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AISD seeks tax hike to fund teacher raises

Thursday, October 23, 2008 by Kimberly Reeves

The Austin Independent School District will go to the voters on Election Day for a tax ratification election that would tack an extra 3.9 cents to the current rollback tax rate, bringing Austin’s tax rate to $1.20 per hundred-dollar valuation.


Front and center in supporting the tax rate hike is the Greater Austin Chamber of Commerce, along with the American-Statesman and the Austin Chronicle. No organized group has indicated opposition to AISD Proposition 1.


Probably the lowest profile item on the ballot, if approved the item would tack on an additional $91 in taxes to the yearly bill for an average home, currently pegged at $233,324. A website for the proposition,, went live recently. Yard signs went out this week, and 30-second radio ads began Wednesday.


The tax increase applies to the maintenance and operations portion of Austin ISD’s budget. So the tax rate on the M&O side goes up from $1.04 to $1.08. That funds an additional $17.7 million, according to the district, which is enough to fund a 3 percent raise for the school district’s teachers.


That raise will put Austin’s first-year teachers within $200 of the starting salary of Leander and Round Rock teachers. That is not as much as the 10 percent that Education Austin wanted, so while the Austin teachers’ union has endorsed Proposition 1, it is not campaigning very actively in favor of it. Instead, it has been the chamber, along with teacher groups ATPE and TCTA, that has been actively funding and pursuing the campaign with voters in the Austin school district.


“When people ask me why they should vote in favor of this, I tell them the benefit is that teachers get a pay raise,” said chamber vice president Drew Scheberle. “You can’t make an ongoing expenditure like a teacher pay raise contingent on one-time funding that might come out of the district’s fund balance. You have to incorporate an expenditure like this into the budget as an ongoing expense.”


The chamber did not walk away from negotiations without some concessions. The Austin Independent School District agreed to ramp up a pre-algebra academy and focus more resources on English language learners and college readiness. The AISD board, which is currently searching for the district’s next superintendent, also agreed to review and re-prioritize spending for Fiscal Year 2010.


These rollback elections were a provision of the Legislature’s recent property tax cut and were intended to put a cap on just how much taxes could increase after lawmakers pumped in a $14.5 billion tax cut. No lawmaker wanted to be in the position of paying for a massive tax cut – the biggest in the state’s history – and then seeing those savings whittled away by annual school tax increases.


The problem, unfortunately, is that lawmakers approved only a property tax cut. In fact, it was a property tax cut paid for by a new business tax and additional “rainy day” state revenues. The funding did not extend to new revenue for schools.


“In the speeches that I’ve done, people have asked why they are voting on it, and I tell them this is a new phenomenon – a common phenomenon – that any new money you need for anything you need in education has to come from an election,” Scheberle said. “We could wait and hope that the Legislature will solve our problems, but we don’t feel like that’s a good policy.”


So in the current economic climate – higher transportation costs, greater utility costs and the need to give employees a raise – school districts have turned to what have been called “tax ratification elections.” According to the online, 109 school districts – about 10 percent of all school districts in the state – have gone to the voters to ask for a tax rate above the school district’s effective tax rate.


School finance consultant Lynn Moak said most school districts have sought the full 13 cents allowed under law in their tax ratification elections. Austin, on the other hand, has taken a more modest course on its increase, one that reflects more the intent that lawmakers had—that school districts go out for funding, as needed.


“The Austin school district is in a strong position financially,” Moak said. “They have, however, a number of priorities in the upcoming budget, and the school finance system really provided them with very little additional money.”


So it can be expected that if the school finance waters don’t change – and it seems less likely in the current economic climate – that Austin will come back to the voters three more times, at 4 cents apiece, to request tax rate approvals.


Among the recent round of tax ratification elections, most school districts have sought the maximum additional tax possible under law, typically 13 cents. So far, the general trend has been that rural and suburban school districts have fared better than urban school districts. A failure on this tax ratification election, however, is not the message the chamber wants to send to a potential superintendent candidate.


In the world of school finance, school districts are considered either property wealthy or property poor, depending on property wealth per student. Austin is the first property-wealthy school district to take a ratification election to the voters. The reason most property-wealthy school districts have not pursued such elections is that a portion of property taxes in a property-wealthy school district must be returned to the state so that school funding remains generally level across districts.


School districts have some incentive to add pennies to their tax rate. Most school districts in the state are rolled back to a tax rate of $1 per hundred-dollar valuation. To sweeten the pot, state lawmakers gave every district six “golden pennies” to access without a voter election, which were matched – ironically – to Austin’s property values, no matter how property poor the school district in question is.


For instance, Austin currently sits at $1.04. Two of the pennies Austin wants to add to its tax rate in this election are richer “golden pennies.” The remaining 2 cents are what are called “copper pennies,” which are matched at a lesser rate.


For more information on Proposition 1, go to .

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