Austin ISD Chief Financial Officer Nicole Conley was invited to testify before the House Public Education Committee on July 24. Below is a transcript of her testimony.
Good afternoon, Chairman Huberty and members. My name is Nicole Conley Johnson and I am the Chief Financial Officer for the Austin Independent School District. I am testifying for House Bill 62.
Austin ISD is one of fourteen school districts that cover all of their employees under the Social Security retirement program. An additional 34 school districts cover all of their classified employees under the Social Security retirement program.
Austin ISD employees voted to be covered by the Social Security retirement program back in the 1950’s. As the payroll tax rate increased over the years, in the early 1980’s AISD took formal action to begin to withdraw, which required a two-year notice to the Social Security Administration. During the two-year notice period, Congress passed major reform legislation in 1983 that prohibited local governments participating in the Social Security retirement program from withdrawing from the system. Thus, despite the desires of our employees and the Board, we are required to remain in the Social Security program and absorb the 6.2% of payroll expenses and a matching 6.2% by the employee. This uncontrollable expense places our district and the other participating districts at a severe financial disadvantage.
We pay nearly $34 million in Social Security retirement payroll taxes - over $410 per student. Given our escalating recapture payment which will exceed $533 million next year, this uncontrollable expense makes AISD less competitive than our neighboring school districts in the teacher compensation arena. The reduction in a new teacher’s monthly take home pay is a negative factor that puts our urban district at a severe disadvantage in our efforts to recruit talented, young teachers to Austin ISD.
This bill will accomplish two very important legislative priorities. First, it will permit school districts that pay into social security to use these resources to increase teacher salaries, and it will decrease the runaway recapture payments that burden our district and local taxpayers who are shouldering more of the burden to fund public education.
Thank you for your consideration.