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AISD Projects $45 Million Shortfall in 2014 Budget

The Austin Independent School District is estimating it will have a $45 million shortfall in its 2014 budget. The district is holding a community meeting tonightto discuss spending priorities.

AISD officials say there are a few reasons for the projected budget shortfall. Most of the deficit is money that will be taken or “recaptured” from AISD – a district considered property rich. That money is then distributed to districts that are considered poorer.

The other reasons for the shortfall are increased healthcare costs, and a one-time pay increase for employees.  

“We were hoping we’d get some relief out of legislature and that doesn’t look like it will happen for Austin. So we’re just trying to steady the ship," AISD's Chief Finance Officer Nicole Conley said.

Conley says the district doesn’t expect to make cuts. But, at this point, any budget additions would come from state lawmakers

Last legislative session, lawmakers cut public education by more than $5 billion. Those cuts hit AISD hard. The district lost nine percent of funding per student. Now, the Texas House of Representatives is considering a proposal to return $500 million to school districts. But since it would return that money to districts based on property taxes, the Austin Chamber of Commerce’s Drew Scheberle says that guarantees Austin won’t get a large chunk of the pie.

“Some school districts will have all of the cuts restored and will get back more money and others, as a result of those formulas, will get practically nothing of their own money that was cut," Scheberle said.

Scheberle says if it is approved, Austin would get four percent of money cut, while San Antonio would receive 150 percent. Ken Zarifis with Education Austin says that’s a sign the distribution system needs to change.

“I’m not saying that we shouldn’t contribute to a funding base that contributes to all Texas schools. But we’ve got to re-think it," Zarifis said.

Regardless of what happens at the statehouse, AISD plans to make up the shortfall with its reserves. It’s the second year in a row the district would do so. Chief Finance Officer Conley says using reserves helps AISD figure out a financial remedy for the future. But she calls it a short-term solution.

“I’m pretty confident we won’t have any adverse effects as a result of this but we definitely need to protect our reserves. It’s important for us for our cash flow purposes," Conley said. "This is the last year, we’re looking at a two-three year max solution.”

The preliminary budget also allows for a one and a half percent pay increase for employees – only for the upcoming academic year. That still needs to be approved by the AISD School Board. The budget also provides money for dual language and fine arts programs. The Austin School Board will vote on a final budget in August.  

Tonight’s budget meeting starts at 6 p.m. at Summitt Elementary in Northwest Austin.

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