AISD May Dip Into Spare Cash for Raises, Programs
The Austin school board may consider raises for teachers and other new programs next school year. They’ll hear about a plan to pay for it by spending money from the district’s fund balance at a board meeting tonight.
Here’s what the fund balance is and how it can affect what you pay in property taxes:
School districts have to keep a certain amount of money in the bank just in case something goes wrong. Sometimes the Texas Education Agency doesn’t pay them on time, for example.
State law requires districts keep enough cash on hand to cover one month’s operating expenses. But Paul Whitton with the Texas Association of School Administrators says most districts have more than that.
“That is debated up and up again,” Whitton said. “I’ve heard three months to as much as six months. Many districts try to keep two to three months or a little bit more. I don’t think there is a set rule that you could really go to.”
But there are set consequences if a fund balance drops too low.
Bond rating agencies start to get nervous. When they downgrade a district’s bond rating, interest rates go up. And guess who pays that extra interest? That’s right, you, the property-owning resident.
If Austin ISD spends $32 million from its fund balance, as staff are proposing, it would bring the cash supply to just above two months’ worth of operating expenses.
Nicole Conley-Abram, the district’s chief financial officer, says it shouldn’t be a problem.
“I have fairly good confidence that it won’t affect our bond rating,” Conley-Abram said. “As long as it’s one time and we have a multi-year financial plan to remedy that in the out years.” Which AISD does.
But the school district will have to hold an election to increase tax rates if it wants to keep a 3 percent pay raise for staff after next year. That election could happen as soon as November.