Richardson Independent School District is calling for a 13-percent increase in the district’s operating tax rate, triggering a Tax Ratification Election (TRE) to approve the tax hike.
Richardson ISD board members voted June 6 to increase the district’s property tax rate from $1.39 to $1.54 per $100 of assessed taxable value. Trustees say they need the tax increase to cover their proposed six-percent increase in operational spending in 2018-19, as well as millions in projected deficits over the next five years.
The 13-cent increase would go to maintenance and operations (M&O) spending, raising that portion of the tax rate from $1.04 to $1.17 — the maximum allowed by state law. The debt repayment (I&S) portion of the rate will remain at $0.35.
Voter approval through a TRE is required for a school district’s operating tax rate to exceed $1.04. RISD has maintained an M&O tax rate of $1.04 since 2008.
The district raised its I&S tax rate by five cents in 2016 with the passage of its $437 million bond package – the largest in the district’s history. RISD taxpayers currently owe $936.5 million in outstanding debt principal and interest, according to the Texas Bond Review Board.
If voters approve the rate increase, the average homeowner’s property tax bill will increase by $296 a year as a result of the increase, from $3,171 to $3,467 for a home with the average taxable value of $228,000.
Due to higher property values, local taxpayers will see higher tax bills even if voters reject the rate increase — $398 higher for the average homeowner.
RISD would collect an additional $30 million a year from the rate increase, with approximately $5.8 million of that lost to recapture, according to the district’s 2018-19 budget proposal.
Since 1999, RISD has paid a total of $372 million in recapture funds under the state’s Chapter 41 Wealth Equalization program, also known as “Robin Hood” — from a high of $55.9 million in 2004, to a low of $7.56 million in 2009, the most recent year the district paid into Robin Hood. Those are dollars paid by local taxpayers but redistributed to other school districts.
“For those who believe in safe schools, outstanding teachers, and maintaining a strong district that meets the high expectations of our community, this action could no longer be avoided,” RISD board president Justin Bono said in a statement following the tax-hike vote.
The district proposes spending $340 million on operating expenses in 2018-19 — approximately $8,200 per student. That’s up six percent from this year’s $321 million operating budget. Student enrollment grew by just 0.1 percent in 2017-18 and is projected to grow by 0.8 percent in 2018-19.
With a constant M&O tax rate of $1.04, RISD’s per-student operating revenue increased 10 percent, from $7,435 to $8,189, over the four-year period from 2013-14 to 2016-17 (the last year for which data is available).
Payroll accounts for 90 percent of the district’s operating budget. The proposed budget for next year includes $6.7 million for 2.5-percent across-the-board pay raises, plus new expenditures for “safety and security” — expenses the board says they will not be able to afford if the TRE fails:
“If voters do not approve the TRE, the district would be unable to fund strategic planning initiatives or teacher compensation increases, and would also be facing an operating budget deficit of a projected $58.9 million over the next five years.”
Over 39,300 students are currently enrolled across the district’s 54 campuses. More than half are economically disadvantaged; a quarter have limited English proficiency. Trustees say that makes RISD’s current student population “more expensive to educate than at any point in district history.”
The district adopted a $6.3 million deficit budget last year, using fund balance reserves to provide three-percent raises to teachers and staff and pay operating costs, and says it has already incorporated cost-saving measures into this year’s budget.
The board didn’t pinch pennies with district leadership. RISD pays Superintendent Jeannie Stone the eleventh-highest base salary in the North Texas region that includes Dallas, Collin, and several surrounding counties. (Grand Prairie ISD Superintendent Susan Hull is the highest-paid in the region, with a base salary of $405,795 plus tens of thousands in perks.)
Stone’s contract with RISD for January 2017 through June 2020 guarantees her a base salary of $285,000 a year plus an annual “Longevity/Retention Payment” equal to five percent of her salary ($14,250). In addition, she is paid a $1,000 monthly automobile allowance, bringing her total annual compensation to $311,250. Stone also received a one-time relocation payment of $10,000. The district’s leadership team also includes a deputy superintendent and four assistant superintendents.
Trustees originally called the tax ratification election for Tuesday, September 4 — the day after Labor Day — but later moved the TRE to the general election date of November 6 due to “feedback from community members.” Holding the tax ratification vote on a uniform election date will increase participation and reduce costs.
Current Tax Rate: $1.39
Proposed Tax Rate: $1.52
M&O Rate Increase: 13 cents (from $1.04 to $1.17)
Additional Annual Revenue: $25 million (net of recapture)
TRE Date: November 6 (revised from September 4)
Complete information about the election is online at https://www.risd.org/tre2018/.