by Coy Holcombe.
EISD is one of 215 school districts in the state that offers an optional homestead exemption to the taxpayers of the district. Several years ago, the state routinely subsidized this additional exemption by allowing school districts that offered an optional exemption to use a lower tax value in their state aid calculations. This resulted in additional state aid for districts offering this exemption to the taxpayers.
Because of budget constraints, the state, in recent years, no longer automatically funded this exemption. There was a provision in state law that stated if funds were available the commissioner of education may choose to fund this exemption. EISD was notified yesterday that the commissioner will fund the optional homestead exemption for the 08-09 school year. As a result, EISD will be allowed to use what is called the T4 value from the comptroller in state aid calculations. Usually, school districts are required to use what is called the T2 value. The T2 value is defined as the "taxable value after the loss to the additional $10,000 homestead exemption." The $10,000 is a statewide homestead exemption. The T4 value is defined as "T2 minus 50% of the loss to the local optional percentage homestead exemption." EISD offers an additional 20% homestead exemption in addition to the $10,000 exemption.
The bottom line is that now instead of having to use the larger T2 value of $437,968,189 as the value in the funding formulas, we will be allowed to use the smaller T4 value of $417,510,752. This will increase our state funding – not by a large amount – but our state funding will be increased. We will look at the impact that this has in future posts.