The Chief Financial Officer for the district Lance Terrell presented information on exactly what this means to voters. It was noted that it is in essence a tax swap of two cents.
What is a tax ratification election? Texas school boards are charged with adopting a budget and tax rate each year. The Maintenance and Operations tax rate is set at a $1.04 by the state legislature, in order for the district to increase that rate, even though it is just a swap of two cents from the I&S Rate, they must call the election and let voters decide.
It was noted that the state legislature has not increased funding and does not appear to be set to in the next session. Currently the district receives less funding per student than 10 years ago.
School District funding is made up of two main components including state aid, local property taxes for funding. A TRE election allows the district to receive more funds because the two cents moved from the I&S are worth more than normal two cents of funding, however, it does require voter approval. If approved the TRE election would generate an additional $550,000.
The district has reduced local operational costs over the past two years they have reduced staff by 40 positions district wide through attrition. They also cut non payroll/debt expense items and froze salaries for two years. The district has run out of options other than the TRE election. What will a two cent tax swap do for Levelland ISD, generate an additional $556,000.
How will this affect an average residence in Levelland ISD. Their is an increase in property values NOT a tax increase which will lead to a net $55.00 per year on an average size home.
The question was asked, since the state has a cap of $1.04 for Maintenance and Operations, in order to move the two cents from Interest and Sinking fund the district has to call the Tax Ratification Election.
It was noted that if approved the tax ratification election would move two cents to Maintenance and Operations from Interest and Sinking fund. The overall tax rate will not change. It was noted that the two cents moved to M&O actually generate more revenue than the first 97 cents of the tax rate and generate more than any over the $1.06. The two cents would create an additional $556,000 in revenue for the district. All other school districts in this area with the exception of Sundown and Lubbock Cooper have already passed a tax ratification election. It was pointed out that the Maintenance and Operations tax rate is set solely based on the Taxable Assessible Values which are set by the appraisal district not by the school board. If property values go down, tax rates have to go up and if the values go up, tax rates will go down. It was noted that the total tax rate in 2006-2007 was $1.60 and now it is $1.38. In 2018-2019 the average residence will see a $55 increase in taxes, and that is based totally on property values which the school board has NO control over.
The district plans to include a 2% pay increase for all staff if the TRE passes, they also plan to handle some deferred maintenance projects such as HVAC repairs along with school bus purchases, and a new activity bus to replace a 17 year old model that is having several mechanical. The district also has replaced 7 aging fleet vehicles. The district will be implementing an asset replacement schedule to replace school buses, activity buses and fleet vehicles as well as maintenance vehicles. They also plan to replace some aging playground equipment.
It was noted that if the TRE fails, in order to maintain a balanced budget some of these items will not be possible, the district also has to maintain their reserve funds.
Early voting is through August 10th at the Election Administration office at 911 Austin Street from 9 am to 5 pm. Election Day is August 14 from 7 am to 7 pm at Capitol Elementary and Levelland Intermediate School.
It is important to remember that regardless how this election turns out, when property values go down from the appraisal district then you must raise rates to meet the debt already in place. The only thing that would require the rate to go up is if property values across the district go down. It is noted that tax rates for debt are set totally based on values and no new debt can be taken on without voter approval.
Chief Financial Officer Lance Terrell said with the passing of the Tax Ratification Election, it will benefit the district for years to come.