Eanes ISD

Penny Swap & Drop (TRE)

Community Approves Penny Swap & Drop/TRE

Eanes ISD voters overwhelmingly passed the proposed tax ratification, or Penny Swap & Drop proposition by 89 percent in the November 7 election. The TRE approval lowers the overall Eanes ISD tax rate by more than a penny to $1.20 and adds an estimated $3 million of non-recapturable funds to the district's operating budget. The election engaged more than 5,800 voters who took time to participate at the polls.

"We appreciate the vote of the community, the support of students, teachers and staff, and the level of engagement in this important decision," said Superintendent Dr. Tom Leonard. "With this outcome, Eanes ISD will be able to keep more money local to be able to continue our shared commitments to attract and retain high-quality staff, maintain or lower current class sizes, continue program support and stability, create and maintain facilities, all with a focus on fiscal responsibility."

The Board of Trustees expressed gratitude to the Eanes ISD community citing the important role citizens play in providing students an exceptional education.

"On behalf of the Board of Trustees, we want to thank the parents and community members for always supporting students and teachers," said Board President Dr. Colleen Jones. "That support plays an important role in creating a quality school system. Passage of the TRE does ultimately mean a savings to taxpayers, but the real beneficiaries are our students. Passage is a true win for the entire community."

Even as a state recapture district, Eanes ISD has maintained one of the lowest ISD tax rates in Central Texas and has consistently demonstrated a proven track record as fiscally responsible while providing a high-quality education to students. "We maximize every dollar that does not go to recapture," said Dr. Leonard. "We will continue to do that with the additional funds we now have access to because the TRE passed. It will be very helpful as the Board considers possible increases to teacher salaries."

The passage of the Penny Swap & Drop helps keep locally collected taxes local. But with no new money coming in from the state for the next two years coupled with increased recapture mandates estimated to be $30 million, the district knows it will face some unprecedented budget challenges in the next two years. During the last decade, Eanes ISD has sent a substantial amount of locally collected tax income to the state because of recapture payments. For example, in the 2016-2017 fiscal year, Eanes ISD residents paid more M&O tax dollars to state recapture ($83.3 million) than they kept ($57.7 million) to fund the District's budget. EISD has lost more than $1 billion in funding because of annual recapture payments and requirements. The expected recapture rate for the district has a predicted increase to 63% by the 2018-2019 school year.

The District will continue to focus on funding its shared commitments to support quality programming, attract and retain high-quality teachers, maintain reasonable class sizes and maintain school facilities all with a focus on fiscal responsibility.

"We are grateful to our community," Dr. Leonard said. "The election results speak to the level of support and confidence our community has in our schools. Every student in Eanes ISD will benefit."

The Eanes ISD Board of Trustees approved unanimously for voters to decide whether to increase the maintenance and operations tax rate and decrease the interest and sinking fund rate, resulting in an overall reduction in the total tax rate, while keeping more money in Eanes ISD. If passed, the Penny Swap & Drop, also known as a tax ratification election (TRE) would:

  • drop the interest and sinking (I&S) tax rate 3.25 cents;
  • increase the maintenance and operations tax rate (M&O) 2 cents;
  • have the combined effect to lower the overall tax rate to $1.20 per $100 of tax valuation (from the current total tax rate of $1.2125);
  • increase the amount of local M&O tax dollars collected in Eanes ISD, that are not subject to recapture by approximately $3 million annually, allowing for more local control of local revenue.

Swapping the two cents from the I&S side to the M&O side will allow Eanes ISD to access two additional "Golden Pennies," which are NOT subject to recapture. All local revenue that is a result of Golden Pennies will stay in Eanes ISD.

The Eanes ISD Board has remained focused in its strategic objectives to

  • attract and retain high-quality staff by remaining competitive in salaries and benefits with other local school districts;
  • maintain or lower current class sizes;
  • continue support for curricular programs that are in line with our objectives.

Many of these objectives are budget-dependent, which led to the unanimous support of the Board to call for the Penny Swap & Drop. This proposal, should it be approved by the voters in November, would allow the community of Eanes ISD to increase the amount of local revenue in the Eanes School District to achieve these objectives.

For the community members who do not have children in Eanes ISD, this proposal, if approved, will lower the Eanes ISD overall tax rate, allowing us to fulfill a fundamental commitment to the community for Eanes ISD to be fiscally responsible.

The action taken by the Board changes the tax rate and automatically triggers a TRE, set for November 7, 2017. By voting in that election, the community will be able to confirm the Eanes ISD overall tax rate. Early voting begins in October.

To summarize:
If voters approve the Penny Swap & Drop,
the overall tax rate would be 1.20
If voters do not approve the Penny Swap & Drop,
the overall tax rate would revert to 1.2125