Lake Travis ISD officials received confirmation earlier this week that the Commissioner of Education has agreed to fund the 50% credit for the Optional Homestead Exemption (OHE) starting with the current school year, Superintendent of Schools Dr. Brad Lancaster announced.
"Last spring, I began presenting to each school faculty meeting, PTA/PTO groups, and numerous community groups a general picture about our financial future," Dr. Lancaster stated. "In addition, our Board of Trustees recently adopted a list of priorities for the 85th legislative session."
The financial issues facing the district and its priorities for the Legislature include:
- The Loss of Additional State Aid for Tax Reduction - ASATR ($6.4 million),
- Funding the 50% Credit for the Optional Homestead Exemption ($3.5 million),
- Updating the Cost of Education Index ($1.2 million), and
- Funding the Transportation Allotment for All School Districts ($950,000).
"Our argument has been that our recapture (Robin Hood) payment to the state is calculated on 100% of our local taxable values," Dr. Lancaster continued. "The problem is that we only collect 80% of our residential values due to the OHE—a significant tax savings or discount for our local taxpayers. For nearly 20 years, we have been making recapture payments on money the district does not collect."
For LTISD, the credit will equate to a $2.1 million benefit for 2016-2017. For next year, district officials estimate that amount to increase to $3.5 million.
"We are very grateful for this significant relief and recognition of a flaw in the school finance system," Dr. Lancaster added. "On the other hand, these funds will not be new or additional money for our district. Rather, the funds will reduce by half the expected loss of $6.4 million due to the scheduled elimination of ASATR. Regarding this ASATR cliff, there are currently six legislative bills that have been filed that call for this funding source to not be eliminated next fall as scheduled. We do not yet know about the viability of any of these bills, but we are working hard to make that a reality as well."
Johnny Hill, Lake Travis ISD Assistant Superintendent for Business and Financial Services/Chief Financial Officer, was interviewed on the subject by KUT/Austin NPR radio earlier this week. The complete story and audio clip embedded in that report are linked here.
"This is a significant and positive event for our district," Dr. Lancaster indicated. "I am grateful that our state leadership has agreed with our argument that we should not be required to make recapture payments on money that we do not collect. We are glad to provide the 20% discount to our local taxpayers and appreciate TEA’s decision to fund the credit associated with this discount."
Additional information regarding the district's 85th Legislative Priorities is available on the Lake Travis ISD website, linked here.