New tax structure, new challenges

By Charles Hundley / Guest Columnist

The Abilene Independent School District is in excellent financial condition. According to the most recent Texas Research League analysis, per pupil expenditures are below statewide averages ($5,787 statewide, $5,343 in AISD).

The district's end-of-year fund balance Aug. 31 will be approximately $29 million, well above the state's recommended level.

However, statewide school funding formulas have changed as a result of the recent increases in homestead tax exemptions. As a result, this year's AISD budget will need to be based on new assumptions. New approaches will be required. Retrenchment in staff will become the name of the game in the coming three years.

Ten years ago, when this administration was hired, the school board's "marching orders" were to increase student achievement and to maintain the district's excellent financial health.

These things have occurred. Test scores are up. Dropouts are way down. More and more high school students are taking harder and harder courses such as advanced mathematics and foreign languages. African-American and Hispanic youngsters have made giant leaps forward in achievement, thereby narrowing the much publicized "gap."

The major expenditures to support these achievements by students and staff have been to provide adequate staff and to keep AISD employees abreast of the cost of living, thereby maintaining high morale.

Pupil-teacher ratios have been lowered significantly. Programs have been added - things like Artist in Residence, Reading Recovery, Alphabet Phonics, EXCEL, Summer Reading Academy, a state-mandated Alternative Education Program for discipline cases, full-day kindergarten, Young Audiences, parent coordinators and others.

During much of the past decade, AISD tax values have fallen. But as a result of the "Robin Hood" plan and the fact that AISD is "property poor," money from state sources increased dramatically and allowed the district to make many improvements.

Because AISD has received "Robin Hood" funds, our local school tax burden has been far less than it has been statewide. According to the Texas Research League, school taxes in AISD have risen an average 3.8 percent annually in the past 10 years. Throughout Texas, average school taxes have risen 8.5 percent annually. School taxes in AISD are 38 percent higher than in 1987. Statewide, they are 85 percent higher.

But now the worm has turned. Since 1994, the healthy economy in Abilene has increased property values, thereby lowering state funds for school operations. No more Robin Hood!

The amount of state money AISD receives is based on "tax effort." Higher local tax rates deliver more state money; lower rates bring less. For example, in 1997-98, if AISD sets its tax rate at $1.13, it will receive $56.6 million in state dollars. But if the "tax effort" is $1.25, the state money will be $60 million. That would be an extra $3.4 million that local taxpayers would not need to ante up.

Gov. George W. Bush, whom I respect and appreciate, has crisscrossed Texas stating that school districts will be reimbursed "dollar for dollar" for lost revenue from increased homestead exemptions.

This is true if - if - a district only gives mandatory state increases to teachers on the salary schedule and if - once again, if - the district pays state minimum salaries. For many years Abilene has paid well above state minimums in order to attract top-quality teachers. Only 73 percent of the total teaching staff is even on the salary schedule. The rest, some of our most effective and senior teachers, "topped off" the schedule years ago.

The "dollar for dollar" reimbursement rhetoric ignores troubling facts in Abilene and across Texas. What about teachers with lots of experience? What about bus drivers, custodians, cooks, warehouse people, nurses, secretaries and a host of other people who are vital to the success of any school? Under the governor's "full reimbursement" scenario, only 39 percent of the total AISD staff would realize even a cost-of-living increase, much less a raise. A handful of teachers would receive a raise of more than $2,500, but 1,778 employees would receive no salary increase whatsoever.

The administration has recommended to the school board that AISD teachers on the salary schedule receive a 4 percent raise for the coming year and that all other employees receive a 3 percent cost-of-living increase. (These percentages track closely with the 1996 increase in the consumer Price Index of 3.3 percent.)

Bottom line: AISD will receive $1.1 million as our "full reimbursement." But a fair and equitable salary package to keep all employees abreast of inflation will cost $3 million. And, even with those numbers, salary increases will retreat from the current local overages AISD teachers receive.

In spite of AISD's hefty fund balance, this will be a very tough budget cycle for the school board. By design, last year's budget eased down the fund balance from $31 million to $29 million. That may be done once again this year.

But this cannot be done in 1998 and thereafter. Temporary planned reductions in the fund balance, yes. But habitual deficit spending, absolutely not! The fund balance should never drop below $20 million.

In order to keep the district in excellent financial condition for the future, several tough actions will need to be taken by the administration before the 1998 budget cycle. The total AISD payroll needs to be reduced through attrition, retirement and resignations.

This would include positions in all categories from top administrators to coaches to support personnel. Currently 87 percent of the total budget is payroll. That percentage needs to be reduced to less than 85 percent.

Currently, pupil-teacher ratios are ideal. The coming reduction-in-force will raise these ratios, but not above manageable levels. Remember that enrollment is decreasing slightly in grades kindergarten to eight while increasing in the two high schools.

Soon after Labor Day, I will form a task force of AISD employees to begin an analysis of the long-range effects of the recent tax structure revisions on salaries in Abilene and statewide. It is vitally important that AISD people be keenly aware of the ramifications of changes here and across Texas.

Abilene supports public education. Citizens here demand good schools. And they are willing to pay for them. As a result of these high expectations and support, AISD has a long tradition of excellent public schools.

Hopefully in the coming five years, AISD will get better and better. But tough financial planning right now for the future is going to be critical.

The school board has a rough budget adoption at hand. But it may be a Sunday school picnic compared to the budget process in 1998. To prepare for next summer, the administration will need to use all means necessary to get ready for what's ahead.

Charles Hundley is superintendent of the Abilene Independent School District.