Telling the Financial Story of GCISD

What if you were offered an investment opportunity that would yield almost $50 for every $1 invested? That’s exactly how M. Ray Perryman, noted economist of The Perryman Group sees the value of public education in Texas, citing that the long-term return per dollar of incremental state investment in education is $49.69 in additional spending throughout the economy. In his article, Perryman also notes that the future prosperity, both for individuals and for society, depends on education.

Grapevine-Colleyville ISD also sees the value of public education through investing in current and future students. In fact, in May 2016, community members made an investment in the future by passing a bond election that will impact every student and every teacher in this district. Voters approved a 12.81 increase in the Interest & Sinking (I&S) tax rate. As a result of a secured lower interest rate and an increase in property values, the actual I&S tax increase for these bonds will be 7.66 cents, which is 5.15 cents less than approved. By securing a 2.8 percent interest rate, projections show that over the 25-year repayment period, GCISD taxpayers will pay $84.9 million less in interest costs than what was originally projected for the 2016 bond program.

While the district is able to use I&S tax dollars to pay for voter-approved bonds for capital improvement projects, the daily operation of the district is covered by the Maintenance & Operations (M&O) budget. Eighty-seven percent of the M&O budget is used to pay our employees. I&S funds cannot be used for salaries. Therefore, there are two different tax rates: M&O and I&S. We know this is confusing, so to help better understand the difference between the two rates and what the funds can be used for, click here.

Property owners in GCISD saw their 2017 property values increase, along with others in Tarrant County; however, the district’s M&O tax rate will remain the same at $1.04, which has not increased since 2007. Including the I&S tax rate, the actual total 2017 tax rate is $1.3967, which is lower than the total tax rate of $1.70 in 2005.

During the 79th Legislative session in 2006, the State lowered the maximum M&O tax rate to $1.04. Over the past 10 years, the district has operated with the same tax rate, while still progressing into 21st century learning with digital classrooms, college and career readiness and a variety of extracurricular offerings.

The way in which school districts are funded is different than municipalities and other taxing entities. The current school funding system does not allow school districts to capture the full benefit from increased property values. When the tax revenues increase, the amount of state funding decreases.

Additionally, GCISD is considered a property-wealthy district and must send a recapture (or “Robin Hood”) payment to the State every year. In 2017-2018 the district estimates this payment will be approximately $44 million, an increase of $13.3 million from the 2016-2017 school year. So while the district receives an increase in tax collections from higher property values this year, it will be used to make the recapture payment.

Since the state made significant funding cuts to public education in 2011, rather than cutting programs for students, the district has adopted a deficit budget each year and covered that deficit by strong financial management and fund balance. The presence of a fund balance has allowed the district to keep our outstanding programs for all students.

District leaders demonstrate financial responsibility when determining how each penny will be spent in GCISD, and the reduction in a tax rate, even by one cent, will have a significant negative financial impact on the budget.

“We continue to be thankful that our parents and community members see the value in their investment in the students and staff of Grapevine-Colleyville ISD,” said Dr. Robin Ryan, GCISD Superintendent. “We understand that the funding of public education can be confusing, and we want parents and community members to know that if you have unanswered questions, we would like you to submit them through Let’s Talk! so that a district administrator can find you the necessary answers.”

In Summary:

  • “Every $1 invested in education returns $49.69 to the economy”….M. Ray Perryman
  • The M&O tax rate for GCISD has remained the same since 2007.
  • Although, the GCISD community approved a 12.81 cent increase in the Interest & Sinking tax rate for the 2016 Bond program, the actual increase will be 7.66 cents.
  • There are two different categories of tax rates for school districts: 1) Maintenance & Operations (M&O) for the daily operations of the district, including payroll. 2) Interest & Sinking (I&S) for capital improvement projects (cannot be used for payroll)
  • For Texas school districts, when property values increase, state funding decreases.
  • The GCISD “Robin Hood” payment is projected to be $44 million for the 2017-2018 school year. The significant increase is due to increases in property values for 2016.