Burnet Consolidated ISD

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District » Tax Rate Swap and Drop

Tax Rate Swap and Drop

For the first time in the District’s history, Burnet CISD will be sending property taxes generated in Burnet CISD to the State as part of the “Robin Hood” school finance plan. The District is projecting that this recapture payment will be $350,000 for the 2018-2019 school year. These are funds that will not be available to support innovative programs and initiatives, teacher pay raises or school safety initiatives in Burnet CISD, but will instead be redistributed to other Texas school districts.

Burnet CISD is exploring an upcoming plan to generate additional revenue for the District that won’t be subject to “Robin Hood” while also lowering taxpayers' overall tax rate – it's called a Tax Rate Swap & Drop.
Texas school districts’ tax rates are broken up into two separate rates – an Interest and Sinking (I&S) rate that funds the payment of debt from bonds that are used to build and maintain school buildings, and Maintenance and Operations (M&O) rate that funds everything else including programming, teacher salaries, and utilities. The M&O rate is currently capped at $1.04 per $100 property valuation, but can be raised with the community's approval. This is done through a Tax Ratification Election.

If the community passes a Tax Ratification Election, Burnet CISD could raise the M&O rate by $0.02, but would also be in position to lower the I&S rate by $0.03 due to higher valuations and fiscally responsible refinancing over the years. This would lower the overall tax rate from $1.28 to $1.27, while providing Burnet CISD with $545,000 in additional operating revenue that could not be recaptured by the state though “Robin Hood”. That's more money for your schools while lowering your overall tax rate.
Please review the Frequently Asked Questions below:
Frequently Asked Questions
Q: How much money will BCISD have to send to TEA as part of Robin Hood plan in 2018-2019?
A: $500,000
Q: How much money will BCISD have to send to TEA as part of Robin Hood plan in 2019-2020?
A: $2.2 million
Q: What is special about the 2 additional cents or "golden pennies"?
A: The additional two cents are not eligible to recapture as part of the law to provide significant Local Control of the District’s tax rate to the Board and the District’s tax payers.
Q: How much money will be generated by the 2 golden pennies?
A: $600,000 of which ALL stays in Burnet CISD.
Q: If approved, what will the district’s tax rate be? And then what will it be next year?
A: The total tax rate for 18-19 would be $1.26, which is two cents less than this year’s rate. The projected tax rate for the next year would be $1.27. There will not be an increase because the District has forecasted future payments out 10 years and no rate increase will be required to service the District's debt.
Q: What happens when a new bond has to be issued for future growth?
A: The bond payment schedule is set up so a significant amount of capacity becomes available in 2020 and then again in 2023. In those years a bond could be passed, if needed, without an increase to the tax rate.
Q: Why not just lower the I&S rate without increasing the M&O rate by 2 cents?
A: The 2 cent increase generates an additional $600,000 for the Burnet CISD General Fund and will help to offset the loss of $500,000 due to recapture. All of the funds generated by the additional two cents will remain in the District. This increase of revenue will facilitate the continuation of teacher pay raises, support the district's school safety initiatives and innovative educational programs.