AISD Prepares to Slice the Apple

School district battles its budget monsters

At the final meeting of Austin ISD's Budget Stabilization Task Force on Nov. 14, Eric Ramos pleaded with the committee to recommend cost-saving measures that would avoid impacting teachers and the students they serve. "When we're making these cuts, it feels like we're only making them in one place: the classroom," Ramos told the dozen or so exhausted task force volunteers assembled in the library of Martin Middle School.

“We can find ways to honor our history, and the best way to do that is to make sure our kids have a brighter future.” – Nicole Conley Johnson

Ramos, a special education teacher at Martin, used his two minutes of public comment to explain how increasing class sizes for middle and high schools – an idea district administrators are still considering – would make his already difficult job more taxing. Adding more students to his classes would give him less time with each of the high-need middle schoolers he teaches. "Honestly, it's not feasible that we will be able to deliver the same level of quality education," he told the task force.

Ramos' concerns have been echoed by many other teachers during the five months since the BSTF was convened in June. Over the course of 11 meetings, the 30-member committee has hashed over a variety of solutions to the district's most pressing problem: how to right-size its budget in the face of declining enrollment. For each of the past six years, AISD has lost more students than it gained, and district staff expect that trend to continue. Meanwhile, the amount the district is required to pay into the state's "recapture" fund – theoretically a tool to equalize school funding across the state – has continued to grow, ironically in part due to the declining enrollment. The combination has put the district on an unsustainable financial path.

For the current 2018-19 school year, the district expects to withdraw $18.3 million from its reserve fund to balance its budget. Unless there's major relief in the form of school finance reform at the state Legis­lat­ure, district accountants project further deficits that within a few years will completely drain AISD's reserves. To soften that blow, district officials hope to cut costs and increase revenues to close what is currently an operating budget deficit of just under $30 million. While there remains much disagreement among various AISD stakeholders about where to find that money, administrators, trustees, and BSTF members all agree that the coming cuts will be painful.

Recapture: The Gift That Keeps On Taking. Over five years – from last school year through FY 2022 – AISD's projected operating budget remains nearly flat; but recapture payments to the state are projected to almost double, putting the budget increasingly in the red. Without serious structural changes to the budget or meaningful reform to the Robin Hood system, the district is set, during that five-year window, to spend nearly $240 million of its savings.

Cornered by Captain Hook

Chief Business and Opera­tions Officer Nicole Conley Johnson told the Chronicle last week that the problem facing AISD leaders is simple: too few students to sustain the district's operating costs. AISD has to "face a new reality" that it will have fewer kids to educate, she says. "We have to rethink how we use our dollars, while looking at our infrastructure and how we can do more with less."

Since 2012, the district has seen a net loss of about 6,200 students. State funding for public schools is closely tied to attendance; AISD expects a reduction of $11.6 million in state funding this year alone. The reasons for declining enrollment are many: Austin is suffering through an affordability crisis, charter schools continue to pose a formidable threat, and neighboring public school districts such as Pflugerville and Round Rock promise quality education for students with much more affordable housing.

Declining enrollment stings AISD twice: the state sends less money, yet requires the district to pay more money into Robin Hood.

But the bigger cause of AISD's budget crisis is its recapture payments to the state. Commonly referred to as "Robin Hood," the recapture system takes local tax revenue from "property wealthy" districts and redistributes it to "property poor" districts. Recap­ture payments are calculated by dividing the assessed property value in a district by student attendance, so declining enrollment stings AISD twice: the state sends less money, yet requires the district to pay more money into Robin Hood (or "Captain Hook," as former AISD Trustee Ted Gordon referred to the system).

In fiscal 2019 (the current school year), AISD is anticipating recapture payments of $673 million – more than half of its local property tax collections. If this trend continues, by FY 2022 – three years from now – a projected payment of just under $1 billion, with a "B," will eat up 60% of AISD's revenue, leave the district with a $103 million deficit, and nearly exhaust its cash reserves. The recapture shell game makes the district's budget woes especially vexing from a community relations perspective. Local taxpayers see their bills growing, with the schools accounting for an ever-larger piece of that pie, but also see district leaders raise alarms about not having enough money.

With the district's financial future on such perilous ground, AISD Superintendent Paul Cruz decided in June to convene the Budget Stabilization Task Force. According to its charter, the group was charged with developing "recommendations to enable the district to meet all of its financial obligations, and remain in alignment with its stated priorities and strategic direction." Given the size and scope of AISD's budget, that would be no small feat for a team of experts working full time on the project – let alone for the 30 volunteers who signed up to spend about 15 hours of work each on the committee and in its meetings.

Time for "Courageous Steps"

Initially scheduled to hold five meetings during summer 2018, the task force quickly realized it would need more time. Adding six more sessions at schools through the district, the task force deliberated ways to save money and increase revenue; its final report will be delivered to Cruz on Dec. 14.

