aisd june 20th budget update

8/6/2019 AISD June 20th Budget Update

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June 20, 2011

AUSTIN INDEPENDENT SCHOOL DISTRICT

FY 2011-12 BUDGET UPDATE

Meria Carstarphen, Superintendent

Nicole Conley-Abram, CFOChristy Rome, Dir. Intergovernmental & Policy


2/19

Senate and House Compromise-HB

1, SB 1 & SB 2, Reduces Permanent School Fund by $4b below what is needed to fund current law

formulas, contrast to January cut of nearly $10b

$1.8b decrease when compared to 2010/11

$1.6b increase in General Fund. However last legislative session, $3.2b in one-

time Federal assistance was used to fund FSP with no funding in 2011/12

For AISD:

reduction of AISD reduction of $37,248,999 in FY2012 from current law, addl

reduction of $20m in FY2013 to $57,991,657

Reliant on a number of one-time funding sources that will not be available in the

next biennium: payment delay ($2.3b), property value growth ($800m), tax speed-

ups ($700m), unclaimed property ($300m), ASF ($200m)

$1.3b in grant/textbook cuts

Special Program Allotments still remain for special education, career & technology,

bilingual and compensatory, which means regular education must take the cuts

1

1


3/19

Senate & House Version of HB 1

and SB 1

FY2012 FY2013

Senate

Version

$4 billion

cut

Reduces the "regular programallotment" to 92.39 percent of its

current level

No changes to target revenueAverage reduction of 5.6%compared to current law

Eliminates NIFA-$125k for AISD

Raises the "regular program allotment" back to98 percent of its current level

Reduces each districts target revenue amount to92.35 percent of its current level

Repeals current law limitation on revenue gainsAverage reduction of 5.4% compared tocurrent law

Eliminates NIFA-$125k for AISD

House

Version

$4 billioncut

Reduces regular program allotmentto 92.39% for most districts,

95.195% for formula districtsMaximum tax rate districts (1.17)get EWL of $339,500 and GL of

$33.95 for pennies above Austin

yield

Raises the "regular program allotment" back to98 percent of its current level, 95.195% for

formula districtsChanges EWL and GL for pennies above Austinyield back to current law levels

2

2


4/19

State Funding Cuts Likely in the Next

Biennium Elimination of ASATR-While SB1 does not identify Additional State Aid

for Tax Reduction (ASATR) cuts beyond FY2013, it calls for its full

elimination by FY2018 which means an annualized loss of $145m for AISD

when fully implemented.

House version of SB1 calls for future appropriation of Target Revenuealong with elimination in 2018.

Structural Deficit-The State used one-time measures to fill $4b of the

budget gap which means that we will face more cuts in the next biennium if

new recurring revenue isnt realized.

Proration changed to percentage reduction in State/Local funds and apermanent reduction to entitlement.

Edujobs funding will provide one-time offset to cuts in first year of

biennium but goes away in the subsequent year and outyears.

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3


5/19

Other State Reductions with AISD

ImpactGrant State Reduction AISD Impact

Technology Allotment $271.0 m $2.4m

Pre-k Grant $223.3 m $4.6m

Student Success Initiative $269.7 m $1.4m

Optional Extended Year $14.1m $370k

DATE/Other $345.1m ($40m remains for

FY2012/13, of which $16m

earmarked)

$10.9m

New Instructional FacilitiesAllotment

$50 .0m $150k-$300k

TOTAL $19.8m-$20.0m

4

4


6/19

Projected Impact on AISD and Changes

Since Revised Budget Presentation in April5

2011-2012

Revised

Budget

2011-2012 SB 1

Budget

Increase

(Decrease)

Revised vs. SB 1

2012-2013

Projected

Budget SB 1

11-Apr-11 13-Jun-11 13-Jun-11

Revenues:

Local Sources 631,912,493$ 632,725,188$ 812,695$ $635,228,006

State Sources (Current Law) 182,621,802 209,085,219 26,463,417 173,386,564

Anticipated State Reduction (79,118,408) (37,248,999) (50,750,361)

Federal Sources 15,287,000 15,287,000 - $16,705,408

Subtotal 750,702,887$ 819,848,408$ 27,276,112$ 774,569,617$

Other Sources 51,000 51,000 - 51,000

Total 750,753,887$ 819,899,408$ 69,145,521$ 774,620,617$

Less: Chapter 41 Recapture Payments (106,832,982)$ (133,515,121)$ (26,682,139)$ (102,727,476)$

Total Revenue Less Chapter 41 Payments 643,920,905 686,384,287 42,463,382 671,893,141

2011-2012

Revised

Budget

2011-2012 SB 1

Budget

Increase

(Decrease)

Revised vs. SB 1

2012-2013

Projected

Budget11-Apr-11 13-Jun-11 13-Jun-11

Total Expenditures:

FY2011 Base Budget 844,230,727$ 844,230,727$ -$ -$

FY 2012 HB 1 Base Budget 834,047,893$

Projected Baseline Increases (Same Services) 15,764,610$ 15,764,610$ -$ 11,312,000$

