News

$730,912 from state to aid RISD funding balance

Won’t affect current tax rate or budget
By MIKE BROWN
Reporter Editor

The confusing, and sometimes confounding, series of formulas that are school finance laws in Texas have delivered some good news to the Rockdale ISD.

It’s getting some of its own tax money back from the state.

Marla Wallace, chief financial officer (CFO) told The Reporter the district has received $730,912 in a refund of Chapter 41 payments from the state.

Chapter 41 is the provision of the Texas Education Code that forces certain school districts to share their tax resources with other districts.

Even the Texas Education Agency’s ( TEA) website notes that sometimes Chapter 41 is referred to as the “Robin Hood”— take from the rich and give to the poor—plan.

The new funds, won’t bring any immediate tax relief for district taxpayers, nor will they reduce the $2,631,369 deficit in the new budget adopted this fall.

“Because this was received before the audit was completed, we have backdated it as a reduction in expenses for the 2012-13 school year, so it won’t affect this year’s deficit,” Wallace said.

RECAPTURE— She said, however, the money will increase the RISD’s fund balance.

That’s not an insignificant factor. A series of deficit budgets has reduced the district’s fund balance in previous years, something which causes nervousness among administrators dealing with school finances.

But Wallace pointed out if the district receives additional recapture funds from the state, because of the timing, they can be applied to reduce the current year’s deficit.

“But, as usual, we won’t know the timing of payments and/or refunds, until they are posted on the (state’s) payment ledger,” Wallace said.

For purposes of equalizing school finance under Chapter 41, the state views some districts as wealthy and makes them send some of their locally collected tax revenue to be distributed among “poor” school districts.

Those are known as “recaptures.”

But there’s a complex set of funding formulas that can result in the state sending funds back to school districts depending upon year-to-year variations.

In essence, a district sends tax money to the state, then gets some of its own tax money back.

DECREASE—Rockdale ISD saw a 10.6-percent decrease in taxable values at the Luminant Sandow 5 power plant over the past year.

Trustees had planned to increase the tax rate 3.68 cents, from $1.2384 to $1.2751.

But the board saved money in several areas, including refinancing bonds used to build the new intermediate school and expand the high school, and only raised the rate to $1.2534.

‘MYSTERY’—School board members discussed the recapture situation at length during budget and tax rate consideration this summer and fall.

Recapture funds were referred to as “mystery money” by the board on at least one occasion.

In 2012-13 the district got two infusions of “mystery money,” a $748,112 Chapter 41 refund and a $698,726 “prior year foundation settle-up,” Wallace said.


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