Transcript TAX RATE ELECTION (TRE)

TAX RATE ELECTION
(TRE)
Legal & Local Considerations
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LEGAL CONSIDERATIONS
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If a board adopts a tax rate above its
rollback tax rate, it must hold an
election 30-90 days after adoption of
the tax rate.
In order to use the November 4 uniform
election date, a school board must
order the rollback election by August
26, 2008, which is 70 days before the
election date (Tex. Elec. Code 3.005c). 2
LEGAL CONSIDERATIONS
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Rollback elections are not required to be held
jointly with other political subdivisions.
However, if a district chooses to hold a
rollback election with a trustee election, the
rollback election will be covered by the same
joint election requirements as the trustee
election. If the rollback election is held on
the general election date, school districts
must use the same election-day polling places
as counties within the districts’ boundaries
(Tex. Elec. Code 43.004b).
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LEGAL CONSIDERATIONS
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School districts are required to use handicapaccessible voting systems in rollback elections.
Contact your county about the availability of
voting machines. Smaller counties and political
subdivisions may be exempted in some cases
from the requirement to provide accessible
voting systems at each polling place. For more
information, contact the Sec. of State’s Office.
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LEGAL CONSIDERATIONS
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Rollback elections may require preclearance
by the Department of Justice. Districts using
the November uniform election date should
consider coordinating preclearance
submissions with the county.
A sample rollback election ballot can be found
in Appendix 6 of the Comptroller’s Truth-inTaxation Guide.
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LEGAL CONSIDERATIONS
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If a majority of the votes cast in the
election favor the proposition, the tax
rate for the current year is the rate
adopted by the board. If the
proposition is not approved, then the
board may NOT adopt a tax rate for the
current year that exceeds the rollback
rate (Tex. Tax Code 26.08).
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LEGAL CONSIDERATIONS
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Public funds cannot be used for political
advertising or electioneering to support a
rollback election. School districts are
permitted to communicate with taxpayers by
producing explanatory materials about what
is at stake in a rollback elections as well as
information about the conduct of the election
(date, polling sites, etc.) as long as there is
no advocacy in the materials.
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LEGAL CONSIDERATIONS
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“TENTATIVE” 2009 Planning Calendar
July 25: Deadline for receipt of certified
local value from CAD. Must possess
before adopting a tax rate that is above
the rollback limit.
Meeting to decide on the public meeting
date on budget and proposed tax rate
that is voted on by the board.
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LEGAL CONSIDERATIONS
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“TENTATIVE” 2009 Planning Calendar
Notice published 10-30 days before the
public meeting
Public meeting on budget and proposed
tax rate followed by a meeting(s) to
adopt the budget and tax rate (may all
be done in one meeting)
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LEGAL CONSIDERATIONS
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“TENTATIVE” 2009 Planning Calendar
August 1: 62 days before October 3
(Elections must be ordered before this
day to have elections on a date other
than November 3)
August 25: Last day to order general
election (election ordered on this day
will be held on November 3)
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LEGAL CONSIDERATIONS
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“TENTATIVE” 2009 Planning Calendar
October 3: 30 days before the General
Election Day (Black out period)
November 3: General Election Day
December 3: 30 days after general election
day (Black out period after general election)
If district is unable to hold election on general
election day, the election date will be after
December 3
After Election, mail current year tax bills.
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LEGAL CONSIDERATIONS
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SUMMARY
Reference the 2009 TNT Guide
Consult the school district’s attorney
- Verify all timelines and deadlines
- For the rollback election order
Start Planning Early
Remember a chapter 313 agreement
precludes a TRE 2 years after execution
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LOCAL CONSIDERATIONS
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Analyze Your Data (& your neighbors’)
Target Revenue
WADA Trends
Financial Conditions
- Operational Costs (Payroll, Fixed, etc.)
- Fund Balance
Chapter 41 Status & Recapture
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LOCAL CONSIDERATIONS
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Preliminary Details
Realize that it is difficult for boards and
taxpayers to believe and accept the long-term
financial effects of HB 1
Too much fund balance (a public perception)
hurts the cause for a TRE
Be able to verbalize budget reductions and
other implemented efficiencies prior to the
need for an increased tax rate
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LOCAL CONSIDERATIONS
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Don’t Hurry!!!!!
Involve the Board
Involve the elected officials
representing the school
Involve all other stakeholders
Compute & Communicate the Financial
Impact (see illustration)
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TAX RATE/REVENUE
COMPARITIVE ESTIMATE
NET OF RECAPTURE
Local Revenue
State Revenue
Total Revenue
Per Penny Revenue
@$1.04
@$1.17
Difference
$21,629,359 $24,020,241 $2,390,882(1)
$10,302,783 $10,456,005 $ 153,222
$31,932,142 $34,476,246 $2,544,104
$2,544,104 / 13 pennies = $195,700
(1) Tier II, Level 3 estimated recapture = $312,788
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LOCAL CONSIDERATIONS
Approach a TRE like a Bond Issue
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Communicate it to the public
Seek public input
Coordinate with other special funding
needs (bond issues, capital
improvements
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LOCAL CONSIDERATIONS
Determine the Purpose(s) for the TRE, IF ANY
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Teacher Salaries
Minimize fund balance depletion
Maintain pace with inflationary costs
All of the above
Other(s)
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LOCAL CONSIDERATIONS
Gauge Opposition to the TRE
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The Board of Trustees
Taxpayer Watchdog Group(s)
The 65 and older population and their
perception of tax rate increases
Special Election vs. General Election and
the perception of “stacking the vote”
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TAX RATE ELECTION (TRE)
THE HISTORICAL CONTEXT
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OBSERVATION
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Under House Bill (HB) 1
- “It’s not a matter of IF you are going
to have a tax rate election, but WHEN
you will have it.”
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BACKGROUND
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1025 ISDs Statewide
- 14 Successful TREs in 2006 (1.37%)
- 93 Successful TREs in 2007 (9.07%)
- 70 Successful TREs in 2008 (6.8%)
177 Successful TREs Statewide in 3
Years (17.27%)
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BACKGROUND
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2006 – 14 of 15 TREs passed (93%)
2007 – 93 of 119 TREs passed (78%)
2008 – 70 of 116 TREs passed (60%)
Total 177 / 250 TREs passed (71%)
NOTE: Totals may differ by 1 or 2 with
other sources.
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BACKGROUND
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Districts Conducting 2 TREs
- Not Approved/Approved (6)
- Approved/Approved (2)
- Not Approved/Not Approved (2)
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FINDINGS/CONCLUSIONS
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90% of the ISDs conducting TREs have
target revenue below the state average
($5,076)
TREs for less than the full 13 cents have
a slight advantage but may cause
multiple elections.
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FINDINGS/CONCLUSIONS
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There has been a decline in the
passage rates of TREs from 93% (2006)
to 71% (2008)
Early elections (October) seem to have
better success than those held later
(November)
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FINDINGS/CONCLUSIONS
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74% of the bond proposals passed in
the November 2008 election but only
50% of the TREs passed on this same
day????
The current economic conditions may
affect the future success of TREs
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FINDINGS/CONCLUSIONS
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A TRE is a short-term solution to a
long-term problem
TREs are framed in very unique
situations in very unique ISDs making
comparisons difficult
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CONTACT INFORMATION
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Doug Karr, Ed.D.
Contracted Services in School Finance
Office Phone: (806) 785-6676
Cell Phone: (806) 778-6440
Email: [email protected]
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