Facing a budget deficit, Eanes ISD continues discussion on the significance of golden pennies

Eanes ISD Chief Financial Officer Chris Scott presents an overview to the board of trustees regarding the budget ramifications of House Bill 3. (Amy Rae Dadamo/Community Impact Newspaper)
Eanes ISD Chief Financial Officer Chris Scott presents an overview to the board of trustees regarding the budget ramifications of House Bill 3. (Amy Rae Dadamo/Community Impact Newspaper)

Eanes ISD Chief Financial Officer Chris Scott presents an overview to the board of trustees regarding the budget ramifications of House Bill 3. (Amy Rae Dadamo/Community Impact Newspaper)

House Bill 3, which passed in June, provided Eanes ISD with less financial assistance than neighboring school districts in Central Texas, and consequently, according to EISD, the district needs to evaluate current and future budget deficits.



EISD said the 2019-20 $2.3 million budget deficit was in part due to the 4.5% compensation increase allocated to all staff members June 19.



The possibility of adding to the district’s golden penny fund to make up for the lack of funds and immediate financial assistance from HB 3 was discussed during a Nov. 19 regular board meeting in a presentation by EISD Chief Financial Officer Chris Scott.



The addition of two golden pennies, bringing the district to the maximum amount of eight, could provide an additional $3.5 million to the general fund for the 2020-21 school year.



Golden pennies represent the funds that are not subject to the state’s recapture program, often referred to as “Robin Hood.” Affluent districts with a cost per student higher than $541,000 are required to make recapture payments based on the district’s taxable value, according to the Texas Education Agency. By holding onto its golden pennies, the district is able to increase its maintenance and operations tax rate without increasing the cost of its recapture payments.



In order to increase the number of its golden pennies, EISD will be required to hold a voter approval tax rate election, formally known as a tax ratification election. The district must also conduct an efficiency audit and share the results with the community 30 days prior to the election, which according to EISD is a new requirement.



Superintendent Tom Leonard emphasized even if the district does acquire two more golden pennies, residents are still likely to see a tax rate decrease in 2020-21 school year.



The district discussed various tax rate scenarios for the next five years as a result of the additional golden pennies. If EISD saw the addition of two golden pennies and no change in its debt services, the 2020-21 tax rate could be set at $1.11, assuming a 7.2% growth in assessed values. This would be a $0.07 decrease from 2019-20.



The deadline for the district to hire an audit firm is set for July 3, 2020, and the deadline for the district to call an election is Aug. 17, 2020.



No official board action was taken during the Nov. 19 meeting.

By Amy Rae Dadamo
Amy Rae Dadamo is the reporter for Lake Travis-Westlake, where her work focuses on city government and education. Originally from New Jersey, Amy Rae relocated to Austin after graduating from Ramapo College of New Jersey in May 2019.