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2006-2007 Budget Update (September, 2006)

At the August regular meeting of the Board, trustees approved the 2006-2007 operating budget of $167.5 million, including an estimated $15.5 million recapture payment.

This budget is based on assessed taxable values of $11.2 billion an increase of almost $2 billion compared to last year. This new budget represents about a 21 percent increase in spending, which is commensurate with the 21 percent increase in student population (from 19,800 in October last year to about 24,000 this year).

In preparing for 2006-2007, 517 new employees (professional and support personnel) have been hired at this time to meet the needs of growth and the opening of 6 new schools, two of those being high schools.

The 2006-2007 budget includes $18.7 million in payroll for new personnel; $2.3 million for health insurance for new employees, along with TRS and medicare payments; $4.7 million for $2,500 in raises for all teachers, nurses, counselors and librarians ($500 of this is in payment to teachers, nurses, counselors and librarians to restore the $500 health benefit funding that had been taken away previously by the state and placed in a TRS pass-through account for reimbursement of health related expenses.); $547,000 is for the additional $500 for support staff to restore the same health benefit from last year; $1.27 million for an $800 step in pay increase for all returning teachers, nurses, counselors and librarians; and $1.32 million for a 4 percent of mid-point of salary scale increase for non-teaching employees. Returning teachers received the equivalent of more than a 6 percent of mid-point pay increase. Another $1.38 million ($275 per high school student) is to be allocated for purposes related to college readiness, advanced academics and high school success.

An additional $4.7 million increase is planned in non-payroll related operating costs to offset increases in utility and fuel charges.
To fund this budget, the Maintenance and Operations tax rate is projected to be $1.21 per $100 of assessed valuation. House Bill 1 impacts the M&O tax rate only. Most school districts in the state were at the M&O tax rate cap of $1.50, so they will be experiencing more tax relief – 17 cents of relief, down to $1.33. FISD’s current M&O tax rate is only at $1.32. In cases like FISD’s, districts must multiply their existing tax rate by approximately 88 percent, which will reduce its tax rate to $1.17. House Bill 1 then allows local district to add a four cent increase to maintain programs and handle growth, as in FISD’s case, or to reinstate programs, as in the case in districts that were at the tax cap. If the FISD Board approves the four cent increase as advertised the FISD 2006-2007 tax rate for M&O would be $1.21, eleven cents less than the current rate.
This tax rate would generate $133.8. Other tax income is anticipated at $7.5 million, which includes ag rollback tax collections, frozen tax values and penalty and interest income. Other income such as rental income and interest earned is estimated at $3.9 million. State funding is anticipated at $12.3 million.

FISD’s debt service commitment for 2006-2007 is estimated at $49.9 million. A tax rate of $.37 cents (it is currently $.31 cents) is anticipated. This would place the district’s projected overall tax rate at $1.58.

Below is a comparison of the estimated tax bill of a resident with a home valued at $230,937 (the 2005-2006 average home value in FISD).

2005-2006 Tax rate and taxes
Market Value               $230,937 - $15,000 Homestead Exemption    
Tax Rate                      $1.63/$100
Levy                             $3,519.77

2006-2007 Projected tax rate and taxes
Using average valued home not considering a raise in appraised value –
Home Value - $230,937 - $15,000 Homestead Exemption
Projected Tax Rate - $1.58/$100
Levy - $3,411.80

The new average home value in FISD is now $244,000.

Note: From what we know at this time, no provisions were made in this new legislation to modify the tax bill of our citizens over 65 years of age who have frozen taxes.