Tag Archives: Austin Independent School District

The Big AISD Question That Nobody Is Asking

By Bill Oakey – November 30, 2017

The question seemed so obvious that I never imagined it wouldn’t be asked. AISD just approved the sale of 8 district properties for a grand total of  $64.8 million. And they approved the purchase of a new site for their headquarters for $28.4 million. That leaves the school district with a cool $36.4 million in extra cash.

I read about this in several news articles, waiting anxiously for the answer to the obvious question. The one that for some odd reason was never asked…

What Are They Going to Do With All That Money??

Austin voters just passed a whopping $1.1 billion AISD bond proposition, by far the largest in history. The mailers in the bond campaign never mentioned the price tag. But they prominently featured a highly misleading statement – “AISD will not raise  the tax rate if the bonds are approved.”

Most citizens are painfully aware that the tax rate has to DECREASE each year to offset skyrocketing home appraisals. So, a carefully crafted promise not to raise the rate leaves plenty of wiggle room for higher taxes on everybody. This lack of disclosure must be a loophole in the 1987 Truth In Taxation law that I proposed and successfully got passed in the Texas Legislative.

I realize that my concerns beg the question of whether AISD needs more money to repair and replace dilapidated facilities. Of course they do. And the root of the problem is the Robin Hood funding formulas that force AISD to send more money back to the State than any other school district in Texas.

To me, that is all the more reason that AISD should handle their finances responsibly. Back in the 1980’s I humorously referred to their board as the Board of Mistrustees of the Austin Inefficient School District. Back then, they consistently had the highest per student costs in 8 out of 11 categories among the largest districts in the state.

While I was standing in line to vote in the recent billion dollar bond election, I heard a disturbing comment from an AISD employee. These were his exact words:

”You wouldn’t believe how much money the administrators spend traveling to all kinds of conferences! That would be enough money to give the teachers a pay raise.” That sounds like a great tip for one of the TV stations to use for an investigation. (Hi there, KXAN…). In any case, we certainly need some immediate disclosure on how the AISD board plans to use that nice chunk of change from the land sales. What is their process for determining such a thing? Here are a few suggestions:

1. Pass the savings on, directly to property taxpayers. (Not likely).

2. Evaluate options based on best practices used by other school districts across the country.

3. Research methods to refinance existing debt.

4. Increase reserves to raise their bond rating and earn the resulting benefits.

We might be able to assume that they are doing some of those things, or possibly something even better. But whatever they decide, they should let the taxpayers know about it as soon as possible…Oh gosh…My apologies for not mentioning the most likely option for AISD to consider. There must be a perfect conference in Brazil or on the French Riviera that would address all of these unanswered questions!

While composing this blog piece, I sat in the Magnolia Cafe on Lake Austin Blvd., surrounded by young AISD students enjoying a nice breakfast. Today is some kind of teacher training day. It was fun to observe the little poignant love scenes in some of the booths. It was like something straight out of “Grease,” “The Breakfast Club,” or “American Graffiti.” These kids will grow up in a very uncertain world. We should wish them all the best of good fortune and happiness.

Update – Response From Melissa Taboada, Austin American-Statesman

Melissa Taboada’s latest article about the land sales can be viewed here. She was kind enough to email me some additional details she has learned about this topic. But many questions still remain. She wrote:

Hi Bill,

The district needs to make the Southfield building compatible to its needs. At Monday night’s board meeting, the district outlined the new central office building could cost $37-$50 million with those changes. In the story, I mentioned that remaining funds from the CAC would go toward the new administration building. The bond projects also total $1.3 billion and to bring the cost down to the $1.1 billion, the district said it will use bond contingency funds, as well as $40 million in land sales.

Hope this information helps,

Melissa Taboada

My Analysis of These Additional Details

Melissa is well-versed on many details, having attended all of the AISD board meetings. However, let’s take a close look at these numbers…

$64.8 Million – Total land sales from 8 properties
$50.0 Million – $28.4 M purchase price + $21.6 M high estimate to refurbish Southfield Bldg.
$14.8 Million – Leftover money from land sales, using high-end building estimate

$64.8 Million – Total land sales from 8 properties
$37.0 Million – $28.4 M purchase price + $8.6 M low estimate to refurbish Southfield Bldg.
$27.8 Million – Leftover money from land sales, using low-end building estimate

These calculations tell us that after fully funding their new headquarters building, AISD will have somewhere between $14.8 and $27.8 million left over for other purposes. These amounts don’t fit very well with AISD’s plan to use bond contingency funds “plus $40 million in land sales” to reduce the cost of the bond projects from $1.3 billion down to the $1.1 billion that appeared on the election ballot. Unless I’m missing some more details, there appears to be a gap of missing money here…

$40 Million – Land sales funds needed to reduce bond projects from $1.3 billion to $1.1 billion
$14.8 Million to $27.8 Million – Land sales available after fully funding Southfield Building
$12.2 Million to $25.2 Million – Apparent funding gap

The gap doesn’t look too bad until you factor in the likelihood of cost overruns for refurbishing the Southfield Building to make it “compatible with AISD’s needs.” Cost overruns tend to spring up on just about everything these days. And the “needs” of AISD’s executives may not be quite the same thing as the taxpayers’ needs. Thanks to all of you readers for bravely wading through the weeds with me on this issue.

