The Austin ISD Board of Trustees voted to approve a 2024-25 budget that will require the district to dip into its savings account to the tune of tens of millions of dollars.
Austin ISD’s annual operating budget will total nearly $954 million after a vote on Thursday. How large the district’s budget deficit will be during the next fiscal year largely hinges on whether the school board calls a Voter Approval Tax Rate Election in November and the outcome of that election.
Without a successful VATRE, administrators anticipate a $78 million deficit. That is even after making $29 million in spending cuts, which include eliminating 60 positions within 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,” Chief Financial Officer Ed Ramos said.
If trustees do decide to ask voters to approve a new tax rate — and they do — it’s expected to generate enough revenue to help reduce the deficit to $41 million.
The Austin ISD tax rate would be $0.9287 per $100 of taxable value, or an extra $35 per month for a home valued at $563,000.
A VATRE won’t just help Austin ISD reduce its budget deficit though. It’s also key to ensuring staff get pay raises. Last year, the school board signed off on a $52 million deficit to raise the hourly minimum wage from $16 to $20 and increase teacher, librarian and counselor salaries by 7%. But this year, district officials said money is so tight they can’t offer much in the way of higher pay without the approval of a new tax rate.
Ramos said the revenue from a successful VATRE would give the district enough money to pay for a market rate adjustment for some more experienced employees, but not an across-the-board raise for all staff.
Austin ISD salaries for teachers with at least seven years of experience currently lag behind those of other Central Texas school districts, Ramos said. Chief of Talent Strategy Brandi Hosack also told trustees the district is struggling to hold onto more experienced teachers because they’re below market rate.
“We talk at the board level, and often, about how much we need experienced teachers, effective teachers in front of our kids, and we are unable to do that if we continue to bleed out at the seven-year mark,” she said. “We are dropping off rapidly at that seven year mark, and we have to do some catch-up just to even be competitive.”
If trustees call a VATRE and it succeeds, the district will spend $17.3 million to make market rate adjustments and another $500,000 to raise the hourly wages of all classified staff by 25 cents.
But without the funds generated from a new tax rate, employees are only set to get one-time payments in December. Full-time employees would be on deck to get a $500 incentive payment. Staff, who are not full-time but are eligible for benefits, would receive a one-time payment of $250.
Ken Zarifis is the president of Education Austin, an employee union that negotiated the compensation agreement with Austin ISD and supports calling a VATRE. He blamed Gov. Greg Abbott and other lawmakers for putting school districts in a tenuous spot by refusing to “fund public education adequately.” He added that even though this budget doesn’t come close to offering the same compensation as last year’s, it’s a step in the right direction.
“While this budget may not be the most glorious budget as we had last year…it is the right budget for this moment,” he said.
The school board has until Aug. 19 to decide whether to put a VATRE on the Nov. ballot.
Another big expense for Austin ISD during the next fiscal year is its recapture payment. Recapture, or Robin Hood, is a system the Legislature created in 1993 to take money from property wealthy districts and redistribute it to ones with lower property values. Austin ISD has the highest recapture payment in the state. District officials estimate next year’s payment will be $821 million.
Although the Austin ISD school board has approved a new budget, district leadership said they need to keep looking for ways to cut costs. Superintendent Matias Segura said eventually getting to a balanced budget in the years ahead will require the district to reduce its operating budget by 8% or $78 million. He said he doesn’t want Austin ISD to be left in the lurch if another legislative session goes by without an increase in the base level of per student funding.
“I want to move into the next legislative session with as little reliance on the need for additional funding as possible,” he said. "I do acknowledge $70+ million is an ambitious goal, but I would like that to be the goal.”
