The following is the fourth in a series of questions being presented about the upcoming DeLeon ISD bond issue that will be on the May 12 ballot. The response for the questions are provided by Dr. Randy Mohundro, Superintendent of Schools for DISD.

Question - “DeLeon's economy has been suffering in recent years with the loss of the peanut growing and all.  A large portion of our residents are retirees on a very limited income.  How can we possibly afford the new schools?”

For the local taxpayer, this bond issue WILL NOT result in a tax rate increase.  The reason is due to an increase in state assistance for the local operational school budget and in receiving state assistance for debt that is incurred for the construction of school facilities.

 The State of Texas has opened a window of opportunity for schools in Texas such as DeLeon.  The passage of the most recent school finance legislation during last summer’s special session mandated that the state would begin to pay a larger portion of the operation portion of a school’s operational budget.  In return, school districts would lower their operational tax rate as they begin to receive this additional state funding.  A part of this reality was seen in DeLeon this past August, when the DeLeon ISD Board of Trustees lowered the total tax rate for the district from $1.36 per $100 of property value to $1.2492.

The district will see this same effect in the coming budget when the district will again lower its total tax rate by approximately $0.29, based on current year property values.  The debt service tax rate that will be needed to pay for the new facilities for the district will be approximately $0.26.  This means that, even with the district incurring new debt, the tax rate for the coming school year will actually be lowered or decreased again by $0.0325.

While the tax rate is a trade-off between the operational tax rate and the debt tax rate of the district, the total tax rate for the local property owner will be less by $0.0325 than the previous year, and if you compare the tax rate for 2007-2008 to the 2005-2006 tax year, the rate will have decreased by $0.1433.

DeLeon ISD is in a unique position to take advantage of what the state is doing, and to use it to maximize and benefit its students and the community of DeLeon. However, there is another benefit that the district can utilize.

Throughout the history of public education in the Texas the responsibility of paying for school facilities has always fallen on the local community.  Only since the mid-1990’s have programs been introduced by the state, which have shifted some of the burden from the local district to becoming one that is also being shared by the state.

Beginning in 1999, the state created a program that has been known as the Existing Debt Allotment.  This program provides state money to school districts to help in making their annual debt payments for school facilities.  The debt that DeLeon incurred in its last bond election in 1992 has been in this program since it originated.

Currently, the state is paying $0.42 of every dollar that the district pays on this debt.  The district receives state funding dedicated for that sole purpose.  It is the receipt of these funds that allows the district to have current debt tax rate of only $0.0292.   If the district did not receive these state monies, then the debt tax rate for the 1992 Bond would be $0.05, an increase of just over $.02.

The door is again being opened by the state for DeLeon to receive this type of state assistance for the purpose of improving school facilities.  The legislature, is currently meeting to put monies into the state budget for this particular program.  DeLeon qualifies for this program and would receive from the state approximately $0.43 of state assistance for every dollar of debt obligation incurred by the district.

In other words, the State of Texas will become a partner with DeLeon in this project, and will be responsible for 43%, almost half, of the debt for the project.

If the district did not receive this assistance, then rather than a tax rate decrease, the local tax payer would see an increase in their tax rate, compared to the current rate, by approximately $0.15.

The DeLeon ISD Board of Trustees has pledged that the only way that they will move forward with this project is with state assistance and a tax-rate decrease for the local property owner.

The Board has shown its dedication for this pledge in allocating from the school district’s reserve funds of $1,000,000 to be used for these improvements.  The total cost for all of the projects has been projected to be $8.9 million.  The Board intends to use district monies, which have been saved for the specific purpose of building and improving the facilities of the district, to help out with these costs.

The use of this money will NOT jeopardize the financial soundness of the district.  The district will continue to have over $1,000,000 in reserves, an excess of over $200,000 of the amount the state requires school districts to maintain. 

 The Board is committed to keeping the district on strong financial ground. They are diligent in their responsibilities to the local tax payers in overseeing the actions of the school’s administration with regards to finance and its effects on all parties involved.

For those tax payers that have seen their property taxes frozen due to the Over-65 exemption, their taxes will not go above the levy.  They will also see a proportional decrease in their total tax bill in relation to the freeze that they may currently have.

Because this type of scenario will probably not happen again, it is imperative that DeLeon seize the opportunity to improve the facilities and the infrastructure of the community.

There will be no increased burden on the local taxpayer and in fact, the local tax payer will actually see their total school tax rate lowered.  This situation is a win for the school district and a win for the local taxpayer.

Above all, it is a much needed win for the students of DeLeon ISD and the community of DeLeon.