1 LISD Budget & Tax Hearing August 23, 2004 Presentation by: R.J. Barber, Ed.D. Superintendent Jesus...
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Transcript of 1 LISD Budget & Tax Hearing August 23, 2004 Presentation by: R.J. Barber, Ed.D. Superintendent Jesus...
1
LISD Budget & Tax HearingAugust 23, 2004
Presentation by:
R.J. Barber, Ed.D.Superintendent
Jesus J. Amezcua, CPAChief Financial Officer
Rudy Sanchez, RTATax Assessor - Collector
2
Executive Summary
LISD receives moneys from three major sources:
17% Local Taxpayers – money used to
match State Funds
82% State of Texas Grants
1% Federal Funds – Competitive Grants
3
Total General Fund Revenues by Major Source
LOCAL REVENUES
17.25%
STATE REVENUES
82.16%
FEDERAL REVENUES
0.58%LOCAL
$ 27,059,920
STATE
128,863,341
FEDERAL
913,000
TOTAL
$156,836,261
4
Moneys from the Local Taxpayer
Via Appraisal Values from the Appraisal District
Tax Rate set by Board of Trustees
LISD must pay the first 86 cents of the education of a student and the rest are enrichment funds that match state dollars through tier 2 funds
5
Let’s Analyze our Tax Rate for M&O
.86 cents required by the State for Tier 1
.462291 Enrichment Match to bring in 83%
in State funds [Max is .64 cents]
1.32291 Total tax rate for last year
Note: Many districts DO NOT have this many pennies left. In fact, this is one of the reasons for West Orange Cove Lawsuit.
6
Where are we from the $1.50 CAP?
Tax rate since 1993
1992-1993 $0.8683
1993-1994 $1.0350
1994-1995 $1.0350
1995-1996 $1.0000
1996-1997 $1.0239
1997-1998 $0.9837
1998-1999 $1.02628
1999-2000 $1.22291
2000-2001 $1.28291
Nov 2001 $1.50 New Cap
2001-2002 $1.32291
2002-2003 $1.32291
2003-2004 $1.32291
Note: Robin Hood Started in 1993, Another Reason for West Orange Cove.
7
What are the revenues set?
Values x Tax Rate x collection rate = [($1,552,188,980 x $1.4741)/100 + $779,792] x 92% collection rate = $21,767,904
Amount necessary to generate:(1) .86 required match AND(2) enrichment enough to cover the total cost of educating 24,000+ children
8
Where are the Appraised Values?
1992-1993 1,165,027,413
1993-1994 1,203,400,429
1994-1995 1,283,385,896
1995-1996 1,346,689,990
1996-1997 1,269,001,135
1997-1998 1,313,353,144
Note: Robin Hood Started in 1993, Another Reason for West Orange Cove.
1998-1999 1,329,307,098
1999-2000 1,359,509,407
2000-2001 1,391,120,115
Nov 2001 $1.50 New Cap
2001-2002 1,430,691,752
2002-2003 1,492,399,445
2003-2004 1,681,169,772
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1,681,169,772
1,492,399,445
1,430,691,752
1,391,120,115
1,359,509,407
1,329,307,098
1,313,353,144
1,269,001,135
1,346,689,990
1,283,385,896
- 200,000,000 400,000,000 600,000,000 800,000,000 1,000,000,000 1,200,000,000 1,400,000,000 1,600,000,000 1,800,000,000
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004 Assessed Value 2,235,600,605 - Total Ex emptions (554,430,833) = Net Tax able Value
Assessed Value 2,168,024,420 - Total Ex emptions (675,624,975) = Net Tax able Value
Assessed Value 2,055,489,803 - Total Ex emptions (624,798,051) = Net Tax able Value
Assessed Value 1,980,731,251 - Total Ex emptions (589,611,136) = Net Tax able Value
Assessed Value 1,925,228,630 - Total Ex emptions (565,719,223) = Net Tax able Value
Assessed Value 1,891,246,886 - Total Ex emptions (561,939,788) = Net Tax able Value
Assessed Value 1,818,203,553 - Total Ex emptions (504,850,409) = Net Tax able Value
Assessed Value 1,757,769,664 - Total Ex emptions (488,768,529) = Net Tax able Value
Assessed Value 1,704,049,513 - Total Ex emptions (357,359,523) = Net Tax able Value
