During its regular meeting August 15, the Lake Travis school board adopted a total tax rate of $1.4275 per $100 of assessed property valuation to fund the district’s 2017-2018 budget, triggering an election to be held November 7.
The tax rate is comprised of two funds, Maintenance and Operations (M&O) and Interest and Sinking (I&S). For 2016-2017, the district’s M&O tax rate was $1.04 and its I&S tax rate was 0.3675, resulting in a total tax rate of $1.4075. State law dictates that a school district must hold a Tax Ratification Election—or TRE—when asking voters to consider raising the tax rate. However, Lake Travis ISD will ask voters to consider increasing the M&O tax rate while simultaneously decreasing the I&S tax rate by the same amount.
“This particular election is also referred to as a ‘Penny Exchange,’” said Johnny Hill, Lake Travis ISD Assistant Superintendent for Business, Financial and Auxiliary Services. “Through a voter-approved TRE or penny exchange, we can move two pennies to the M&O tax rate by taking those same two pennies from the I&S tax rate, netting a total tax rate of $1.4075. Although the total tax rate assessed to local homeowners would not increase as a result of the penny exchange, Lake Travis ISD could see an additional $2.1 million annually in state aid. Additionally, these funds are not subject to recapture."
According to Mr. Hill, should voters reject the proposal, the M&O tax rate would 'roll back' to the previous rate of $1.04.
"Our total tax rate would remain the same as it has for the past six years at $1.4075, whether or not voters approve the election," added Mr. Hill. "Either way, the result of this penny exchange election will have no impact on our tax rate in comparison to our 2016 total tax rate.”
In June, trustees approved an order calling a $253 million bond election also to be decided by district voters on November 7. The major components of the bond program include Middle School #3; Elementary School #7; upgrades, renovations, and repairs to existing facilities; school buses, including installation of seat belts; technology; and land for future facilities and utilities.
“Although our local school district tax rate will not change as a result of these two elections, an increase in property value will inevitably result in an increase in a homeowner’s tax bill, regardless of a flat tax rate,” said Dr. Brad Lancaster, Lake Travis ISD Superintendent of Schools. “The good news for our local taxpayers is that we can present the bond election and TRE without increasing the tax rate. That is a rare occurrence in school elections and a highly-significant position for our taxpayers.”
Early voting begins October 23.