Update From Nicole Conley Johnson, AISD Chief Financial Officer

Nicole Conley Johnson

2017/11/30 at 9:21 pm

Good day Bill. I am Nicole Conley Johnson, the CFO of AISD. The subsequent analysis that you’ve done regarding the purchase and rehabilitation of the Southfield site is spot on. There is still a gap to get to the $40 million from land sales. It is anticipated that there could be more properties sold as the bond program is implemented. As it is implemented, several school site could become available for future sales. For example, Rosedale after its rebuilt on the Lucy Read site and/or the proposed school unifications.

Let’s Not Overlook the Elephant(s) In the Room!

Here are two final, very critical questions:

  1. How do the prices on each of the 8 properties that AISD plans to sell, and the purchase price of the Southfield Building compare to the appraised values on TCAD’s official tax rolls?
  2. What are the detailed specifications that AISD has laid out for the refurbishment of the Southfield Building? The cost estimates range from $8.6 million to $21.6 million. Let’s assume that AISD strives to use our tax money just as prudently as Austin families have been forced to do with their own budgets under today’s affordability constraints. Can we get a commitment from AISD’s top brass that they will stick as close as possible to the low-end estimate for their new digs?  And can we get a commitment that they will publish a press release beforehand, telling us exactly what we are getting for that amount of money? (This calls for one new song to be added to the music list below).

Musical Accompaniment for This Blog Piece:

  1. “Such An Easy Question” – Elvis Presley
  2. “96 Tears” – Question Mark and the Mysterians
  3. “Hey Schoolgirl” – Tom and Jerry (before they changed their name to Simon & Garfunkel)
  4. “To Sir With Love” – Lulu
  5. “Wonderful World” – Sam Cooke, or the cover version by Herman’s Hermits
  6. “Commitment” – Leann Rimes
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Revised Texas School Finance Reform Proposal

By Bill Oakey – July 13, 2016

For the past few months I have been working with AISD and other interested parties on a proposal to reform the Texas school finance system. The current “Robin Hood” system that recaptures funds from “property rich” school districts and distributes those funds to “property poor” school districts is badly flawed. The Texas Supreme Court acknowledged that fact, even while issuing its ruling that the controversial funding plan is legal under the Texas Constitution.

My original reform proposal served a valid purpose in starting a conversation with AISD  officials. I never expected to hit the ball out of the park on the firs try. But thanks to the gracious help, encouragement and input from Kendall Pace, President of the AISD Board of Trustees, I now have a revised proposal that is ready to present to the Texas Legislature.

Without some type of meaningful reform, the Austin Independent School District stands to lose hundreds of millions of dollars over the coming years. One estimate shows that AISD’s recapture payment to the State would skyrocket from $181 million to $445 million over a three-year period. Our community simply cannot sustain that level of accelerating financial loss. Austin pays more into the “Robin Hood” system than any other school district in the entire state.

Here Is the Revised Proposal

1. Keep the existing geographic boundaries for calculating the “property rich” and “property poor” school districts across the state.

2. One important fact should be fundamental to the reform discussion. The school districts classified as primarily “property rich” may have a large number of students living in poverty. The school districts classified as primarily “property poor” may have some number of students living above the poverty line.

3. The State could set up a clear and fair method for calculating an offset for the students within the “property rich” districts who qualify as living in poverty. This offset could be subtracted from the recapture amount that the school district sends back to the State.

4. The offset could be as simple as a fixed dollar amount per student classified as living in poverty.

5. If there are easily definable variables that should be applied to the per-student-in-poverty calculation, those could be factored into the funding formula.

6. Conversely, if there are students living above the poverty line in the school districts classified as primarily “property poor,” then another offset could be applied to equalize the funding formula for those districts.

The purpose of this proposal is to build more equity into the recapture and redistribution system. There is probably no method available that everyone would characterize as perfect. Historically, the Texas school finance system has been viewed by many as overly complicated. Battles have been fought on the floor of both houses in the Legislature and in the State court system for far too long. Others who understand school finance much better than I may find ways to improve my proposal, or perhaps consider another plan that works better. But here’s hoping that Austin students and teachers, as well as our local taxpayers will emerge from the upcoming Legislative session with a much better system than we have today.

