FACTS about the Tax Ratification Election or TRE Thank you for visiting our web page to find out the FACTS regarding the TRE that Yantis ISD is having. The following presentation is designed to inform our voters as to why Yantis ISD believes the TRE is necessary. There is some non-factual information out there and we want our voters to be INFORMED and ARMED with the facts when they go to the polls to vote.
Yantis ISD Understanding The Tax Ratification Election (TRE)
Surviving under the Current School Finance System The Texas Supreme Court has ruled on the lawsuit, and the Legislature will probably not act to change the current school finance system. The probability that we will receive significant additional revenues from the state has gone down. The only way to gain additional funds is through our tax rate
Yantis ISD s Plan to generate an additional $230,000 with a $0.0518 tax increase
Taxes still Frozen on Over 65 and Disabled Homesteads Tax bills on Over 65 or Disabled Homesteads will not go up. They will never go up unless improvements are made to the homestead.
M&O Taxes School district tax rates in Texas have two parts, a Maintenance and Operations tax rate (M&O), and an Interest & Sinking (I&S) tax rate. M&O taxes pay the operating expenses of the district, such as salaries, fuel, utilities, supplies, equipment, and contracted services, among others.
I&S Taxes Interest and Sinking Fund (I&S) taxes, or debt taxes pay principal and interest on voter-approved bond issues to construct or improve facilities
We get the benefit of a $0.13 tax increase with only a $0.0518 tax increase because of a penny swap
What is a Failsafe Tax Rate Penny Swap A Failsafe Tax Rate Penny Swap protects the ability to make the debt payment if voters do not approve the TRE We really shouldn t drop the debt rate $0.13 unless voters approve the extra money from the additional $0.13 M&O pennies. The failsafe strategy does exactly that.
TRE Ballot Language In the TRE, voters will vote for or against approving the ad valorem tax rate of $1.2482 per $100 valuation in the Yantis ISD for the current year, a rate that is $0.13 per $100 valuation higher than the rollback tax rate.
BUT, there is a legally binding contract already in place with the voters IF the voters approve the $1.2482 tax rate, the Board is legally bound to drop the I&S Tax Rate to ZERO and the M&O Tax Rate to $1.17. As mentioned in the previous slide, the $1.2482 is to PROTECT the current Tax Rate in case the TRE fails. IF the TRE passes, the overall Tax Rate will be $1.17.
Here is how a Tax Swap works Before Tax Swap After Tax Swap M&O I&S M&O I&S $1.04 $.0782 $1.04 + $.0782 $.00 Total = $1.1182 Total $1.1182 BUT the TRE is asking for about 5 cents more to make the total Tax Rate $1.17 ($1.1182 + $.0518 = $1.17)
Yantis ISD s Penny Swap Possibility Penny Swap w/o TRE w TRE Difference Tax Rate 2015-2016- 2016-2016- Scenarios 2016 2017 2017 2017 M&O Rate $1.0400 $1.0400 $1.1700 $0.1300 I&S Rate $0.0782 $0.0782 $0.0000 ($0.0782) Total Rate $1.1182 $1.1182 $1.1700 $0.0518 Additional M&O $ $0 $230,000 $230,000
Yantis ISD voters can maximize State Aid for our students The way Yantis ISD voters can maximize state M&O funding for our children by approving the rate of $1.17 total Tax Rate. Under current law, the M&O Tax Rate cannot be raised above $1.17.
The opportunity to generate additional funds occurs now. IF the TRE passes, Yantis ISD can generate an additional $230,000 in M&O funds this year by increasing the M&O rate to $1.17. Currently, Yantis ISD has an M&O rate that is $0.261 lower than its 2005 M&O rate of $1.431. IF the TRE passes, the overall Tax Rate will still be $.021 lower than it was in 2005.
An opportunity to reduce our Debt Rate(I&S) occurs now We still have to pay our debt and here is how we do that Current law allows school districts to use I&S and M&O funds balance to pay debt. We can reduce our debt rate by $0.0782 cents, from $0.0782 to $0.000, by using I&S fund balance for debt payments. State law only allows I&S money to be spent of debt from existing bonds.
Leaving Money on the Table If the Board did not adopt the $1.17, the voters would not have the opportunity to generate additional funding. The $230,000 is left on the table in Austin at a time that it is needed.
What can $230,000 additional dollars do for Yantis ISD? Maintain Student-Teacher Ratios Maintenance and Improvement of Facilities Try to provide competitive salary and benefits for all staff Reduce effect of lost revenue (ASATR, Funding from increased Homestead Exemption and last year of debt recapture)
Impact of Proposed Tax Rate 2015/16 2016/17 Proposed Rate Avg. Home $ 174,410 $ 177,346 Taxable $ 149,598 $ 151,782 Tax Rate $ 1.1182 $ 1.17 Tax $ 1,672.80 $ 1,775.85 Tax Increase $103.05 Per Year, $8.59 Per Month
My homestead is not the average so what is my tax increase? The average home taxable value equals $149,598 Increase of about $105 A home worth half of that would see an increase of about $53. A home worth double the average would see an increase of about $210.
Some history on previous HB 1 Rollback Elections In the 10 years of HB1, 576 TREs were called by school districts across the State. The voters in 437 of the elections approved the rate adopted by the board. The voters approved the tax rates in 76% of the elections.
Previous HB 1 TREs In the 10 years of HB1, 476 ISDs have called one or more TREs. The voters in 415 of the ISDs ultimately approved the rate adopted by the board. The voters approved the tax rates in 87% of the ISDs.
Two Possible Results of the TRE If the majority vote for the $1.2482, $1.17 will be the district s tax rate, because of previous contingent board action to reduce debt rate $0.0782 if voters approve the $1.2482. The district will have access to over $230,000 in additional funds this year and every year thereafter. If a majority vote against the tax rate of $1.2482 the tax rate will be $1.1182. The district will not have access to over $230,000 in additional funds this year and every year thereafter.
The results of approving the $1.2482 tax rate are: 1. A total tax rate of $1.17, because of previous board contingent action to reduce the debt rate by $0.0782 if voters approve the $1.2482. 2. Significant additional dollars (over $230,000) which will replace state funding cuts 3. The average residential homestead tax bill will increase $103.05 per year. 4. A $0.0518 increase in the tax rate that provides the benefit of a $0.13 increase because of the penny swap. 5. Students will benefit from the highest levels of funding ever provided by the state that guarantee Yantis students the same funding as students in Austin and Dallas.
Results of not approving the $1.2482 tax rate 1. The tax rate will remain at $1.1182, instead of the $1.17 if the $1.2482 had been approved 2. The district will not gain an additional $230,000 in state aid this year. 3. The average residential homestead tax bill not increase unless the average value increases. 4. Students will not benefit from the highest levels of funding ever provided by the state that guarantee Yantis students the same funding as students in Austin and Dallas.
The Ethics Commission ISDs may not use employee time or ISD funds to encourage voters to ratify or not ratify the TRE tax rate. ISDs may provide factual, unbiased information to the public about the TRE and information related to the TRE. Employee time and district funds may be used by the ISD to provide factual information to the public about the TRE.
THANK YOU AGAIN. for visiting our web page and ARMING yourself with the facts. We hope this presentation has helped answer any of your questions and concerns. If you have more questions, please do not hesitate to contact the office at (903) 383-2463 and we will be happy to answer your questions. Dr. Running will meet with you or a group to answer questions in person or on the phone.