Talking to the Chronicle, task force members and trustees alike expressed satisfaction with how the group has gone about its delicate business. Meetings we attended were orderly, with only brief moments where tensions flared – understandable given the sensitive issues at hand. One frustration was the tight timeline; to effectively strategize ways to boost revenue and cut costs, several members said, they would need more time to thoroughly understand the district's complex budget and the state's byzantine funding system.

Ann Teich (photo by John Anderson)

District 3 Trustee Ann Teich pointed to the district's Facilities and Bond Planning Advisory Committee – which has worked for more than three years to recommend strategies to the board of trustees – as an appropriate model for the BSTF. "There's just too much information to digest in a short amount of time," Teich told the Chronicle. "The task force needs to understand the district's budget, as well as how to digest the overlay of politics and emotions on these issues."

Robert Thomas

As the task force pressed ahead with its work, it formed three subcommittees to look at functional areas where the district could make the biggest impact on its deficit. The Efficiencies, Departments, and Contracts/Procurement group looked at economic disparities throughout the district and how they affect student outcomes; the Revenue and Programs subcommittee examined ways to bring in more revenue – such as through grant programs or increased rental fees for AISD facilities – and to determine the efficacy of academic programs deployed throughout the district; and the Staffing and Compensation subcommittee attempted to balance the need to attract talented teachers, through competitive salaries and benefits, with the mandate to pay down the district's deficit.

Phrases like “no easy decisions” are gestures toward school closures, increasing class sizes, or redrawing attendance zones to shift students to less crowded campuses.

One of the task force's tri-chairs, Robert Thomas, articulated the challenge facing the committee at a work session for the board of trustees on Nov. 12: "The easy cuts have been made, so the downside to serving on the BSTF [at] this time is that there are no easy decisions." Phrases like "no easy decisions" and "time to make hard choices" are gestures toward school closures and consolidations, impacts to teachers such as increasing class sizes, or redrawing attendance zones to shift students to less crowded campuses. Each of those ideas comes with its own political challenges, but Thomas exhorted the board and the district to take "courageous steps."

"We Can't Let Go of History"

The task force has not yet finalized its recommendations; a survey being conducted now allows individual members to vote on which recommendations they favor, as well as to identify conditional "guards" to qualify those ideas. (For example, the task force could recommend the district close schools, but only if closures are not isolated in one geographic area). Thomas told the trustees that boundary changes and school closures could have "a significant financial impact almost immediately," should the board choose to move in that direction.

Proponents of altering attendance zones feel that moving kids across the city from west to east would not only balance student enrollment with campus capacity but also disrupt the district's (and the city's) long-established pattern of east/west ethnic and economic segregation. But boundary changes would almost certainly infuriate school communities in several trustee districts. At-Large Trustee Cindy Anderson thinks shifting boundaries would be more difficult than it might appear. "The problem with adjusting boundaries is that touching one piece has a ripple effect on the rest of the district," she told the Chronicle. "You really have to work on all of it at the same time." Anderson believes the district should first look at boosting underenrolled schools by bringing more attractive programming – such as further expansion and integration of the district's beloved dual-language programs – to Eastside schools. And, she says frankly, the district needs to have honest conversations with the public about the need to right-size its budget. "It's not feasible for us to continue supporting significantly underenrolled schools," Anderson said. "We need to be honest, realistic and transparent about recognizing where we are."

On that point, there is general agreement among trustees, while acknowledging the pain that closing and consolidating schools would cause in the community. Board Vice Pres­ident and District 7 Trustee Yasmin Wagner told the Chronicle that a "resistance to change" was common in the AISD community, but that mentality could lead to "missing out on an even bigger opportunity" to improve education for students. "I want to make sure our communities understand why we're even talking about school consolidation," Wagner said. "I'm not content to leave students in an environment that doesn't serve their needs well, because we can't let go of history."

That's going to be a tough sell to the families that have, sometimes for several generations, attended what are now Austin's most vulnerable schools. For them, the schools' history is essential to the community fabric; instead of closing campuses and consolidating students, they would have the district invest more in those communities to close the gaps that have weakened those schools in the first place.

Conley Johnson feels it's time for the district to engage in those conflicts. "When I look at kids in schools that are physically inadequate and underenrolled, I see it as an opportunity," she said. "Sometimes we have to make uncomfortable adaptations as parents. We can find ways to honor our history, and in my mind, the best way to do that is to make sure our kids have a brighter future."

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AISD, Austin ISD, Budget Stabilization Task Force, Eric Ramos, Nicole Conley Johnson, recapture, Ted Gordon, Paul Cruz, Ann Teich, Facilities and Bond Planning Advisory Committee, Robert Thomas, Cindy Anderson, Yasmin Wagner

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