Before I leave this reform discussion, let me put the issue into a human perspective that I hope everyone reading this will appreciate. I do not have any children in the Austin schools. But my sister and my nephew have both worked as teachers, and my uncle Joe Oakey was the Commissioner of Education for the State of Vermont. My heart and my spirits were uplifted on the evening of this past May 23rd. On that date, I went to the AISD board meeting to speak during Public Communications. This happened to be the occasion for a large number of students to receive their annual achievement awards. I have a permanent memory of the smiles from those students and the proud looks on their parents’ faces.

Before the meeting, we all stood and recited the Pledge of Allegiance to the flag. For a few brief moments, I remembered what it was like to be a kid in school once again. We should all keep in mind that school funding is not just about courts, judges, Legislators and piles of papers and statistics. None of us would have any of the skills and talents that we try to use today unless the people who came before us really cared about the value of a good education. Let’s all try to come together and make the same thing happen for future generations of children in Texas.

My First Grade Class Picture

My First Grade Class Picture

Presentation To AISD Board Of Trustees – School Finance Reform Proposal

By Bill Oakey – May 23, 2016

Attending an AISD board meeting was a fascinating experience, and one that I recommend everyone do at least once in their lifetime. During the 30 person public comment period, parents, teachers, school staff members and community activists of all stripes had their say. It was quite different from a City Council meeting or a Travis County Commissioners Court meeting. The center of attention, whether addressed directly or indirectly, was the school kids, the folks who will step into our shoes and who represent Austin’s future.

My topic of discussion was the school finance reform proposal that was introduced on this blog on May 14th:

Presentation to AISD Board Meeting, Public Comment Period – School Finance Reform Proposal

By Bill Oakey – May 23, 2016

Hello And Good Evening,

My name is Bill Oakey, and I am a retired accountant and blog writer for AustinAffordability.com. Since the Texas Supreme Court ruled the current school finance system Constitutional, I have drafted a school finance reform proposal. This proposal would subdivide the school districts across Texas into local school board voting districts, and use those smaller areas to calculate the “Robin Hood” recapture amounts. The intent is to reduce the unfair burden placed upon AISD, and allow more of our local tax dollars to stay here in Austin.

I would like to thank Board President, Kendall Pace, as well as Jacob Reach in Dr. Cruz’s office for offering to formally review my proposal. I hope it can serve as a discussion staring point that will lead to meaningful reform. Some folks have cautioned me that the Legislature will not reform the school funding formulas or increase education spending. But in its 2016 “Quality Counts” report, Education Week ranked Texas 43rd in the nation for student achievement, chance for success and school finance. (See the full Education Week “Quality Counts” report here).

We need to rally the support of City, County and AISD officials, along with leaders in the business community, to stand up for Austin Schools and make Legislative reform happen. Austin simply cannot sustain a Robin Hood increase from $181 million to $445 million over a three-year period. For some challengers, you could walk softly and carry a big memory stick full of data, as you march into battle. The numbers should speak for themselves.

It will be an uphill struggle. When Marty Robbins sang his inspiring song, “You Gave Me a Mountain,” in 1969, he wasn’t sure if he could climb that mountain. But here today, if everyone works together, I do believe there is hope. I believe in Austin, and I believe in Texas.

mountain

School Finance Reform Proposal

By Bill Oakey – May 14, 2016

The City of Austin and the Austin Independent School District (AISD) were both rocked to their foundations on Friday when the Texas Supreme Court handed down its decision on the State’s controversial Robin Hood school finance system. The Court ruled unanimously that the funding plan is constitutional under Texas law. That leaves Austin schools in a perilous financial dilemma. Under the Robin Hood formulas, Austin is forced to send more school property tax revenue back to the State than any other school district in Texas. For details on the devastating financial impact that the court decision will have on AISD, please see this excellent KXAN-TV News piece by reporters Kevin Kline, Calily Blen and Kylie McGivern.

As KXAN reported, the Texas Supreme Court did, however, stop short of endorsing the current school financing system. “Justice Eva Guzman delivered a concurring opinion stating the court calls for “transformational, top-to-bottom reforms” and that more work needs to be done regarding “economically disadvantaged students.” Following the announcement of the court’s decision, Austin State Representative, Celia Israel immediately declared that Governor Abbott should call a special session of the Legislature “so Texas can fully invest in its education system.” A special session is unlikely, however, since Governor Abbott issued a statement praising the Supreme Court ruling.

