Tax Ratification Election 2014 (TRE)

By Menard, Lisa

January 15, 2015 - Thanks to the passage of the Danbury Tax Ratification Election, two new HVAC units were delivered and installed for Danbury Elementary School.

 

Out with the old......	Swapping them out..
In with the new.....	And we are done!

September 8, 2014 - Danbury ISD Voters approved a tax increase to allow Danbury ISD to generate approximately an additional $490,000 this year and every year afterwards. This $490,000 will allow Danbury ISD to maximize state funding, eliminate a deficit budget, address facility needs, enhance technology and necessary infrastructure, improve academic programs, and provide competitive salaries for staff.

 

District voters in favor of the increase totaled 128 while those who voted against the measure numbered 47.

 

Voter turnout totaled 7.49%, with 176 of the district’s 2,349 registered voters turning up at the polls. Of that 176 a total of 22 voted absentee and 93 voted early.

How will the proposed TRE affect the tax rate?

Voters will decide on a tax ratification of 13 cents for the maintenance and operations (M&O) portion of the tax rate, which funds salaries, utilities and day-to-day operations that directly support campuses. Danbury ISD will lower the interest and sinking rate (I&S) by 3 cents, resulting in a net tax increase of 10 cents. The total proposed tax rate would be $1.24.

How will the proposed TRE impact taxpayers financially?

The increase would be ten cents for every $100 dollars in property value. For a homeowner whose house is valued at $100,000 this equates to an additional $100 dollars per year (based on the net taxable value). That cost translates to $1.92 per week. With this proposed change, Danbury ISD would maintain the third lowest tax rate in Brazoria County. Homeowners age 65 and older who have filed for an over 65 tax freeze would not see a change in their school taxes.

 

How can Danbury ISD lower its debt service (I&S) tax rate while increasing the maintenance and operations (M&O) tax rate?

Danbury ISD's main reason for lowering the debt service tax rate by 3 cents is the desire to reduce the impact of the TRE on taxpayers. The 2014 obligation, if we do nothing, would require the same tax rate we have now instead of the 3-cent drop. Danbury ISD's plan is to fund the three-cent drop from the available fund balance.

What is the effect of Target Revenue on Danbury ISD?

You may be wondering why Danbury is struggling so much financially and needs to hold the tax rollback election in the first place. In 2006, a new school finance bill was passed and it froze school funding at 2006 levels with no inflation factor. The key problem with the new school finance system is that it did not equalize school funding for all schools. Each district was given a target revenue number that dictates about 96% of a district's funding. For Danbury, this number is $5,090; the area average is above this.  So how much difference does this number make?  

 

By calling a tax ratification election (TRE) for September 6, 2014, the Danbury ISD Board of Trustees is placing school funding in the hands of voters. The TRE will allow voters in Danbury ISD to adjust the tax rates that fund their schools. Following are a few Key Messages that were provided at the July 14, 2014, meeting of the Danbury ISD Board of Trustees.

• The current school finance system, created by the state legislature in 2006,  requires a school district to call a TRE if it ever needs more Maintenance and Operations (M&O) money than it received in the 2005-2006 school year.  In 2010-2011, the legislature made $5.5 billion in cuts to public education.
• Even with a partial restoration of school funding from SB1, the Danbury ISD is still $478,000 below the 2010-2011 funding level on a per student basis.
• As a result of the state’s equalized funding system, there are three ways to increase total formula funding per student: (1) Legislative action to increase funding (beyond the district’s control); (2) Increase in number of students (beyond the district’s control and comes with added expenses); and (3) Increase in the tax rate.
• In order to save money, the district has consolidated or eliminated 9 positions, postponed major maintenance and technology projects, reduced spending in all areas, and depended on grants to purchase needed school buses and HVAC systems.
• Voters will decide on a tax ratification of 13 cents for the maintenance and operation (M&O) portion of the tax rate, which funds salaries, utilities and day‐to‐day maintenance and operations that directly support campuses.
• Danbury ISD will temporarily lower the interest and sinking rate (I&S) by 3 cents, resulting in a net tax increase of 10 cents. The I&S pays back principal and interest for prior bonded debt.
• Currently, Danbury ISD has the lowest tax rate among Brazoria County school districts.
• If the TRE is approved, the net tax rate increase of 10 cents would mean a total rate of $1.24 for Danbury ISD, maintaining the third lowest tax rate of all Brazoria County school districts.
• This funding approach, rooted in the district’s commended reputation for fiscal responsibility, is a shift in budgeting strategy as Danbury ISD focuses on the current budget as well as long‐term sustainability.
• For taxpayers age 65 and older, the amount of school taxes paid on their homestead is frozen and will not increase as a result of the tax ratification.
• If the majority vote for the tax rate of $1.24, the district will have access to over $490,000 in additional funds this year and every year thereafter.
• If the majority vote against the tax rate of $1.24, the district will not have access to over $490,000 in additional funds this year and every year thereafter.
• Without a tax ratification election, Danbury ISD will face the likely reduction of more staff members—which will negatively impact educational opportunities for Danbury ISD students.
• Danbury ISD’s comparatively low tax rate now leads to funding disadvantages and previous budget reductions make additional cuts more impactful. These reductions would cause an increase in classroom sizes and decrease students’ educational choices.
• Businesses and families considering relocation look for a strong school system.  Good schools are a major indicator of the health of the community.