Superintendent Update for September 12, 2023
I continue to be impressed with your students and staff. The support of parents and the willingness of your school board to learn and grow, and to provide the best education for students is inspiring. The past two weeks of home football games, volleyball, and Homecoming festivities have been busy and demonstrate a high level of student and community participation.
We all have a fiscal responsibility to be good stewards of your tax dollars. The district recently adopted a budget and set a tax rate to fund the 2023-24 school year. I would like to clarify the processes currently in place that we follow this time of year. State funding continues to shift from the state’s obligation of “providing a free and appropriate public education” to an increased burden on local taxpayers. In past years, the state paid no less than 60% of the cost to educate students in Texas, leaving 40% of the cost to local taxpayers. In 2022, Texas funded 44% of the cost to educate students, leaving 6% to the federal government and 50% for local taxpayers to fund. The state base amount of funding was set at $6,160 per student in 2019, which has remained unchanged since that time. With a 20% inflation rate since that base figure was established all Texas public schools are required to do more with less.
At Vega ISD, several factors have impacted losses in revenue and caused the district to operate with projected deficit budgets for the last three years. The first of those is the reduction in state funding with no increases to account for inflation. The second factor is a decline in taxable property valuations. The 2021 total taxable value was $469 million which has decreased to $390 million in 2024. At the current tax rate of $1.23, that loss in value is worth over $900,000 in total revenue over the past four years. Factored into that figure is the taxable valuation decline of 13% on the Windfarm Projects since 2022.
Some have asked, “if we need more tax dollars, why did we approve a lower tax rate of $1.23 when the tax rate in 2022-23 was $1.36? Couldn’t we have generated more local dollars by leaving the tax rate at a higher number”? The answer to that question is that the school district is required to follow tax compression guidelines by the Texas Education Agency. These guidelines require districts to tax at a rate no higher than determined with the option to add five cents without voter approval. These five cents are known as “golden pennies” and they generate more money from the state as they look at the taxing effort of the district. So, while values decline, a required lowering of the tax rate also generates less local revenue. Some have also asked if building the new high school has caused money issues. We have an I&S tax rate which is used to pay the bonded debt for the new high school and we have an M&O tax rate that is used to fund educational programs. The Interest and Sinking(I&S) funds are separate from the Maintenance and Operations(M&O) funds. We generate money to pay the bond payment of approximately $1.6 million this coming year and to budget a large payment of $600,000 on the principal in addition to that figure. These dollars can only be used to pay the bonded indebtedness and would not be generated by tax dollars otherwise. The new building is a great facility and something that the community should be proud of providing for students. It is being paid for by taxpayer dollars but has little effect on the M&O budget.