How Austin Schools Get the Royal Shaft

Former AISD school board president and Texas Senate candidate, Gina Hinojosa, labeled the court decision “a punch in the gut.” The numbers show that AISD taxpayers will soon be headed for a world of hurt in proportions that I can only describe as a nightmare scenario. Unless some adequate reforms are hammered out between now and January when the Legislature meets for the next regular session. Do not continue reading this blog post if you have any stomach issues or anxiety problems. AISD’s current funding requirement from local taxpayers to be sent back to the State under Robin Hood in 2015 was $181 million. Projections indicate that by 2018 that number would skyrocket to $445 million. Who amongst your neighbors and friends could sustain that kind of hit to their wallets in increased property taxes?

1938 "Adventures of Robin Hood" Movie Poster

1938 “Adventures of Robin Hood” Movie Poster

The City Has Proposed a Tax Swap With AISD

Some on the Austin City Council have proposed letting Austin taxpayers pay for certain social programs currently funded by AISD. But as I mentioned on this blog, such a plan would have serious unintended consequences. Seniors aged 65 and over have their school taxes frozen under Texas law. The City’s tax-swap proposal would need to include carefully prescribed adjustments in order to avoid penalizing seniors.

Here Is My School Finance Reform Proposal

Currently the State shifts funds from property-rich school districts to property-poor school districts, based upon the taxable value of each school district’s total property tax base. Because of Austin’s huge annual spikes in tax appraisals, we get the biggest share of Robin Hood payments required to be sent back to the State each year. My reform proposal calls for designating the “wealthy” and “poor” areas at the local school board voting district level, rather than ranking each whole school district against every other whole district.

Under this scenario, AISD’s seven geographic voting districts would be measured against all the other geographic school board voting districts across the state. You can see the boundaries of AISD’s voting districts here. Under my funding plan, the property values would be calculated for each of these seven districts. Using this method, only some of our geographic districts would be designated as “wealthy.” Orhers might fall somewhere in the middle, and some might be considered “poor.”

Approximately 60% of AISD students live in poverty and receive free or reduced price school lunches. Under my proposal, the Robin Hood funds would only be collected from the richest school board voting districts across the state. Then those funds would be redistributed  to the poorest of those school board voting districts. We all know that school funding formulas can be crazy and ridiculously complicated. So, I see my proposal as a discussion starting point. Let’s see if our local and State officials can work with it and other reform strategies to fund Texas schools in a much more equitable manner. Otherwise, the current system will send AISD taxpayers completely over the cliff that they already perched upon.

falling

Musical Accompaniment for This Blog Piece:

  1. “Wonderful World” – Sam Cooke, 1960
  2. “Swingin’ School” – Bobby Rydell, 1960
  3. “High School Confidential” – Jerry Lee Lewis, 1958
  4. “Little School Girl” – Fats Domino, 1954
  5. “Charlie Brown” – The Coasters, 1959
  6. “The Hookey Song” – Don Cornell & Teresa Brewer, 1952
  7. “Teacher’s Pet” – Doris Day, 1958
  8. “School Day (Ring! Ring! Goes The Bell)” – Chuck Berry, 1957
  9. “Hey, Schoolgirl” – Tom & Jerry, 1957 (early recording name for Simon & Garfunkel)
  10. “Waitin’ In School” – Ricky Nelson, 1957
  11. “Teen Angel” – Mark Dinning, 1959
  12. “High School USA” – Tommy Facenda, 1959 (national version; 28 regional versions released)
  13. “Let’s Go Steady for the Summer” – The Three G’s, 1960
  14. “Vacation” – Connie Francis, 1962
  15. “Roses Are Red (My Love)” – Bobby Vinton, 1962
  16. “Surfin’ USA” – The Beach Boys, 1963
  17. “The New Girl In School” – Jan & Dean, 1964 (flip side of “Dead Man’s Curve”)
  18. “Sealed With a Kiss” – Brian Hyland, 1962
  19. “Summertime, Summertine” – The Jamies, 1958 (became a hit again in 1962)
  20. “See You In September” – The Tempos, 1959
  21. “Kodachrome” – Paul Simon, 1973
  22. “To Sir With Love” – Lulu, 1967
  23. “Carrie Anne” – The Hollies, 1967
  24. “Me and Julio Down By the Schoolyard” – Paul Simon, 1972
  25. “Dance, Dance, Dance” – The Beach Boys, 1965
  26. “Summer Nights” – “Grease” Soundtrack, 1978
  27. “You’re The One That I Want” – “Grease” Soundtrack, 1978
  28. “The Janitor Knows” – Those Darn Accordions, 2007
  29. “Teach Me Tonight” – Jo Stafford, 1954
  30. “Moments To Remember” – The Four Lads, 1955