Assessed Value 1,635,069,091 - Total Ex emptions (351,683,195) = Net Tax able Value
Net Taxable Values
10
Taxable Values
Taxable Value from previous yearsMinimum growth of ~ $40 million/year
Taxable Value increase2004-2005 $ 1,681,169,772
2003-2004 1,492,399,445
Increase of $ 188,770,327
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Moneys from the State of TEXAS
LISD Receives Revenues from: Tier I = Foundation Funds – These are Basic Allotment
and includes: Regular Funds……………………………….. $56,329,225 State Compensatory…………… .15 Weight $11,633,235 Bilingual Funds ………………… .10 Weight $3,591,750 CATE Funds……………………. .35 Weight $3,069,073 Special Ed Funds………... Various Weights $11,994,785 Gifted & Talented …………………………… $372,514 Transportation ………………………………. $429,563
Part of the General Fund = $12,248,824
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Moneys from the State of TEXAS
LISD Receives Revenues from:
Tier 2 = Enrichment Funds $41,298,542
.5933 out of 64 cents
Part of the General Fund $20,699,369
Depends on local tax effort the first year of biennium
13
Moneys from the State of TEXAS
LISD Receives Revenues from:
Tier 3 = IFA $7,884,394 & EDA $2,326,320
.1512 tax rate for Debt Service to generate required payment match from local revenues of $2,400,000
Part of the Debt Service $2,232,734Targeted at .1512 cents at 92 percent.
14
Biennium and 8 to 1 dollars
Legislature meets on Jan 1999 1999-2000 (Sets Max) 2000-2001 Legislature meets on Jan 2001 2001-2002 (Sets Max) 2003-2004 Special Session May 2004 Legislature meets on Jan 2005 (West Orange Case
on going) 2004-2005 (sets Max) 2005-2006
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What is our current max?
Max set in 2001-2002:
$18,458,579
Max proposed for 2003-2004:
$20,699,369
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When setting the tax rate, we need to consider the following:
Appropriation Needs Salaries Programs Etc…
Values
Tax Rate CAP
Collection Rate
Partners Values and Collections
Cost per WADA for LISD and Partner
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LISD Appropriations Needs are:
2003-2004 $143,646,640
2004-2005 $152,924,281
Increase of $ 9,277,641
Reduction in Fund Balance of $3,988,748
Target Fund Balance at the end of Year $11,858,509
18
PFC issues and impact to General Fund
Paid through Maintenance & Operations Call to repay in 10 years and move it to Debt
Service – 5 cents Good Rating necessary to reduce interest cost Fund Balance of at least 1 to 2 months is
necessary to sell bonds and have them insured. No State Guarantee One or more bond sales Negotiated Sale
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How does this budget affect the General Fund Balance?
GENERAL OPERATING FUND BALANCE
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
ACTUAL ACTUAL ACTUAL PROJECTED PROPOSED
2000-2001 2001-2002 2002-2003 2003-2004 2004-2005
Undesignated Unreserved Fund Balance Designated Fund Balance
$13,811,845
$19,820,873 $21,034,919$18,847,257
$11,858,509
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Taxable Values
Average increase in the last 10 years is$40 million
2004 values = $180 Million OR 400% increase
IMPLICATIONS: More Local Dollars, More State Dollars, Less WADA Money next year only.
The following year, the District will get less state dollars and will have to increase the rate to meet the .86 cent match.
21
Why increase taxes in the following year?
For 2004-2005, LISD is using the 2003 tax values for State Minimum Match (.86 cents)
For 2005-2006, LISD will use the 2003 values which means that state dollars will be reduced then.
