Austin ISD Faces Budget Deficit, Staff Pay Stagnates Without Voter Help

Austin, Texas

Acknowledging a looming budget deficit, the Austin Independent School District (Austin ISD) Board of Trustees has approved a budget for 2024-25 that demands a substantial withdrawal from its savings account. The district’s yearly operating budget rounds up to an impressive $954 million after Thursday’s vote.

The Deficit and Its Future

The projected deficit for the coming fiscal year heavily depends on the administration’s decision to call a Voter Approval Tax Rate Election (VATRE) in November, and the subsequent outcome of the election. Anticipating failure of the VATRE, the administrators estimate a $78 million deficit, even after implementing $29 million worth of spending cuts that include axing 60 positions in the district’s central administrative office.

“The $29 million in cuts did come from non-campus-related expenditures and so that was the ultimate goal for the district to make sure we made cuts in areas that did not (directly) impact the classroom,” said Chief Financial Officer Ed Ramos.

Addressing the Deficit: A Possible Tax Rate Increase

If the trustees opt to propose a new tax rate and are successful, it’s projected to generate substantial revenue, reducing the deficit down to $41 million. The proposed tax rate would be $0.9287 per $100 of taxable value, resulting in an extra $35 per month for a home valued at $563,000.

The Implications for Employee Wages

But this initiative doesn’t solely aim to cut the budget deficit. It also plays a critical role in ensuring pay raises for staff. The previous year, a $52 million deficit ratified by the school board facilitated the increase of the hourly minimum wage from $16 to $20, and subsequently boosted the salaries of teachers, librarians, and counselors by 7 percent.

However, this year, due to stressed finances, the district officials have indicated that significant pay hikes can’t be made without the enactment of the new tax rate.

Compensatory Measures and Their Repercussions

If the VATRE is successful, $17.3 million from the revenue will be used for market rate adjustments for the more experienced employees, along with a $500,000 fund for a 25 cent per hour wage increase for all classified staff members. However, without this added revenue, the employees are set to receive one-time payments in December, with benefits-eligible full-timers receiving $500 and part-timers $250.

The district’s struggle to retain more experienced teachers, whose pay trails that of other Central Texas school districts, is evident. This situation, paired with the potential increase in tax rates, further complicates the issue for employees and voters alike. The school board has until Aug. 19 to decide whether to put a VATRE on the November ballot.

Other Considerations in the Budget

A significant expenditure for Austin ISD in the upcoming fiscal year is its recapture payment. This system, dubbed Robin Hood, was instituted by the Legislature in 1993 to redistribute funds from high-value districts to those with lower property value. With a recapture payment of $821 million, Austin ISD has the highest in the state.

Given the uncertain future of school funding and the potential effects on the budget, the district will have to continue seeking ways to reduce costs and maintain fiscal stability.