New funding requests, compounding costs and lower-than-projected property tax revenue has pushed the Austin school district’s budget deficit from $92 million to $110 million, prompting officials to implement a spending and hiring freeze, interim Chief Financial Officer Katrina Montgomery told board members.
The district will need to cut $32 million from its $954 million operating budget this school year to reduce the deficit to $78 million, Montgomery said during the Thursday night board meeting.
Like many other districts across Texas, Austin is clawing its way out of a deficit by enacting austerity measures amid rising inflationary costs. The district will begin its hiring freeze Feb. 28.
If the district does nothing to reduce the deficit this school year, it could start to run into cash flow issues, Montgomery said.
The district had already been on a budget-cutting path as it began the school year with a $119 million deficit. That deficit shrank to $92 million after Austin voters in November approved raising the district’s property tax rate.
The district has already cut $26 million from its budget this year, mostly in the central office’s operations, and it had an additional $8.48 million in cuts planned.
The district this year had $52 million in new costs come from additional funding requests the finance department received, including $16 million for special education, $7 million for instructional materials, $6 million for service center repairs and $4 million for technology, Montgomery said. And due to a change in budgeting for transportation, the district will miss out on $12 million in revenue it had counted on from the School Health and Related Services program, which allows school districts to be reimbursed for some Medicaid-related health services, such as therapy or physician services.
The district has also been spending on overhauling its special education department after a 2023 order from the Texas Education Agency mandated the district to address its chronic backlog in overdue evaluation requests from families seeking services for their child.
The district spends almost $170 million on special education. It receives about $96.6 million from the state for specific special education programs.
In past years, the district has been able to grant some additional funding requests throughout the year because of continued property value growth in Travis County, Montgomery said.
This year, however, the Travis Central Appraisal District initially predicted 6% growth in property value, but it shaped up to be closer to 1%, resulting in lower revenue from property taxes for the district, Montgomery said.
The district must commit to an “honest budget,” Superintendent Matias Segura said.
“In years past we have benefited from ever increasing property values that have allowed for adjustments throughout the year and chances to recover, and we don’t have that luxury moving forward,” Segura said.
“It’s hard to see us slipping into a bigger deficit,” school board President Lynn Boswell said.
Other Central Texas districts are also struggling with budgetary woes.
The Eanes school board in January decided to close Valley View Elementary School and end its Spanish immersion program to cut $2.6 million from what would have been a $6.3 million budget deficit next school year.
The Leander school district announced Feb. 5 it would slash about 200 campus-level positions and cut its central office budget by $3 million next year to help reduce its $34.4 million deficit.
In Austin, Boswell said she is grateful for voters’ decision to raise the tax rate, which pumped an additional $41 million into the district. About $20.8 million went toward teacher raises and hiring interventionists to help struggling students, but the rest went to paying down the deficit.
State lawmakers have vowed to provide more funding for public schools during the ongoing legislative session, which ends June 2. Budget proposals from the Texas House and Senate offer close to $5 billion in new funding for public schools.
The Austin district, however, is building its budget supposing no new state money is coming, Segura said.
“We’re not assuming any future funding from the state and time will tell what occurs,” he said.
The school board will have a deficit-reducing strategy workshop Feb. 27.
发表回复