Let’s Look at the template…
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Implications of $180 Million in values
GENERAL FUND: More in Local taxes: $504,046 More in State dollars this year: $2,241,133 Less in WADA funds: $2,214,000
ONLY if Partner district decides that other districts are more attractive than LISD in terms of Cost per WADA
23
Implications of $180 Million in values
GENERAL FUND:Cost per WADA was $4,101 with Prelim.
ValuesNEW Cost per WADA is $4,183 MORE in State Funds $82 x 27,000 LOSS: $82 x 27,000 = $2,214,000$7,537,000 less $2,214,000= $5,323,000
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Impact to Cost per Wada
Variable Increase = Gain Decrease = Gain
LISD Values Wada Up = Less Wada Down = Up
LISD Rate or Collections
Wada Up = Less Wada Up = Up
Partner
Values
Their cost per Wada Up = More
Their cost per Wada Down=Less
Partner Rate or Collections
Their Cost per Wada Up = More
Their cost per Wada Down =Less
These assume that the partner variables and enrollment remain the same.
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WADA Considerations
Deer Park ISD Example7,500 x $200 = $1,500,000 7,500 x $83 = $622,500Gain is = $877,500
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Considerations
Reduce the tax rate and continue WADA Contracts [ Cost of WADA = $4,100 ]
Keep the tax rate and loose some of the contracts [ Cost of WADA = $4,183 ]
83 x 27,000 = $2,241,000
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Implications of $180 Million in values
DEBT SERVICE FUND:Local taxes Needed: $2,453,234
State dollars this yr: $10,210,714
Less rate required at 92% of values: $.1512
Reduction in I&S rate of $0.0286
28
Debt Service Fund
Increase in Taxable Values
of over $180,000,000
3¢ Tax Rate reduction due to values
to meet Debt Service Payments
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Presentation by Tax Assessor Collector / on values
Values: Improvements: $69 M
Exemptions: $111,206,897 M
Laredo Medical Center: $108 MHEB –South: $3.2 M
Current Year 2003 $1,492,399,445Certified 2004 $1,681,169,772
Variance $ 188,770,327
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Presentation by Tax Assessor Collector
CurrentRate
Rollback Rate
Effective Rate
(Not required)
Proposed
Rate
M&O $1.32291 1.3664 1.3064 $1.32291
I&S
$.1798 0.1512 $0.1512
Total
$1.50$1.51 $1.47411
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Summary
Preliminary Budget Prelim- Values
$80 Million $1.54 3 cents in M&O 1 cent in I&S WADA Cost $4,100 WADA Gain $5.9 M
Option Budget # 1 Certified Values
$180 Million $1.4741 No change in M&O and 2.8 cent reduction in I&S. WADA Cost $4,183 State Gain and Loss
$2,214,000 Local Gain $531,179 Loss $2.214,000 in WADA K
Preliminary Values
32
Option Budget # 2 = $1.4641 One cent reduction in
M&O and 2.8 cents reduction in I&S
3.8 cents reduction WADA Cost - $4,156 Gain in State of
$2,726,888 More Local Funds
$293,380
Options
Option Budget # 3 = $1.4591 Two cents reduction in
M&O and 2.8 cents reduction in I&S
4.8 cents reduction WADA Cost - $4,142 Gain in State of
$2,416,304 More Local Funds
$225,964
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Basis for Recommendation
$180 Million unprecedented increase
WADA K are maintained at 1.4741 cents reduction.
Reduction in Fund Balance is minimized
LISD to rely on WADA gain to balance the budget
Possible increase in the future for PFC = 5 cents
Possible increase due to .86cent Min match in 2005
Collection rate of 92% due to increase in values
Reduction in value for I&S of 2.8 cents
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Summary: What to look for?
For 2005-2006:Maintain a conservative look at salaries:
$1,500 teachers3% for other employees
This means: $3,200,000 in new money. $1,500,000 Furniture Money for new schools
$4,700,000
35
Summary: What is the next step?
Adopt the budget
Adopt the tax rateM&O $1.32291I&S $0.15120
Total $1.4741
36
Comments???