School district calls tax rate election

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Page 3 (Submitted presentation)

The Italy School Board of Trustees is asking voters in the district to vote on a $0.13 tax rate increase. This increase will add an additional $481,500 to the budget for the 2008/2009 school year and each year thereafter until the State Legislature changes current law. The board, however, cannot raise the tax rate without the approval of voters.

The election is set for Saturday, Oct. 11, 2008 at the Boze Chapel on Main Street. Polls will be open from 7 a.m. until 7 p.m.

The Texas Legislature, following a lawsuit from the West Orange-Cove II, is required to change the Texas School Finance System. The new requirement will reduce school district tax rates and allow districts to raise their tax rates to obtain additional funds to preserve their local “reasonable discretion.”

The acceptable solution allows school district tax rates to stay below the $1.50 cap and will allow districts to equalized funds so they could exercise their “reasonable discretion” to obtain enrichment funds.

Texas Gov. Rick Perry appointed a statewide committee to restructure taxes. A new business tax was established, the sales tax on used vehicles was strengthened and cigarette taxes were raised. This allowed the legislature the funds necessary to reduce school district property taxes and create an opportunity for school districts to obtain additional funds.

The local school district tax rate decreased from $1.50 in 2005 to $1.33 in 2006 and further down to $1 in 2007 and 2008, without a reduction in total revenue. It allowed districts to raise rates by up to $0.04 above the compressed rate, which allowed Italy ISD to go form $1 to $1.04 without a tax rate election (TRE). A maintenance and operation budget above $1.04 requires voter approval.

The rollback election asks voters to vote for or against approving the ad valorem tax rate of $1.241 per $100 valuation.

On the local level, the additional $481,000 will:

  • Help meet and exceed state and national standards for all students;
  • Provide competitive salaries to retain and attract highly qualified staff;
  • Keep up with inflation, especially in fuel, utilities and food costs (energy efficient lighting, energy efficient HVAC and roofing);
  • Improve safety, energy conservation and upgrade facilities on all campuses;
  • Enhance technology for student success in the global economy; and
  • Improve transportation needs.

Increased property values and tax collections do not give additional funding to school districts under House Bill 1 (HB1). Increased collections from the $1 compressed rate just reduce state aid, dollar for dollar. Italy ISD receives its revenue target — no more, no less. If local revenue increases, state aid decreases.

The way Italy ISD voters can maximize state funding for its children, according to information from the school district, is to approve the rate of $1.241 — $1.17 for maintenance and operation and $0.071 for interest and sinking. If approved by voters, the state will provide $274 for every $100 raised by Italy ISD.

The impact of the proposed tax rate would increase school taxes approximately $119.79 per year or $9.98 per month for a home valued at $88,507.

2007/2008 Tax Rate 2008/2009 Proposed Rate
Average Home $86,326 $88,507
Average Exempt - $15,000 - $15,000
Average Taxable $71,326 $73,507
Tax Rate x 1.111% x 1.241%
Tax $792.43 $912.22

The taxes will remain frozen and will not increase on the Over 65 and Disabled Homesteads unless significant improvements are made to the homestead.