Props A & B - F.A.Q
Proposition A - Attendance Credit Election
Proposition B - Voter-Approval Tax Rate Election
Elections cost money and voter education is resource intensive – takes time, money, and can distract from other pressing issues. The fiscally responsible solution is for everyone to advocate for Prop A, so we can be one-and-done with a For vote like 99.99% of other school districts who had a similar election. Only Houston ISD tried the state of Texas and quickly came to its senses the following May after seeing the consequences of a failed ACE election. Texas Education Agency (TEA) began identifying properties to be permanently detached within days of that failed election. With conditions being different, it is not clear that TEA will afford Leander ISD the luxury of waiting for the results of a second election before taking action.
The district will owe recapture when the state sends the exact bill in early 2023. Prop A is about HOW the district makes payment – whether to retain control over payments as they may fluctuate, or hand over control to the state to act according to statute. First, the state will decide what property in the district boundary to permanently detach. Leander ISD does not have anywhere close to the $16bn of non-residential property that TEA is required to permanently detach. Next, statute informs TEA to instead consolidate the district with another district, forming a new district that is not subject to recapture. This is considered the “nuclear option” and Leander ISD as we know it will cease to exist. None of the neighboring school districts or any district in Williamson and Travis counties qualify for consolidation. So, TEA will have to look beyond the metro area for consolidation. The only reasonable option is to vote For Prop A.
The district saved $19m due to unfilled positions last school year and over 600 teacher contracts were not signed before the board took a vote on salary raises. The district salary scale was not competitive with a 2% raise, so we risked continuing with a large number of unfilled positions and further hurting student learning. RRISD announced 5% teacher raises and has capacity to absorb some of our teachers. A 2% teacher raise would have been a dereliction of duty to our teachers who stayed and our students who had negative learning experiences. The writing was already on the wall. The very next day after the board voted for 5% raises, teachers overwhelmingly signed their contracts for this school year. The savings between a 2% and 5% raise is $7m (i.e., a deficit of $22m versus deficit of $29m). Either way large cuts will be required without a successful VATRE.
The Efficiency Audit that was required before calling for a VATRE revealed that Leander ISD is operating a lean Central Office and lean administrative team (i.e., Campus Principals and Assistant Principals) compared with peer districts and the state. With 3 Area Superintendents and 1 Chief of Schools supporting forty-six (46) schools, visit with them to understand their workload. NO, THE DISTRICT DOES NOT HAVE NINE (9) OR TEN (10) AREA SUPERINTENDENTS! These admin positions also have salary expectations that need to be competitive in the industry to hire and retain much needed school support. Even if all Central Office positions are cut, there will still be a need for a VATRE but then who will run payroll, IT, etc.? LISD also employs a higher percentage of teachers than peer districts and the state average – a reflection of the broad program options and reasonable class sizes which are conducive to student learning.
Recapture payment with an unsuccessful VATRE is estimated at $26m compared to $36m if VATRE is successful. Either way, the district is subject to recapture.
The state has a formula to determine how much property tax revenue a school district is entitled to keep. Think of property tax revenue as really belonging to the state and they allocate the district its share. The entitlement amount is largely based on student attendance with a few other factors added in. The basic allotment of $6,160 for 100% attendance by a student has been fixed since 2019, with no adjustments for cost of living or inflation. Any property tax revenues the district collects above this calculated amount must be returned to the state in the form of recapture payments. The more property taxes collected, the less the state funding received. Last year, the state contributed about 20% of Leander ISD maintenance & operations revenue to fund salaries and other daily costs. This year, that percentage is expected to drop to about 10% state contribution, shifting more of the burden to local taxpayers.
Your property taxes are not increasing by 35%. The mandatory ballot language for Prop B is misleading due to incomplete information. It does not mention A LOT of factors, including that the board reduced the I&S rate by 13.5cents (29%), the state has already reduced the M&O rate by almost 2cents, and the proposed increase in M&O rate subject to voter approval is 9cents. One bucket was reduced by the board, while the voters are being asked to increase the other bucket.
The ballot language only mentions the revenue change for the bucket proposed to increase. Check your property tax information at the truth-in-taxation site, https://texas.gov/propertytaxes. You’ll see how much you paid last year with a Leander ISD tax rate of 1.337% and the proposed tax bill if VATRE passes with a tax rate of 1.2746% – a decrease of 0.0624%. Many are finding the difference in the tax bill for homesteads to be similar to prior year tax changes – a little higher like up to 3% more or a little lower like about 1% less.
No. The state controls the minimum Maintenance & Operations rate, and the district is already at that minimum aka Maximum Compression Rate (MCR).
A portion of the property tax rate is allocated towards Interest & Sinking (I&S). This is the debt fund used to pay down bond debt. Around 2013, the school district had accumulated about $3.5bn in bond debt from construction of several new facilities and the use of Capital Appreciation Bonds (CABs). In less than 10 years, the district has paid off about $1bn of that debt and has also switched to Current Interest Bonds (CIBs). The district is on the right path with guidance from the bond financial management advisors.
The bond financial advisers and CFO provided models showing the ability of the district to continue to meet current debt obligations, accelerate payments where possible, and issue bond debt to build new schools, even if property values drop. The I&S rate has been fairly stable for several years, even as property values continued a steady rise. The debt fund has a healthy fund balance which is not necessarily available to be used based on the bond repayment schedule.
In 2021, Fitch upgraded the district bond rating to AA from the previous rating given 9 years earlier. This change was a reflection of the significant reduction in bond debt and move from CABs. S&P also gives LISD bonds the AA rating. The Financial Integrity Rating System of Texas (FIRST) rates LISD a B for the 2021-22 report which uses data from the 2020-21 school year. The district dipped from an A the previous year because one of the factors that was not considered in the earlier report was given a 10 rating but was given a 2 rating in the subsequent report. This was because student enrollment growth for the prior 5 years was above 7% but dipped below 7% for the 5 years that included the COVID year. Even though the ratio of assets to long-term liabilities improved between the reports, the decrease in enrollment changed the rating.
There are lots of volunteer opportunities in the district – it takes a community effort to be strong! Advocate to your state legislators this upcoming legislative session, beginning in January 2023, for increased state funding to school districts. The more the state takes on to fund public education, the lower our property taxes. Research and vote for candidates who support public education at ALL levels of government.