Schools chief to push ‘golden penny’ tax
For most property owners, proposed tax swap would slightly decrease taxes.
Eanes school district Superintendent Tom Leonard has a lot of speaking engagements scheduled the next two months, and included in each one will be school finance 101.
He’ll be talking to potential voters about why the district is asking them to ratify new tax rates proposed by the board of trustees.
The Nov. 7 election is being triggered because the district is proposing to take advantage of a “golden penny” tax exchange. That would allow it to take 3.25 cents per hundred in valuation away from funds used to pay the debt, and increase the maintenance and operations budget by 2 cents per hundred to drop the overall tax rate.
For most property owners, this tax swap would slightly decrease taxes. The average district household, valued at $893,020, would save about $112 a year.
Eanes isn’t the only district doing this. The Lake Travis school district is also going to hold a tax swap election in November, and the Austin district considered it. Many Texas school districts have approved the action because “golden pennies” are not subject to recapture.
“The difference between Lake Travis and Eanes is that Lake Travis will keep their rate the same, but we’ll lower ours,” Leonard said. “The reason we can do this is because our assessed evaluation of property behind each student is much higher than theirs, and has been rising at a much higher rate, so we’re able to lower our bond rate and still pay-off interest ahead of time.”
If voters approve the “Penny Swap and Drop,” Eanes estimates it would retain an additional $3 million in local tax revenue to fund schools.
“We’re working on a three-and-ahalf minute infomercial to put on social media, and it will be ready in mid-September,” Leonard said.
Without the penny swap, Leonard said the district would be faced with “taking money out of the fund balance, or reducing expenditures,” but there is a minimum limit that must be maintained, so eventually, that would lead to cutting personnel and or freezing salaries.
In that scenario, Leonard said “there is a risk that quality personnel would leave. We’d also have to consider raising class sizes or eliminating programs.”
Former school board president Al Cowan said the Penny Swap and Drop proposal makes sense “if there is a clear policy on how the board will use the additional money. Will the money be used to reduce the annual operating deficit, or grow the Eanes bureaucracy? Unless EISD uses the proceeds of the Tax Ratification Election to change its financial strategy, the district will simply find itself in the same situation down the road.”
Cowan also wants Eanes to develop its annual operating budget “without dependence on EEF (Eanes Education Foundation) contributions,” and he doesn’t want to “see the bureaucracy grow or add unnecessary facilities.”
“We are spending conservatively,” Leonard said “It is not our intention to be frivolous with the money. If this measure passes, we are much more likely to have a balanced budget.”
Leonard also hopes to compensate teachers better so they don’t leave.
“Right now, if we do not give a percentage raise to our teachers this year, our first-year teachers will be in 12th place” among Central Texas schools for teacher salaries, Leonard said.