By now, most Texans have heard some news of the dire financial situation facing public school districts across the state. Voters in the San Antonio Independent School District (SAISD) are being asked to take part of the solution into their own hands as a community, as the district seeks a Tax Ratification Election (TRE) in November.
But what is the TRE? Why is it necessary? What will it do?
Before you vote yay or nay, take a little time to get to know the TRE.
How We Got Here
Districts have filed suit against the state for inadequate and insufficient funding since Edgewood v. Kirby in the 1980s. New districts and coalitions take up the cause every decade or so, while the formulas grow more and more outdated.
In May, when the Texas Supreme Court ruled against the coalition of more than 1,000 districts seeking finance reform, it dealt what may be a fatal blow to those hoping for judicial resolution to the issue. While the justices acknowledged that the funding system was woefully in need of updating and improvement, they deemed the system minimally constitutional, and passed the ball back to the legislature to improve it.
“There’s no pressure on the legislature to increase funding to our schools,” SAISD Superintendent Pedro Martinez said.
Given the track record of the Texas legislature, which, since 2011, has stripped more money than it has added to district coffers, school leaders are not hopeful.
The SAISD school board decided not to wait around wringing their hands. Martinez agrees that underfunding should not be a cause for underperforming, so he wants to eliminate the underfunding and keep raising the performance standard, unhindered.
“The state’s not going to help us on this end. We have to appeal to the parents, the businesses, to the community in general,” SAISD Board President Patti Radle said.
Where The Money Comes From
When Texas’ school finance system was established in 1949, the State determined that the best way to fund schools was through property taxes.
Here’s a very simplified explanation.
Every district has a basic allotment based on their student population and district characteristics (urban/rural, large/small, etc). That allotment is then adjusted for special populations within the district. For example, English language learners are allowed 10% more than the basic allotment. Students in speech therapy are allowed 50% more.
The total basic allotment, with all additional allowances – called weights – added in, makes up a district’s entitlement.
In 2006, the state set the compressed tax rate at $1 per $100 of property value, on average. It can vary slightly. In SAISD it is $1. If you have a $100,000 home, you pay $1,000 in property taxes.
Right now, property tax revenue goes toward the district’s entitlement. The state kicks in the remainder. For instance, if a school’s entitlement is $400 million and they raise $100 million per year in tax revenue from $1, the state gives $300 million per year.
The state receives funds from the Available School Fund, lottery proceeds, recaptured property taxes, and taxes on oil and natural gas, franchises, tobacco, and used car sales. Districts that make more than their entitlement through $1 property taxes are subject to recapture what many call the Robin Hood tax. Over the years, wealthy districts have found ways to make up for their recaptured funds through other credits and state programs, according to Chandra Villanueva of the Center for Public Policy Priorities.
Recognizing that this would not be adequate to fund most districts, the legislature allowed districts to raise their tax rate to $1.04 without voter approval. To go as high as $1.17, the maximum allowed tax rate in the state, districts would need voter approval.
This is where is gets really tricky.
The first six pennies over the $1 rate are called golden pennies. In addition to the revenue gained through those cents of the tax itself, the state will match the funds to reach the rate they would be worth in Austin. In 2017, every penny of tax in Austin ISD is worth about $77.53.
In case you wonder: Austin ISD was chosen because its property value is very high, and it does not have to educate a large number of kids relative to that value. They have a lot of revenue and they don’t have to divide it very far, so their pennies of property tax earn a lot of revenue and go a long way.
Golden pennies are not subject to recapture.
Copper pennies, the next 11 cents taking the rate up to $1.17, are subject to recapture. In the 1990s, the state set the value of those pennies at $31.95. If the district brings in less with each copper penny of tax, the state will make up the difference. If the district brings in more, the State recaptures the surplus.
Minimal SAISD pennies will be subject to recapture. A demographic survey conducted by the district found that only 12% of the tax base are homes valued more than $100,000. More than half of the tax base is over 65 and exempt from tax increases.
The tax increase will directly yield $15.6 million. The state, through the golden and copper penny formula, will then contribute $16.5 million. The total new revenue to the district will be $32.1 million.
What will the district do with the money?
The revenue from the TRE will go directly to the schools maintenance and operations (M&O) budget. This means that it can be used for pretty much anything. Facilities are typically financed by bonds, and SAISD will have a $450 million bond on the ballot. What goes in those facilities, from teacher salaries to computers to curriculum improvements and expanded services, comes from the M&O budget.
Martinez laid out bold goals during his first year as superintendent of SAISD. He also spent the year coming to terms with the level of poverty in the district.
To achieve the goals laid out for the district, Martinez knew he would need more money. When it became evident that this was not coming from the State, the board decided to appeal to the community.
The money will immediately be spent on educational services beyond the school day and classroom technology. SAISD classrooms are ill equipped to introduce students to the problem solving tools and information technology of the 21st century. Radle explains that technological literacy is now part of education, just like verbal literacy. They want to invest in the kind of tech that will actually enhance tech literacy, not just teach the same skills through a fancier medium.
“It can’t just be a $2,000 screen that becomes a $2000 pencil,” Radle said.
Unlike their peers in more affluent homes, many SAISD students don’t use technology to enhance their education at home. They don’t have access to the same enrichment activities outside of school. The resources expand the vocabulary, problem solving skills, and worldview of their affluent peers, magnifying their classroom education.
SAISD wants to provide those opportunities, so that students can enter college and the workforce as competitors instead of playing catch-up. If a student is not familiar with the 21st century classroom or workplace, a college classroom or job interview may feel like an alien environment, populated by competitors who are perfectly at ease.
“Imagine how intimidating that would be,” Martinez said.
Try to think of a field that has not been touched by information technology. Try to think of a job that does not require the use of technology. Everything from dentistry to auto-repair is being influenced by increasingly automated “smart” tools. Martinez and the SAISD board are not proposing a constant race to stay ahead of the latest technology, but a commitment to relevance in education.
“We need (our students) to be prepared what is expected of them in the real world,” Radle said.
Top image: Elizabeth sits underneath the table in Ms. Smith’s classroom. Photo by Scott Ball.
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Please spell out in simple terms what SAID plans to do. What will we be asked to vote on? The article discusses why but not what we will vote on.
The author omitted one, but very critical, word in her article about seniors in San Antonio. “More than half of the tax base is over 65 and exempt from tax increases” should say “tax RATE increases. Seniors over 65 are NOT exempt from property VALUE increases. Their tax bills still go up, and Up, and UP.
Hi, Thanks for keeping me on my toes. In this case I did get my info from the Texas Comptroller’s handbook. Here’s the passage: “The tax ceiling provides that school taxes on a residence homestead will not increase above the amount of tax imposed in the first year the individual qualified for the ‘disabled or 65 years of age or older’ exemption on that homestead. As long as the homeowner who qualified for the exemption remains in that home and does not change the homestead, the school taxes on the homestead will not increase above the amount levied in the first year qualified.”
Hope that clears it up.
Sorry, I am a product of SAISD and a graduate of Jefferson Hi School. There are two major problems with SAISD. They have two former City of San Antonio Council members on the board. Their spend and then “we need more tax money” approach is all wrong. They have known for a while that taxes must be put to the Schools they are governing. Now they are behind and want to raise taxes to cover their mistakes. The area is not the same as it was when I was in school. The proposed increase in the first year is $260 and up to $500 on residents of a $200,000 home in the 4th year. These are figures with guestimates on property values by then. If the values keep rising every year it could be well above. Kick Radall and Garza out of there and get real representation.