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Town Hall on Budget & Taxes

Town Hall on Budget & Taxes. March 26, 2019 Turner High School Auditorium. Topics of Discussion. How Pearland ISD develops the annual budget Where the District’s revenues come from, including: Impact of property values and tax rate Current State funding elements

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Town Hall on Budget & Taxes

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  1. Town Hall onBudget & Taxes March 26, 2019 Turner High School Auditorium

  2. Topics of Discussion • How Pearland ISD develops the annual budget • Where the District’s revenues come from, including: • Impact of property values and tax rate • Current State funding elements • Impact of enrollment and attendance on funding • How a citizen’s property tax bill is calculated • How the District spends its funds • 2019-2021 Legislative Process Overview PEARLAND INDEPENDENT SCHOOL DISTRICT

  3. Budget Process Overview PEARLAND INDEPENDENT SCHOOL DISTRICT

  4. Budget Timeline PEARLAND INDEPENDENT SCHOOL DISTRICT

  5. General Operating FundRevenues PEARLAND INDEPENDENT SCHOOL DISTRICT

  6. Information Required to Prepare Revenue Assumptions • School Finance Law/Legislative Outcome • Enrollment Projections • Student Demographics • Attendance Rates • Taxable Property Values • Tax Rate • Tax Collections • Other Relevant Factors PEARLAND INDEPENDENT SCHOOL DISTRICT

  7. 2019-2020 Projected PEARLAND INDEPENDENT SCHOOL DISTRICT

  8. PEARLAND INDEPENDENT SCHOOL DISTRICT

  9. Average Daily Attendance (ADA) & Weighted Average Daily Attendance (WADA)Last 10 Fiscal Years * FY 19-20 is based on projections; the spike on WADA during 17-18 and 18-19 was caused by an increase on ADA reported for Free & Reduced student counts due to full enrollment coded during September and October 2017 due to Harvey. PEARLAND INDEPENDENT SCHOOL DISTRICT

  10. *18-19 Actual as of February 2019 *19-20 Estimates have not been prepared by the County PEARLAND INDEPENDENT SCHOOL DISTRICT

  11. Breakdown of Local Property Taxes • Over 46% of the District’s revenue comes from its local citizens through property taxes • The tax rate is comprised of two parts – Maintenance and Operations (M&O) and Interest and Sinking (I&S) PEARLAND INDEPENDENT SCHOOL DISTRICT

  12. Tax Rate (Per $100 Valuation) PEARLAND INDEPENDENT SCHOOL DISTRICT

  13. *Includes Current Year, Prior Year, Delinquent, and Penalty and Interest. PEARLAND INDEPENDENT SCHOOL DISTRICT

  14. General Operating Fund Revenue Projection$166 Million based on Current Funding Formulas Fiscal Year 2019-2020 projections are based on an M&O tax rate decrease from $1.06 to $1.04, which reduces local property tax revenue albeit an increase in property values and also decreases State funding. State funding also decreases due to a slight decrease in enrollment and a loss of State Compensatory Education (SCE) counts generated during Hurricane Harvey when all students were coded as “Free & Reduced”. PEARLAND INDEPENDENT SCHOOL DISTRICT

  15. Local vs. State Share of Basic Allotment PEARLAND INDEPENDENT SCHOOL DISTRICT

  16. General Operating FundExpenditures PEARLAND INDEPENDENT SCHOOL DISTRICT

  17. Information Required to Prepare Expenditure Assumptions • Revenue Levels • Legislative Mandates • District Initiatives • Prioritized Needs • Staffing Formulas & Needs • Salary Increases • Benefit Contributions • Other Relevant Factors PEARLAND INDEPENDENT SCHOOL DISTRICT

  18. How Much Money is Distributed to Each Campus? Student Enrollment & Staffing • The number of students projected to enroll in the fall determines the number of teachers and support staff that each school receives. • That is, enrollment translates into staff positions, which translates into salaries and benefits. School Operating Budgets – The money each campus receives for supplies, equipment, and other operating expenses are allocated on a per-pupil basis. Staffing is not paid from campus budget allocations. PEARLAND INDEPENDENT SCHOOL DISTRICT

  19. Budget Breakdown by ObjectFiscal Year 2018-2019$176.9 Million PEARLAND INDEPENDENT SCHOOL DISTRICT

  20. How is the General Operating Fund Allocated?Fiscal Year 2018-2019$176.9 Million PEARLAND INDEPENDENT SCHOOL DISTRICT

  21. District & State-Wide Comparison of Budgeted Operating ExpendituresFiscal Year 2018-2019 Source of State Percentages: TEA 2018-2019 Budgeted Financial Data PEARLAND INDEPENDENT SCHOOL DISTRICT

  22. General Operating Fund Summary &Estimated Days in Fund BalanceFiscal Year 2019-2020 Projections (in Millions) Fiscal Year 2019-2020 revenue projections are based on current funding law; projected expenditures are held at current fiscal year levels, with no salary increases and without restoring prior year budget cuts. The $10.9 million deficit is due in large part to reverting the M&O tax rate from $1.06 to $1.04, a slight decrease in enrollment coupled with a conservative growth in property values, and a loss of the additional revenue generated through the SCE counts during Hurricane Harvey. PEARLAND INDEPENDENT SCHOOL DISTRICT

  23. Effect of an Increase to the M&O Tax RateFiscal Year 2019-2020 (Estimated) Notes: • Each cent raised in taxes generates $780,000 in local funds and $1.96 million in State funds (up to $3.92 million in State funds, for a maximum of two additional cents). • Each cent increase beyond an M&O rate of $1.06 generates an additional $72,000 in State funding. • The annual cost of each cent beyond $1.04 for a taxpayer with an average appraised home value of $263,087 is $23.81. PEARLAND INDEPENDENT SCHOOL DISTRICT

  24. Surrounding Area School DistrictTax Rates for Fiscal Year 2018-2019 PEARLAND INDEPENDENT SCHOOL DISTRICT

  25. Debt Service Fund The Debt Service Fund is used to pay the principal and interest on bonds that we issue to finance construction, renovations, and other capital improvements. PEARLAND INDEPENDENT SCHOOL DISTRICT

  26. Debt Service Requirements PEARLAND INDEPENDENT SCHOOL DISTRICT

  27. Debt Service Fund Tax Rateto Meet Debt Service Requirements PEARLAND INDEPENDENT SCHOOL DISTRICT

  28. Calculation of Property Tax Bill PEARLAND INDEPENDENT SCHOOL DISTRICT

  29. How is Your Property Tax Bill Calculated?Based on Tax Year 2018 Average Market Value of Residences M&O $2,523.72 I&S $846.64 Pearland ISD grants the state-required $25,000 homestead exemption for all homeowners that apply to the appraisal district for that exemption. Homeowners who are disabled or age 65 or older are entitled by state law to an additional $10,000 exemption. PEARLAND INDEPENDENT SCHOOL DISTRICT

  30. Thank You! Pearland ISD Business Office www.pearlandisd.org/transparency Follow us on Twitter @PearlandBIZ PEARLAND INDEPENDENT SCHOOL DISTRICT

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