By combining a “penny exchange” with a “drop” in the district’s interest and sinking tax rate, Leonard said the board would give the community the chance to lower the overall tax rate for residents while saving $3 million this year that would otherwise be subject to the state recapture system.
If approved by the board, a “penny exchange” would increase the district’s maintenance and operating tax rate by two “unrecaptureable” cents, from $1.04 to $1.06 per $100 valuation, he said. This would trigger a tax ratification election for Nov. 7, where voters would have to approve the change.
At the same time, the district’s I&S rate would be lowered by 3.25 cents, from $0.1725 to $0.14 per $100 valuation, decreasing the overall tax rate by 1.25 cents, Leonard said.
“If residents vote yes [during the tax ratification election], their tax rate will be $1.20 [per $100 valuation],” he said. “If they vote no, the rate will be $1.2125 [per $100 valuation].”
Leonard said the tax decrease is possible because the continued rise in assessed property values of across the district allowed the district to pay off bond debt more quickly than anticipated, saving tax payers money on interest.
“We are at the point now that we can actually drop the I&S rate and still make all of our obligations,” he said. “A lot of districts in the state cannot do this because their assessed valuation is not as significant as ours and their school boards have not been as aggressive in paying off debt.”
Leonard said the $3 million in savings by the district would help attract and retain high-quality teachers, better maintain reasonable class sizes and continue supporting district programs.
“The objective is very simple,” he said. “Our community, our parents and our kids really have high expectations for Eanes ISD. They expect us to offer great programs, and we can’t offer great programs without great teachers. But even for without kids in the district, we are helping them in terms of our fiscal responsibility because we are lowering their tax rate.”