Strategic Investment Increases 3,871,304$ 3,871,304$ -$ 1,350,000$

Strategic Compensation/Magnet Restoration 1,264,082$

State/Federal Grant Reductions -$ 5,447,627$ 5,447,627$ -$

Recapture Increase (Reduction) (20,982,394)$ 5,699,745$ 26,682,139$ (30,787,645)$Baseline Budget Reductions (45,966,130)$ (42,230,202)$ 3,735,928$ -$

Subtotal 796,918,117$ 834,047,893$ 37,129,776$ 815,922,248$

Other Uses 95,000$ 95,000$ -$ 95,000$

Total 797,013,117$ 834,142,893$ 37,129,776$ 816,017,248$

Less: Chapter 41 Recapture Payments (106,832,982)$ (133,515,121)$ (26,682,139)$ (102,727,476)$

Total Expenditures Less Chapter 41 Payments 690,085,135 700,532,772 10,447,637 713,194,772

Total Expenditure Adjustments -$ -$ -$ -$

Surplus/(Deficit) (46,259,230)$ (14,243,485)$ 32,015,745$ (41,396,631)$

Edujobs Offset -$ 13,798,672$ -$ -$

Estimated Year-End Condition (46,259,230)$ (444,813)$ 32,015,745$ (41,396,631)$

General Fund Revenue Budget

General Fund Expenditure Budget

5


7/19

Projected FY2012 Revenue Adjustments

Increase of .14% in preliminary appraisal values provided

by Travis Central Appraisal District on April 25th which

increases collections by $813k

Final certified not available until July 30

th

Assumed State reduction of $10.6m offset by increase in

recapture of $26.7m

One-time transfer of $13.8m to Edujobs Fund for Pre-k,

addl planning period and secondary Librarians Bottom Line: Potential drawdown on fund balance for

remaining shortfall of $445k in FY2012 if spending

reductions are not realized

6

6


8/19

Projected FY2012 Expenditure

Adjustments

Budgeted expenditures for FY2012 assume the full realization of

projected savings from the 1,153 RIF actions ($60.3m combined

between local and expiring grant funds)

Strategic Compensation restoration to meet Federal grant match

requirements $1.1m

Water rate increase-$130k

Health insurance premium increase based on more months of

actual data under self insurance-$816k Adjustment to savings estimate from part-time social security

program and salary lapse estimates-$2.8m

Offsets to State/Federal grant reductions-$5.4m

7

7


9/19

Managing the FY2013 Deficit

State reductions of $58m and loss of one-time Edujobs funding results in

projected shortfall of $41.4m

Projected increase in Medicaid collections of $1.5m

Projected expenditure increases for enrollment, health, utilities and new

school openings The District will continue efforts to modify health plan and monitor proposed

Austin Energy rate increases to reduce projected increases

The District is seeking $2.4m from State to restore DATE funding. If State

funding is not provided, this will become a financial pressure for the local

budget in the outyears

In order to stabilize staffing in the District for the next two years, the District

will continue to implement cost reduction measures to increase reserve levels

in FY2011 and FY2012 in anticipation of the need to access reserves in

FY2013

8

8


10/19

Bills of NoteThe Living (Finance Related)

HB 1 ($608m) & HB 4 ($184m): Instructional Materials

SB 8 which provides school districts flexibility to furlough, implement

salary reductions, notice requirements etc.

HB 33 Vouchers program that provides taxpayer savings grant of

60% of total M&O revenue

SB 1543 which allows school districts to invest in corporate bonds

Check Registers

Teacher Retirement System-State contribution levels, right to work

Property Taxes-No major changes on property appraisal caps,

homesteads or Chapter 313. Some governance changes.

TRE-No major changes. Some calendar considerations for early

adoption timelines.

9

9


11/19

Bill of Note-Still Dead (So Far)

Significant expansion of charter schools

Private school participation in UIL

Middle school reform

Overhaul of teacher appraisal

Special education voucher arrangements

Pre-kindergarten accountability

10

10


12/19

Other Bills of Note-The Living

Vouchers

Sanctuary Cities-inclusion of school district

Virtual school reform-course approval, adults,

diploma granting

Check registers-on-line posting of financial

documents and transactions (already compliant)

Dual Credit-tuition credit, participation, phys ed. Elections-Military and overseas, runoff dates,

