Exigency

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