Lake Travis school district tax rate election gives voters the option to keep dollars local
The Lake Travis school district is asking residents to vote on whether or not to keep more tax dollars local this November.
If passed, Proposition A, which the district is also calling the “voter-approved tax rate election.” would move two pennies from one part of the tax rate to the other to increase the amount of money that is not recaptured by the state as part of the school funding formula.
Election Day is Tuesday, Nov. 2. and early voting runs from Oct. 18 to Oct. 29 with open hours Monday through Saturday 7 a.m. to 7 p.m. and Sunday from noon to 6 p.m.
The two cents would be moved from the interest and sinking, or I&S tax rate, which pays for bonds, to the maintenance and operation, or M&O tax rate, which pays for operations. The M&O fund mainly pays for staff salaries and benefits, according to Assistant Superintendent for Business and Operations Pam Sanchez.
If the proposition is approved, the district's “golden pennies” — as the cents not subject to recapture are sometimes called — would increase from 6 cents to 8 cents. Because the pennies are being moved from one part of the tax rate to the other, the overall tax rate residents pay will not change regardless of the outcome of the election.
“The whole purpose of a voter approval tax rate election is to maximize the opportunities available in the current school funding formula to benefit our students and our staff at LTISD,” she said. “We can keep the local tax revenue earned on these two pennies within the district to be spent in our operations for our student programs instead of sending it back to the state.”
Sanchez said the move would go into effect for the current fiscal year and would keep an additional $3 million of residents' tax dollars in the district annually. Moving these two pennies from the debt services side of the budget will not impact the district’s ability to pay off existing debts or handle future bonds, she said.
The district’s ability to make two additional pennies in the tax rate not subject to recapture came from House Bill 3, the school finance bill from the 2019 legislative session. The last time the state funding formula allowed for additional “golden pennies” was in 2017, when voters approved the district’s ability to increase the number of cents not subject to recapture from four to six.
The Lake Travis school district is property wealthy, which means it sends a significant amount of money back to the state in recapture each year, Sanchez said. For this fiscal year, the operations tax fund is expected to collect $131.1 million without the addition of more golden pennies, and about $41.8 million is expected to go back to the state. The amount the state recaptures does not change if the proposition passes, but the total operations fund revenue would increase to $134.1 million.
Sanchez said district employees cannot advocate for people to vote one way or the other, but can take steps to inform voters about the details of the proposition. One thing that she wants to make sure people understand is that this is not a tax increase. While the item will be listed on the ballot as a 2.3% increase in the M&O tax rate, the corresponding decrease in the I&S tax rate will keep voter’s tax bills the same.
“This is strictly just moving two cents from one right to the other, and it will not impact our overall tax rate,” she said. “This will allow more money to stay locally within our school district to be used on our students and our staff and our programs.”