As voters weigh higher tax rate for Austin public schools, group of former trustees raises concerns

Voters are deciding whether to approve a tax rate increase that would generate new revenue for Central Texas’ largest public school district as it grapples with a $119 million budget deficit. Austin Independent School District officials have said that shortfall is largely due to the fact that state funding for public schools is not keeping up with inflation. Proposition A could help fill some of that funding gap.

If voters approve Prop A during the Nov. 5 election, it would increase the tax rate by 9.1 cents per $100 of a property’s taxable value. That means someone who owns a home valued at $553,493, the average value in the area, would see their school taxes increase by about $412 per year.

Austin ISD estimates this increase will generate $171 million in funding. The district would keep $41 million of that to spend on giving the vast majority of staff members a raise, reducing its deficit and covering the cost of more instructional coaches as well as special education and mental health resources.

But what would happen to the other $130 million? Well, that funding would head to the state as part of a system, known as recapture or Robin Hood, which redistributes money from districts with high home values to ones with lower property values.

A district is subject to recapture if it collects more money in local property taxes than state school funding formulas say it needs to operate.

While Prop A supporters say Austin ISD is in dire need of new revenue to retain teachers and maintain services, the fact that 76 percent of the revenue raised through the proposed tax rate increase would go to the state has led even some public school supporters to speak out against it.

Former AISD trustees criticize Prop A

Cheryl Bradley is one of 10 former school board members who signed onto a letter last week opposing Prop A. Bradley represented District 1 in East Austin from 2002 to 2015. She said she wasn’t surprised the Austin ISD school board called a tax rate election because other districts in Texas are doing the same.

In Central Texas, alone, Manor ISD, San Marcos CISD, Liberty Hill ISD and Marble Falls ISD, all have tax rate elections on the ballot.

What did surprise Bradley about the Austin ISD tax rate election, though, was the breakdown of the money the district is projected to keep and the amount that would go to the state.

“It would be different if it was reversed – if we were keeping the three-fourths and the other fourth was going to the state but it’s not. The state is getting the majority of the money,” she said. “That makes no sense.”

Bradley is also concerned that even if the school district had more money it might not improve academic outcomes for all students.

In addition to the letter she sent with other Austin ISD trustees, she sent her own questioning why District 1 constituents, who she used to represent, should support the tax rate increase. She wrote that neighborhood schools in East Austin should be a “beacon of discovery and hope” but instead they are one of “disappointment.”

She added Austin ISD is failing to serve African American students, who account for about 6 percent of the district’s student population. Bradley pointed to data which shows many African American students are lagging behind their peers when it comes to math and reading proficiency.

“If I don’t see the academics of the Austin Independent School District getting better for every child, not just some, but for every child in every (school board) district, why should we put more money into a failing situation?” she asked.

Bradley also said she thinks the district should have tried to make more budget cuts before asking voters to raise the tax rate.

“If you haven’t looked at every line item and you haven’t looked at every place you can possibly cut, then I think you’re asking a lot of the citizens of Austin,” she said.

Austin ISD cut about $30 million from its current budget, primarily at its central administrative office. The district is also reviewing department budgets and identifying ways to reduce spending by another $90 million over the next three years.

Austin ISD Superintendent Matias Segura told reporters Tuesday that the district’s budget woes are so severe they can’t be resolved by reducing spending alone.

“There isn’t a way to cut your way out of the deficit. We have to rethink how we work,” he said.

He said school districts need more money from the state, but he does not want Austin ISD to count on the Texas Legislature to take that step.

“There is a real chance the state may do nothing,” he said. “So, I have to prepare for that.”

Current trustee wants voters to wrestle with what’s at stake

When Austin ISD trustees voted in August to call the tax rate election, AISD Board Vice President Kevin Foster was the lone trustee to vote against it. He raised concerns about the percentage of revenue subject to recapture.

“(The) Austin community deeply values education and is generally willing to support bonds, support tax rate increases, etc. to support education,” he said. “At the same time, we are in an affordability crisis and we are not really in alignment with the priorities of the state.”

Foster said he also understands Bradley’s concerns about academic outcomes, but said if improving them is the goal, fewer resources will only hurt students.

“It’s a terrible Catch-22 because you’re asking folks to be supportive of something getting better by allowing them to have resources, but they’re saying ‘Well, you’re not doing a good job yet anyway,’” he said. “So, I’m sympathetic to the perspective and when I look down the road we need more resources, not less, to even be viable.”

Foster wants voters to get a better understanding of how Austin ISD ended up in this financial situation, despite receiving the highest ratings for fiscal management. That includes an A rating for financial integrity from the Texas Education Agency, the state agency that oversees public schools.

“A voter really should know, here’s the situation the state has put the district in,” he said.

In his capacity as a UT Austin professor, Foster published a policy brief this week in which he broke down the state’s school finance system. Foster pointed to recent research that found 73 percent of Texas school districts are underfunded.

“At its core, the Voter Approval Tax Rate Election (VATRE) is more than just a local ballot measure. It is a reflection of the ongoing challenges in Texas’ school finance system and the difficult choices facing school districts across the state,” he wrote.

Foster said ultimately it’s up to voters to decide how they feel about Austin ISD keeping $41 million and sending $130 million to the state.

“I want voters to wrestle with that so that I can know as a trustee, that I am representing Austin and Austin’s values,” he said.

After publication, Foster told KUT News that he has considered the options and that he plans to vote in favor of Prop A.

All that glitters is not gold

Chandra Villanueva said more and more school districts are asking voters to approve higher tax rates because the state Legislature is underfunding public schools. Villanueva is the director of policy and advocacy at Every Texan, a left-leaning think tank based in Austin.

“I think the tax election in Austin ISD is just a really great example of what school districts have to do when the state is not actually funding them at realistic levels,” she said.

There is a limit, though, on how much districts can raise their tax rates. Districts can increase their tax rates 17 cents beyond what the state says it should be. Eight of those cents are what are known as “golden pennies” and nine are “copper pennies”. Unlike golden pennies, copper pennies are subject to recapture, meaning some of the money could go to the state.

The revenue from the Austin ISD tax rate election is subject to recapture because the proposed increase is composed of the district’s nine copper pennies. It’s already used up almost all of its golden pennies.

“What Austin is doing is they’re maxing out those copper pennies,” Villanueva said. “They have a little fraction of a golden penny left.”

Villanueva reiterated Austin ISD is not alone in asking voters to approve higher tax rates.

“And if a recapture district is struggling, that means that every district in the state is struggling,” she said. “So if Austin can’t make it, nobody can make it under this current system.”

Early voting is underway and lasts through Nov. 1. Election Day is Nov. 5.

This story was produced as part of the Austin Monitor’s reporting partnership with KUT.

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