AISD Budget

Happy days?

AISD Superintendent Pat Forgione will have to retire, at least for the time being, his familiar speech about Austin trying to educate an increasingly needy student population on a "fixed income." For the first time in three fiscal years, AISD has presented a balanced budget that won't require staff cuts or digging into the savings account. The preliminary $604.4 million that will be spent during the 2006-07 school year is almost $56 million more than last year's budget, and there's more money available if the AISD board of trustees has the cojones (or the chutzpah) to vote to raise taxes.

The new money washed into the district after a perfect storm created by Texas legislators and Austin real estate investors. The recent school-finance legislation (HB 1) lowered the local property tax by around 11 cents per $100 of valuation and dramatically cut the amount the district has to give back to the state under the recapture (aka "Robin Hood") system. The TEA hasn't released the official formula yet, but AISD has estimates that will return $71 million to the state in 2006-07, down from $135 million last year. Meanwhile, Austin property values rose a whopping 12%. This rare combination of factors gives the district a chance to invest in priorities that it has postponed for years.

The district's rank-and-file employees will be the main beneficiaries of the windfall. Last year, the district was only able to provide a one-time stipend of $1,000 to teachers, counselors, and librarians who completed the school year. This year, both teachers and classified employees (e.g., staff, janitors, and bus drivers), will receive a 7.5% raise. "I want to send a clear signal that the Austin school district values and respects our hardworking and productive employees," said Forgione. "There's been no joy in not having the revenue available to afford these essential funding requests."

The salary increase is not simply due to AISD's generosity. The Legislature gave AISD $11 million so that every teacher could have a $2,000 raise. AISD is adding another $22 million or so, which will allow the district to increase the raise by roughly another $1,200 for most teachers, extend the raise to the district's classified employees, and pay for an increase in health care premiums. The district's windfall will also be used to hire 211 additional employees to keep up with student enrollment, cover the increase in fuel costs, and pay for the district's ambitious high school redesign program.

Yet, after years of living above its means, AISD is still expected to have the lowest fund balance in 10 years – an estimated $50 million. (The fund balance, the amount of money left over at the end of the year, is essentially the district's savings account.) And, not only does AISD need to save for a rainy day, the fund balance is used to determine the district's bond rating and, therefore, the interest it must pay on borrowed money. "In my opinion, the fund balance is not low enough to affect the bond rating now," said AISD's Chief Financial Officer Larry Throm. "But we are very close."

And there are other unmet needs as well. Three years ago, the district cut 60 art, music, and PE teachers in order to meet a record budget shortfall. At a public hearing on Thursday, a half-dozen or so teachers showed up to press the board to reinstate the positions. "I'm now teaching classes of 30 kids or more," said Elizabeth Abrahams, an art teacher at Galindo Elementary. "There's just no time to help kids who might need individual attention, or to maintain order. I had a student the other week [who] was running around cutting other people's clothes with a scissor. It's just too many kids to manage safely."

AISD had also originally proposed putting around $3.8 million into a fund that could be used for a teacher incentive and support program, but that was cut from the preliminary budget after revenue projections proved overly optimistic. The money could have been used to find creative solutions to a perennial problem: Many of the district's most experienced teachers are in schools with the wealthiest students. "We were hoping to create a mentor program that would allow experienced teachers to take time off from teaching in order to train new teachers in the classroom," says Louis Malfaro, the president of Education Austin, the local teacher's union,

The AISD board of trustees has the ability to pay for these programs and invest millions in the fund balance, if it has the will to do so. The Legislature gave school districts the ability to raise an additional four cents per $100 of property value for the next two years (after that, tax increases will require a citywide vote). "We're not even talking about raising taxes right now," said Throm (who, indeed, refused to answer any questions about what a tax increase would mean for the budget). The teacher's union, however, is not being coy. "We need to start talking now about raising those four cents," Education Austin vice-president Bruce Banner told the AISD board. "The district only has this opportunity for the next two years. The people of Austin support the school district, and we will be your sword and shield if you need us." Banner says the four pennies would raise $17 million for the district over the next year.

The board hasn't even really begun to wrestle with the implications of a tax increase. At a June 22 public hearing, board member Karen Dulaney Smith did offer that "maybe it's time to start talking about those four pennies," but she didn't have many takers. It's clearly difficult to advocate for a tax increase when most Austinites are already going to pay more because of rising property values, and the district is doing better than it has in years. Still, AISD has a rare opportunity to put some money in the bank and to make an investment in needed staff and programs. After all, Forgione has spent years telling the world how he could help the district's neediest children graduate and succeed – if only he had the resources. Well, now the money is there for the taking. The board will adopt a budget and tax rate at the end of August.

AISD Income (in millions)

Local revenue (property taxes): $613.6 (90.9%)

State revenue: $59.6 (8.8%)

Federal revenue: $1.6 (0.2%)

Other Resources: $0.6 (0.1%)

Total Income: $675.4 (100%)

AISD Spending

Instruction: $390.9 (57.9%)

Plant Maintenance & Operations: $87.7 (13.0%)

Intergovernmental Charges (primarily recapture): $71.8 (10.6%)

Student Support Services: $54.1 (8.0%)

Instructional Related Services: $44.0 (6.5%)

Administration: $17.5 (2.6%)

Ancillary Services: $5.0 (0.7%)

Transfer Out (Pre-K): $3.6 (0.5%)

Debt Service: $0.7 (0.1%)

Total Spending: $675.4 (100%)

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Austin Independent School District, AISD, Pat Forgione, HB1, Texas Legislature, Larry Throm, Elizabeth Abrahams, Louis Malfaro, Education Austin, Bruce Banner, Karen Dulaney Smith

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