AUSTIN (KXAN) — The Eanes Independent School District is asking its residents to decide on whether or not to move pennies from one part of its tax rate to another. District officials say the change would allow Eanes ISD to keep more tax revenue.
According to officials, swapping the pot of funds could prevent $3.3M in locally controlled revenue from being recaptured by the state every year.
“What this allows for us to do is hire staff, maintain reasonable class sizes, compensate staff,” said Eanes Superintendent Dr. Tom Leonard. “This is good for a district like ours. We are not raising the tax rate, and that is where the swap comes in.”
Eanes ISD’S tax rate has two parts that apply to the assessed valuation of homes and businesses. Maintenance and operations or M&O which is used for staffing and operating schools and programs. The current M&O rate is 99 cents per $100 of a homeowners assessed value.
The second rate, interest and sinking, or I&S rate is for constructing and equipping facilities, plus acquiring technology and new school buses. The current I&S rate is 14 cents per $100 of a property’s assessed value.
Combine the two tax rates and you get $1.13 per $100 of assessed value for residential and commercial properties.
“Eanes ISD had not built a new school in a long time. We do some improvements to HVAC and technology in our facilities, but we do not need as many pennies on the interest and sinking side anymore,” said Leonard.
As of 2019, Texas now allows school districts to keep up eight pennies of the M&O tax out of the ‘recapture’ which goes to other property-poor districts. The state calls those golden pennies. The revenue from golden pennies isn’t recaptured by the state. Eanes ISD already has six of those so-called ‘golden pennies’ and this swap would add two more if voters approve.
“I can state categorically, whether this passes or not, the rate will be the same,” said Leonard. “I also can state categorically that there will be more money in the classrooms if voters say yes to the Eanes ISD version of the proposition.”
Under the school’s finance system, the Eanes ISD tax rate will be compressed from $1.13 to $1.1164. District officials say a tax payer won’t see an increase in their compressed tax rate.
“About 66% of the tax payers local dollars leave our district every year,” said Leonard. “They write the check to Eanes ISD, and then I write a check immediately for about $100M to the state of Texas,” said Leonard.