Tax Ratification Election 2014 (TRE)
By Menard, Lisa
|Out with the old......||Swapping them out..|
In with the new.....
|And we are done!|
On September 6, 2014, Danbury ISD will hold a Tax Ratification Election (TRE) that allows the voters to adjust the tax rates that fund their schools. The proposed increase will raise the current maintenance and operations (M&O) tax rate -- which funds salaries, utilities, and day-to-day operations that directly support campuses -- by 13 cents. This amount will be offset by a decrease in the debt service tax rate of 3 cents, for a net tax rate increase of 10 cents. With this election, Danbury ISD is requesting a clear message from the school community reflecting its desire and expectations for educational programs and experiences for students.
Election Day Early Voting
Saturday, September 6, 2014 Weekdays, August 20th - September 2nd (Sept 1st - Holiday)
7:00 AM—7:00 PM August 21st and September 2nd 7:00 AM-7:00 PM
Danbury Community Center Danbury ISD Administration Building
What is a tax ratification election (TRE)?
Texas state law requires school districts to calculate a rollback rate for property tax purposes. A rollback rate consists of two parts -- the highest allowable M&O (maintenance and operating) tax rate plus the actual debt service rate. Danbury ISD's highest allowable M&O rate (without the election) is $1.04. Adoption of an M&O rate higher than $1.04 requires an automatic rollback election (TRE) to ratify the adopted rate. The adopted rate will either be ratified through the TRE or "rolled back" to the rollback rate.
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 expense) or (3) an increase in the tax rate.
Why is Danbury ISD holding a TRE?
In 2011, the Texas legislature reduced funding for Danbury ISD by $583,100 over a two-year period. In 2013, the legislature provided partial relief, returning some but not all of Danbury's funding. This reduction was a financial setback which placed the district below the 2007 level of funding. Danbury ISD has continued to cut personnel and classroom and supply budgets. The District had adopted deficit budgets for the last three fiscal years. All major repairs, including roofs, depend on money available in Fund Balance. Click here to view 2012-13 budget information.
Recently, Danbury ISD trustees agreed upon a solution -- let the taxpayers decide. In the upcoming September election, Danbury ISD will be voting on a tax ratification. The TRE will allow voters of Danbury ISD to adjust the tax rates that fund their schools. Danbury ISD will use these funds to sustain enriched educational offerings while maintaining its track record for fiscal responsibility.
- Over the past 10 years, the state legislature has cut public education by 25% while increasing graduation requirements and accountability standards.
- To save money, the district has:
- Consolidated or eliminated 9 positions
- Postponed major maintenance and technology projects
- Postponed purchasing an additional bus
- Reduced spending in all areas
- Relied on grant funding to replace buses and HVAC systems
- District expenses have gone up while revenue has stayed the same. Further budget reductions will negatively impact educational opportunities for Danbury ISD students.
- The proposed tax rate will raise approximately $490,000 next year and every year afterwards.
- For every $100 Danbury ISD generates from the TRE, the state will return an additional $68 of your state tax dollars back to Danbury ISD.
- Tax bills on Over-65 or Disabled homesteads are frozen and will not go up. They will never go up unless the homeowner makes significant improvements to the home.
- Danbury ISD cannot raise the maintenance and operations (M&O) portion of the tax rate above $1.17 without a change in state law.
- The Danbury ISD tax rate is currently the lowest school tax rate in Brazoria County.
- If the TRE passes, Danbury ISD will maintain the third lowest tax rate among schools in Brazoria County.
What will the TRE do for Danbury ISD?
- Maximize state funding
- For every $100 Danbury ISD generates from the TRE, the state will return an additional $68 of your state tax dollars back to Danbury ISD
- Eliminate deficit budget
- Address facility needs (see examples below)
- Renovation of elementary school restroom facilities
- Replace aging HVAC systems
- Roof and structural repairs
- Build out the second floor of the middle school
- Enhance technology and necessary infrastructure (see examples below)
- Replace aging servers, routers, and switches
- Replace aging student and teacher computers
- Allow for purchase of additional instructional technology
- Improve academic programs
- Expand number and types of career and technical classes to meet House Bill 5 requirements
- Additional equipment and material to enhance instruction
- Provide competitive salaries for staff
- Add an additional bus for transportation services
- Grants have only allowed for replacement of an existing bus
- To balance the budget, the district had to stop budgeting for adding to the current fleet
Does the tax bill that I am receiving in mid-October have the approved tax rate already included?
Yes. If voters approve the TRE, this rate will be applied to the tax bill that you are receiving in mid-October. If voters do not approve the TRE, this rate will be applied to the tax bill that you are receiving in mid-October.
What happens if voters do not pass the TRE?
Since 2006, Danbury ISD has reduced staff by 9 positions. Without a tax ratification election, Danbury ISD will face the likely reduction of more staff members. These reductions would lead to an increase in classroom sizes and decrease students’ educational choices. The reductions would be in addition to the cuts that the district made following the 2011 state legislative session which affected Danbury ISD's 2011-12 budget. Click Here to view the 2011-12 Budget.
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?
|CDN||(March 6, 2012) District||2011-12 Adopted Tax Rate||2011-12 WADA||2011-12 Revenue at Compressed Tax Rate||2011-12 Target Revenue per WADA||Additional Revenue if Funded at Same Level|
|Using Equity Center's Data|
When is the tax ratification election? Where do I vote?
Election Day is Saturday, September 6, 2014, 7 am—7 pm, at Danbury Community Center, 6115 Fifth Street, Danbury, TX.
Early voting dates & times:
August 20, 2014 8am-5pm
August 21, 2014 7am-7pm
August 22, 2014 8am-7pm
August 25, 2014 8am-5pm
August 26, 2014 8am-5pm
August 27, 2014 8am-5pm
August 28, 2014 8am-5pm
August 29, 2014 8am-5pm
September 1, 2014 8am-5pm
September 2, 2014 7am-7pm
at Danbury ISD Administration Building, 5611 Panther Drive, Danbury, TX
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.
The sole purpose of this document is to provide voters with accurate, factual information regarding the proposal to assist voters in making an informed decision.