Supporting New Tax Rate

Letter the the Editor,

The adoption of the budget and the setting of the tax rate are two of the primary responsibilities of a local school board. Our board takes this responsibility very seriously as they too are community members and taxpayers. Recently Buffalo ISD received its preliminary financial accountability rating from the Texas Education Agency and we received the highest rating of “Superior Achievement” with a perfect score in all areas. This requires that there is good management of the funding resources in place in the district under the supervision of the board of trustees.

The tax rate consists of two areas: the M&O rate (maintenance and operations) and the I&S rate (bonded indebtedness) which combined make up the total tax rate. The M&O rate is that amount needed in the budget for that fiscal year in order to run the daily activities of the school such as teachers, books, buses, food, equipment, etc… The I&S rate is the bond payment required for that year. The notice we published in the paper shows that the M&O tax rate is not increasing over last year. The proposed M&O rate is to stay the same even though we are adding an additional campus. We are also offering a Head Start program for qualified three year olds for the first time. We passed a bond election in November of 2006 to build our new High School. Therefore, combined with other bonds passed in previous years we must make our payment due for this year. The I&S rate needed to pay the bond this year is greater than last year for two reasons. First, our payment has increased this year and secondly, our property values have decreased by 100 million. This is the second year in a row that we have endured a significant decrease in our district’s property value. As a result, the I&S rate needed for this year would require an increase of 11cents to pay the bond payment. The board conducted a budget workshop and looked at all the information available regarding BISD finances both short term and long range. Fortunately the district has managed to maintain a fund balance in which reserves were available that could be used to buy down the I&S rate needed. The board considered all the factors and decided to publish a rate increase of 2 cents needed for the I&S rate, 9 cents below what is actually needed. When the bond was passed in 2006 the projected amount needed for the 2010 I&S rate was projected to be 36 1/2 cents. The rate published this year is $.2685 which is actually $.0965 below that projected rate. The last two years (2008 and 2009) the I&S rate adopted has been below the rate the financial advisors projected when the bond was passed by 12 cents. The published amount is the maximum amount that the district can increase its rate. The board can choose to adopt a lower rate than what was published. In other words the board may not increase to the rate needed or not raise the rate at all. The board is waiting to see the final projected numbers for this year as it relates to the 2009-2010 budget which will close on August 31st and the enrollment numbers for the 2010-2011 school year before making its final decision. They are very aware of the economic hard times that are affecting many people in our local area and are concerned about what impact a tax increase of any kind would have on them. Our reserves can be used for only so long until at some point they run out. The board must consider all these variables in making their decision.

The board has designated reserved funds that are being used for capital project improvements. This money has been saved over the last several years in order to not have to pass another bond election for improvements.

The board members are your elected officials and want to represent you to the best of their abilities. Let them know that you appreciate the job they are doing. They welcome your input on this issue or any other regarding BISD. This year our district was rated “Recognized” for the 1st time by the Texas Education Agency for student achievement and also won the UIL Academic District Championship in High School and Elementary School. We are proud of our past and look forward to the challenges of the future. Thank you for your support of our schools.

Sincerely, J. Thomason