redistricting, bond elections

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11


13/19

Historic Exemptions12

12


14/19

School District Local Exemptions13

State Mandates: Homestead: $15,000, Over 65: 10,000 and Disability: 10,000

Jurisdiction2010 Rate per

$100 Valuation

Disability

ExemptionOver 65

Homestead

Exemption %

Homestead

Exemption LimitHistoric

Austin Community

College 0.0951 115,000 115,000 1% 5,000 -

Austin ISD 1.2270 15,000 25,000 0% - -

Coupland ISD 1.0401 0% - -

Dripping Springs ISD 1.4900 - - 0% -

Del Valle ISD 1.5300 - - 0% - -

Eanes ISD 1.2025 20,000 20,000 0% - -

Elgin ISD 1.5400 - - 0% - -

Hays Consolidated

ISD 1.4613 - - 0% - -

Johnson City ISD 1.1936 - - 0% - -

Lago Vista ISD 1.1800 - - 20% 5,000 -

Lake Travis ISD 1.3159 - - 20% 5,000 -

Leander ISD 1.4548 - - 0% - -

Marble Falls ISD 1.2900 - 3,000 0% - -

Manor ISD 1.5150 15,000 25,000 0% - -

Pflugerville ISD 1.4600 - 9,100 0% - -

Round Rock ISD 1.3800 3,000 - 0% - -

School Distric Local Options Beyond State Mandated

13


15/19

Historic Exemption Per Jurisdictions14

HOMESTEAD PROPERTIES:

Land Structure

AISD*** 25%* 50%*

CITY OF AUSTIN 50%** 100%**

TRAVIS COUNTY 50% 100%

TCHD 50% 100%

ACC DIST*** 50% 100%

PFLUGERVILLE ISD 25% 25%

*Owner-occupied residences designated after December 31, 2005 are eligible for a property tax exemption by AISD equaling 50% of the value of the structure and 25% of the value ofthe land, with a maximum AISD exemption of the greater of $2,000 or 50% of the AISD tax levy. The maximum exemption instituted by the AISD does NOT affect the exemptionsoffered by Travis County, Travis County Healthcare District, and ACC District.

**Owner-occupied residences designated after December 1, 2004 and any grandfathered landmarks which change ownership after December 1, 2004 are eligible for a property taxexemption by the City of Austin equaling 100% of the value of the structure and 50% of the value of the land, with a maximum City exemption of the greater of $2,000 or 50% of theCity tax levy. The maximum exemption instituted by the City of Austin does NOT affect the exemptions offered by Travis County, Travis County Healthcare District, and ACC District.

*** ACC & AISD District has repealed the historic exemption for the 2010 tax year.

NON-HOMESTEAD PROPERTIES:

Land StructureAISD 13% 25%

CITY OF AUSTIN 25% 50%

TRAVIS COUNTY 25% 50%

TCHD 25% 50%

ACC DIST* 25% 50%

PFLUGERVILLE ISD 25% 25%

* ACC & AISD District has repealed the historic exemption for the 2010 tax year.

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16/19

Exemption Values: 2010 Certified Valuesa/o 09-30-10

15

Value

(Estimated) M&O

Revenue Loss

(Estimated) I&S

Revenue Loss Total Revenue Loss

2010 Assessed Value after Homestead Cap 70,547,728,684

Total Exemptions: 8,189,252,174 88,362,030.96 12,120,093.22 100,482,124.17

State Exemptions 7,384,707,041 79,680,988.97 10,929,366.42 90,610,355.39

Local Exemptions: 804,545,133 8,681,041.99 1,190,726.80 9,871,768.78

Disability 23,344,809 251,890.49 34,550.32 286,440.81

*Economic Development 949,551 10,245.66 1,405.34 11,650.99

Freeport 93,323 1,006.96 138.12 1,145.07

Historical 148,092,582 1,597,918.96 219,177.02 1,817,095.98

Over 65 560,607,787 6,048,958.02 829,699.52 6,878,657.55

Over 65 Spouse 43,759,489 472,164.89 64,764.04 536,928.93Pollution Control 27,697,592 298,857.02 40,992.44 339,849.45

M&O Net Taxable 62,358,476,510

I&S Net Taxable 62,359,426,061

*Econ devel applies only to M&O

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17/19

Historic Exemptions Findings

The rate of historic exemption for each taxpayer varies

depending on other exemption entitlements

Many of the bills for historic exemptions are calculated by hand

The District has modeled City language which doesnt necessarily

apply to AISDs calculations:

a maximum AISD exemption of the greater of $2,000 or

50% of the AISD tax levy

Average tax relief for residential is well over $3,200

The potential increase in recapture liability under SB1 severely

limits the ability for AISD to obtain relief in the M&O budget.

However, the District could retain full value for I&S

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18/19

Estimated Historic Properties Revenue17

Residential Commercial TOTAL

Estimated Exemption using

2011 Preliminary Values 97,798,652 67,089,848 164,888,500

M&O Revenue (1.079) 1,055,247 723,899 1,779,147

I&S Revenue (.1480) 144,742 99,293 244,035

TOTAL 1,199,989 823,192 2,023,182

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19/19

Options to Consider for Historic

Exemptions

Commercial

Reinstate Commercial/Non-Homestead unchanged

Residential

Institute cap on Residential similar to City

Range of $3,000 to $6,000

Greater affect on higher-valued properties

Proportional reduction Reduce component exemptions for land (25%) or

structure (50%) which is what has been done historically

Apply exemption to Total Assessed Value, i.e. recommendation from HistoricSociety of 70% of Assessed Value with cap

Combination

The administration will continue to work with the Travis Central Appraisal

District to refine options

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