If last Tuesday’s election were a football game, Team Austin Independent School District would have spiked the ball with the numbers it put up in passing a $1.05 billion bond package: The bond, the largest ever approved by voters in Central Texas, won with 72 percent of the vote.
Superintendent Paul Cruz described the election as historic, saying “The winners are our students.” He is right. But the victory is not limited to students. Voters clearly understood that retooling schools for the 21st century benefits Austin’s economy, workforce, quality of life and civic institutions that rely on educated people.
Voters punctuated their support with their financial sacrifice: Higher property tax bills for years to come to pay off bonds.
For the median-priced Austin ISD home of $262,282 this year, the school district portion of the tax bill will rise to $3,345 in 2019, or by $219, assuming a 7-percent increase in taxable property value. That will grow to $3,579 in 2020.
Bills are rising because the district is keeping the tax rate the same, even as property values continue to go up. Austin ISD’s taxable property value projections are conservative, given that values rose about 12 percent each year on average for the past five years.
No one should underestimate the investment district residents are making; it comes at a high cost to people who are struggling to keep their heads above water in Austin’s hot housing market, its soaring property values and rising cost of living.
Nonetheless, voters by a wide margin said public schools are worth the sacrifice. We agree.
Passing the bonds means the district can take a giant step in modernizing schools that have an average age of 46 years. It means relieving overcrowding in certain areas of the district, fixing leaky roofs, replacing HVAC and drainage systems, and upgrading security. It means rebuilding and expanding many East Austin schools to help them attract students and fill empty seats. Investing tax dollars means Austin public schools can better compete with charter schools that are siphoning students and teachers.
Consider the potential impact to the Central Texas economy.
Austin-area residents are situated in a technological hub with companies, such as Apple, Google, Silicon Labs, HomeAway, Samsung and Dell – just to name a few – operating major campuses or headquarters in Austin. Central Texas’ health and medical sectors, which includes Dell Seton Medical Center at the University of Texas, Texas Oncology, St. David’s Medical Center and dozens of related health businesses, continue to balloon.
Yet, the Austin school district has been slow to capitalize on those opportunities for its students, teachers and community in large part because it is saddled with obsolete technology and run-down campuses that are costly to maintain.
Without up-to-date technology that can be refreshed every three to five years, as would happen under a timetable made possible with the bond package, schools are at a disadvantage in preparing students for the Central Texas workforce and global economy.
Modernizing classrooms to support technology, best teaching practices and energy savings also are part of the district’s strategy to improve student performance, retain teachers and put the district on an equal footing with the shiny new charter school campuses that have cropped up across Austin.
Certainly, maintaining the tax rate of about $1.08 cents per $100 of assessed property value is sensible. But the district can and should do more to address legitimate concerns of those who voted against the bonds, such as exploring options to lower tax bills.
We urge them to look at ways to transfer more maintenance and operations functions financed by the biggest side of the tax rate, called maintenance and operations, to the debt side that finances capital projects.
That could happen in the form of a tax swap that takes 2 pennies off the operations side and adds a half or full penny to the debt portion. That would lower tax bills. But it also would produce more money for the district because money generated by the debt tax rate is not subject to recapture, in which Austin surrenders hundreds of millions of dollars each year to the state under Texas’ school financing system.
Austin keeps just 24 percent of the revenue generated by the last two pennies of its tax rate, or about $5.4 million of the total $22.4 million. By contrast, $17 million goes to the state. That is because those pennies are subjected to a higher rate of recapture than the rest of the tax rate.
The key is thinking creatively and more broadly about what operations can be financed on the debt side without violating state laws that stipulate capital expenditures eligible for that category.
Another option needing more study is a tax swap with the city of Austin in which the school district would transfer certain functions to the city, which would increase its tax rate to cover those services, while the district would lower its rate.
In theory, it would mean lower tax bills for Austin ISD homeowners in the city because the city is not subject to state recapture. The city could tax at a lower rate than the school district to generate the money needed to pay for services it receives from Austin ISD in a swap.
Those ideas should be on the table. For now, Team Austin ISD — including teachers, parents, volunteers, business leaders and all of those who worked to pass the bond package — can take a victory lap.
But make it quick. There’s much more work to do in building schools and students for the 21st century.