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LISD adopts budget, tax rate

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Leander ISD trustees approved the 2008-09 budget and tax rate at their Thursday, Aug. 21, board meeting. The total tax rate is $1.3792, which includes $1.04 for maintenance and operations (M&O) and a $0.3392 tax rate for repaying debt.

For a home with an average taxable value of $223,094, the new tax rate will mean an annual increase of $197.14, or 6.85 percent. Last year's combined tax rate was $1.3334, including an M&O rate of $1.0058 and an I&S (Interest and Sinking) rate of $0.3276.

The budget calls for $273.9 million in total expenditures, including a general operating fund budget of $208.9 million, a food service budget of $9.6 million and a debt service budget of $55.4 million. Total estimated revenue is $255.6 million.

LISD will use $5 million in operational savings from the 2007-08 budget, plus additional state aid to supplement the operational budget. LISD will use $13 million ($12.5 million in interest and $779,669 from excess debt service fund balance) to supplement the debt service budget revenue for 2008-09.

Most of the budget - 86 percent - will go to personnel.

The board approved the budget 6-1. Trustees Don McCall, Don Hisle, Jim Sneeringer, Russell Bundy, Will Streit and Grace Barber Jordan voted in favor. Trustee Elizabeth Frey voted no.

The tax rate was approved by a vote of 5-2. McCall, Hisle, Sneeringer, Bundy and Jordan voted in favor. Trustees Will Streit and Elizabeth Frey voted against.

With little sign of a new school funding package this session of the Texas Legislature and uncertainty about the ability to levy taxes in the future, the board opted to stick with the tax rate and budget as presented by staff.

“We had hoped for a solution this session, but we're looking at two more years of frozen revenue,” said Assistant Superintendent for Business Operations Ellen Skoviera.

Streit proposed an alternate plan, one that would take advantage of lower costs associated with replacing the Bible Stadium structure instead of repainting it. He wanted to use the $2 million in estimated savings for tax relief. He said the district could still afford to put $450,000 in its major maintenance fund, and apply it to the general fund, as a way to keep from raising property taxes. LISD currently dedicates 3 cents of the M&O rate toward major maintenance fund, a practice that has helped boost the district's bond rating.

Skoviera worried that not levying the proposed tax rate would mean $2 million in lost revenue that the district might need later. “My fear is that sooner or later we're going to lose the ability to levy that money,” she said. “If we give up that $2 million now, we could lose it forever and not be able to get it back.”

Streit said he understood the logic, but had a different preference.

McCall thought it would be a mistake to “not put money in your rainy day fund when you know it's going to rain.” He said LISD's bond rating improvements were based in part on the district's ability to set aside money for major maintenance. “If our bond rating goes up, it could cost taxpayers $10 million to $12 million.”

Sneeringer said he understood Streit's perspective, but thought the financial risk to the district by not levying enough was too great, in light of potential action by the state legislature. “Several years ago, I was making an argument very similar to what Will's making,” Sneeringer said. “I lived to regret it and I'm glad I lost. Evaluating the risk for the taxpayers, I don't think the savings would be big enough to justify what it might mean down the road.”

Hisle said the district's M&O funds would be stretched again next year and he worried that school programs could be threatened by not setting a high enough tax levy. “I want to make sure we preserve our culture,” he said.

“I see what you're saying,” said Jordan. “In the best of all possible worlds I would agree with you.” She said LISD was punished by the last state school finance law, because it wasn't taxing at the maximum rate like many other districts.

Although he didn't win over the other trustees to his way of thinking on the budget, Streit did get respect for his thought process.

Jordan liked Streit's ability to “think out of the box.”

“That creative stuff is really valuable,” said McCall.

Hisle said he understood Streit's logic and noted, “I respect what Will's done.”

Bundy said, “Don't stop thinking like that.”

Although she didn't present an alternate proposal, Frey worried that the district was living beyond its means. “I am concerned that we took $4 million from fund balance last year and we're taking $5 million this year,” she said. “We've got to figure out how to rein in our expenses. We seem to be going out of our budget. That's the way I feel. How do we do it? That's not my expertise.”

Skoviera said the decision was made to dip into fund balance with the knowledge it would be needed to get through a legislative period where the district's revenue was frozen. Without new legislative action, that period is continuing longer than expected, however.

Skoviera said efforts were being made to keep personnel and other expenses low and if any money is left at the end of the year, it goes back into the fund balance. “There is no slush,” she said.

“We are confident we can get through the next two years,” Skoviera said. “If it goes longer, we will have to make changes.” The district might have to increase class sizes in middle school or high school, she said.

E-mail charles@hillcountrynews.com

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