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2018 deficit means another lean year for Austin teachers making $50K


AISD’s fiscal forecast predicts higher insurance premiums and assume no raises for employees in 2018-19.

Homeowners in AISD are paying more in property taxes, but the district will keep less of that revenue.

AISD will pay $658 million to the state for its 2018-19 recapture payment to subsidize other school districts.

Elementary school teacher Caroline Sweet can feel the pinch.

Sweet, a 13-year teacher veteran with a master’s degree and bilingual certification who teaches fourth grade, has seen rising health insurance costs in the Austin district, and despite recent annual raises, earns $50,130, still $2,400 a year less than the average teacher in Texas.

After health insurance premium hikes, Sweet was paying nearly $600 a month for coverage for herself and her two children. This year, Sweet opted for a less expensive health insurance plan, but it’s unclear whether her son’s occupational therapy visits will be covered.

“We make large sacrifices to remain in public education,” said Sweet, whose family lives in the Del Valle district, the closest they could get to the city while still being able to afford the home they wanted. “That’s the place I’m in and will be in for a while. It’s my reality for the job I love. I don’t know if that’s going to be the case for other people.”

Things are likely to stay tight for Sweet and other Austin district employees, as administrators predict higher insurance premiums and slim raises, if any, for teachers and other employees in 2018-19. Austin teachers make $50,144 a year on average; the average for Texas teachers is $52,525. A 1 percent employee raise would cost the district an estimated $6.5 million.

Austin has long struggled to keep its wages for teachers competitive. The district’s fiscal forecast for next year, which lays out the projected revenues and expenses, shows greater portions of its property tax revenues must be sent to the state to fund school districts elsewhere in Texas that reap less in property tax revenue. The district is predicting a $30 million deficit.

The result: Austin homeowners are paying more in property taxes this year, but the local school district will actually keep less of that revenue, handing over $658 million to the state to subsidize other school districts.

READ: Average Austin property tax bill hits $7,600

“The shortfalls that we’re seeing are directly tied to the losses in our revenue,” said district CFO Nicole Conley Johnson. “The revenue is declining and our expenses are moderately growing and it’s creating a shortfall for the district.

“We’ve already taken actions on low hanging fruit,” Conley Johnson said. “And we have more controversial … balancing solutions that we’ll have to contend with.”

The declining enrollment in the 81,939-student district, which has dropped for the past five consecutive years, also is a hit on the budget. The district has lost about 4,200 students in the past five years. The cumulative effects of the enrollment losses are about $115 million, Conley Johnson said. In 2018-19, enrollment is expected to drop by an additional 1,400 students, its steepest decline yet.

While losing 4,200 students over five years, the district has only trimmed its teaching staff by 171 teachers, in part because the losses have been throughout various grades levels across the district. The district also has kept schools open that are below their enrollment capacity and continue to lose students.

The projected 2018-19 employee salaries and benefits, totaling $665.8 million, are 86 percent of the district’s operating budget, and nearly 47 percent of the overall budget. The expense is rivaled only by the hefty recapture payment, required by the state from property-wealthy districts like Austin, which will rise $123 million this year, and totals 46 percent of the overall budget.

Board President Kendall Pace said the district soon must make tough decisions to eliminate fixed costs, which could include shuttering small, underenrolled schools that are expensive to operate. Pace also supports alternative ways to grow enrollment, including launching in-district charter partnerships to keep families.

RELATED: AISD superintendent apologizes, rethinks school closure timelines

“‘We’re going to have to make those unpopular, hard decisions,” Pace said. “We have to take everything into consideration.”

While the district plans to increase its contribution to the employee health insurance plans by $2.5 million to offset a projected 10 to 12 percent cost increase, it will still cover only half of the cost increase, leaving employees to shoulder the rest.

For many of the classified employees – the bus drivers, custodians and food service workers, among others – an increase of “$50 could make or break a person being able to pay rent or buy groceries,” said Trasell Underwood, a vice president with labor group Education Austin. They often have other jobs, especially to carry them through the summer when they are not paid, she said.

“When you have a population of employees that still qualify for state help like food stamps and housing, it says a lot,” Underwood said. “Every amount counts. It’s crucial to them.”

An increase to insurance and no pay raise could mean a second job for 20-year district employee Lisa Pannell, an inventory technician in the district’s transportation department. For years, Pannell couldn’t afford to insure her children, who are now grown. Her property taxes on her Buda home have risen $200 a month.

“Raises are so important because the cost of living in Austin is crazy high. You have to move out of the city to afford to live,” Pannell said. “Now some of the outlying areas are getting as expensive as Austin. It’s starting to be a struggle for us. If we have to start paying more on our insurance or our house payment goes up, we’re going to have to tighten our budget and get another job.”

Administrators will present the school board with a preliminary budget, including any proposals for pay raises, in coming months.

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