SCHOOL FINANCING AND PROPERTY TAXES
BY GRANT BOWLES - SISD Long Term Planning Committee Member
This week’s letter is going to be about one of the most interesting topics I learned about while on the bond committee, school finance. Let me start by saying this…school finance is more complicated than I thought before learning about it during our meetings. The school finance system in Texas uses a mixture of local and state sources to fund public schools. Local funding comes from one primary source, school district property taxes. State funds come from multiple sources, but the primary source of state funding is called the Foundation School Program (FSP). These funds are paid to the district using a formula based on the Average Daily Attendance, with additional factors called Weighted Average Daily Attendance (WADA). This is based on factors such as Special Education, Career &Technical Education, and Gifted & Talented Education numbers. Essentially, Sanger ISD receives state funding based on the number and type of students enrolled in the district on any given day.
The remainder of the funds used to run our school district is received from local school district property taxes. Those taxes go in to two separate categories. Think of them as two separate accounts. One is set aside for Maintenance and Operations (M&O). This funds the day-to-day operations of the school district, and covers everything from transportation costs, staff and teacher salaries, utilities, minor repairs to facilities, and extracurricular activities for students. This money cannot be used for building new facilities. The maximum allowed M&O tax rate for a district is $1.0641. In 2021, the Sanger ISD M&O tax rate was 0.960300. This tax rate will not change with the passage of this bond.
The Interest and Sinking tax rate can only be used to provide funds for payments on the debt that finances a district’s facilities. This includes major repairs and new facility construction. It is used to fund projects that that require long term financing. In terms we can all understand, think of this money as a mortgage. The 2021 I&S tax rate for SISD was .1820. This bond will raise this rate by .30.
The combination of M&O and I&S taxes gives us the total tax rate levied by the school district. The total tax rate cannot exceed $1.50, by law. If this bond passes, our rate will be below that max rate, unlike many other districts in the state. Let’s put that into real dollars. The M&O rate stays the same, but the I&S rate will increase. That means for every $100,000 of property value set by the Denton County Appraisal District, a homeowner will pay an extra $25 per month.
Let’s talk about why I trust the district with these tax dollars. From 2010 to 2021 the I&S tax rate for Sanger ISD has decreased from .32 to it’s current rate of .182. The tax rate has fallen because our district made good financial decisions. They refinanced some of the debt while rates were historically low, and they paid off earlier bonds. If you’re wondering why your total tax bill hasn’t fallen, that’s because of the property values set by the Denton County Appraisal District. We all know what’s happened to property values, but I feel that Sanger ISD has done a good job of managing the debt and using our tax dollars efficiently.
How does Sanger compare to other area schools that are in or near our size? We currently rate as the third lowest property tax rate in our area. Bridgeport and Gainesville have lower tax rates. With the passage of this bond we will move above two schools in our area and be the fifth lowest in property tax rate for our schools. We will pass Pilot Point and Decatur. We are significantly below most other schools in our area in tax rate and will continue with an overall lower tax rate compared to area schools.
Yes, this bond will increase your taxes. Everyone on the bond committee struggled with that fact, knowing the tax increase will impact our friends and neighbors in the district. We made hard decisions during those meetings and chose only the projects that will bring the greatest benefits to our students. Each project will impact our kids well beyond the improvements and updates they will see in the buildings. It will give them greater opportunities and allow more kids to be involved in programs that will make them more successful adults. Your tax dollars are being spent wisely.
Not only do our students need this bond, with the new and updated facilities included, but our entire community will benefit because this bond will point us in the right direction. With growth happening not only in Sanger but in cities around us, having good schools will help us attract the right kind of businesses and new residents. We already have a really good school system. This bond will make it even better. Vote Yes for Sanger ISD on May 7.
