School Funding – What can Local Districts Do?

One of the sessions at this year’s Summer Conference was focused on things that school districts could do to improve their financial situation over the next two years. Dr. Doug Karr, school finance specialist did the presentation. His focus was on three aspects within the district: students, property values, and tax effort.

Even with the cut in funding from the state, districts will still earn money based on student counts. In this sense, school funding is simple: the more students you have, the more money you will earn. As we have discussed many times, certain students in certain programs generate more funding for school districts. For example, the number of students that qualify for free/reduced meals determines the amount of state compensatory funds a district receives. For the 2011-2012 school year, the amount will be based on the average of the six highest months of the previous year starting in October 2010 and going through September 2011. As a district, we have about 70% qualify for free/reduced meals. However, the percentages are not distributed evenly throughout the district. At Primary, we have 79.9% qualify for free/reduced meals. That percentage decreases to 73.6% at the Intermediate, 67.4% at the Middle School, and 58.1% at the High School. So, one of the simplest and easiest ways to increase our state funding is to make sure that all the students that qualify for free/reduced lunches are included in the program. To apply for this program, parents need to fill out the application that is sent home at the beginning of the school year.

One other student area that generates additional state funding is career and technology (CATE) classes. These are classes such as business classes, technology classes, and agricultural science classes. Statewide, we have seen a decrease in the number of students enrolling in these classes. This decrease is mainly associated with the increase in the academic requirements for students (the four by four program – four years of science, math, English, and social studies). To offset this increase in core academic classes, EHS has increased the number of periods offered in a day to nine (actually 8 classes and a tutorial period). We have been offering nine periods for the past few years. By increasing the number of periods in a day, we have allowed students to get in all of their academic courses, while also allowing them additional periods to pursue other interests (such as CATE courses). This nine period day has helped stabilize the number of students participating in CATE courses. However, we certainly have room for more students. If you are interested in CATE courses, or just want more information, please contact Phyllis Bice, HS counselor at pbice@eustaceisd.net, or Gwen Orr, HS academic advisor at gorr@eustaceisd.net. Teachers involved in the CATE courses include our agricultural science teachers Zach Tappan ztappan@eustaceisd.net and Theresa Tindel ttindel@eustaceisd.net ; our business teacher, Dee Dee Lancaster dlancaster@eustaceisd.net ; and, our technology teacher, Kathleen Krumm kkrumm@eustaceisd.net. They would be happy to talk to you about their programs and to answer any questions that you might have.

Property values will still play an important role in school funding. Over the last several years, EISD has appealed its property values (in order to get the value lowered) several times. Each time we have appealed, we have been successful in getting property values lowered. We will continue to monitor this area carefully.

The majority of local funds generated by a school district come from property taxes. Recall that a school district has two components involved in a property tax: the Maintenance and Operations ( M & O) portion , and, if the district has voter approved bonds, an Interest and Sinking (I & S) portion. Together, these two components make up the overall tax rate for the district. Several years ago, the state sought to lower property taxes and had districts compress their property tax rates. Prior to this compression, school districts could go up to $1.50 on the M & O portion of the rate. Now, most districts in the state are capped at $1.04. Districts may choose to pursue a tax rate election in which an additional $0.13 may be added to the M & O side if approved by the voters of the district. Currently, EISD has an M & O rate of $1.04 and an I & S rate of $0.2363, for a total tax rate of $1.2763. We have maintained the $1.04 M & O rate for several years. The I & S rate has varied slightly during those same years. EISD still maintains an optional homestead exemption of 20%. This reduction is in addition to the state mandated $15,000 homestead exemption. Of course, in his presentation, Dr. Karr suggested examining and modifying if necessary, the optional homestead exemption as a way to increase local revenue. In an attempt to get more property back on the tax rolls, the EISD Board of Trustees recently approved a plan to sell property in the Indian Harbor subdivision at a flat rate of $100 per lot. This sale has been successful and the district has sold well over half of the lots that are “owned” by EISD. We are hoping to extend this type of property sale to other subdivisions this coming school year.

We will continue to talk about school finance and other topics throughout the rest of the summer, which, by the way, is going by very fast! In 17 days, football, volleyball, cross-country, and band all start their official practices for the 2011-2012 school year!

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