Galveston ISD

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Galveston ISD

• Chapter 41
• Frequently Asked Questions

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What is Chapter 41?

• Chapter 41 (Robin Hood plan) is part of the Texas
  Education Code governing school funding.
• It was enacted by the Texas Legislature to
  equalize wealth for educational spending.
• Its intended to recapture or return local tax
  dollars from property rich districts and
  redistribute to property poor districts.

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Is GISD a Chapter 41 district?

• Yes, the districts property values have
  increased while student enrollment has declined
  making GISD into a Chapter 41 district.
• When the property value divided by the number of
  students (using weighted average daily attendance
  formula) exceeds 319,500 the district becomes
  Chapter 41.

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What happens now that GISD is Chapter 41?

• GISD will have to send any additional revenue to
  the state. Wealth is not determined by the
  income level of district residents or a
  districts tax rate.
• The Chapter 41 payment must come from the
  districts operating budget which also funds
  salaries, academic, extracurricular and
  co-curricular programs and other daily operations.

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What options are available to reduce wealth?

• (1) Consolidate with another district.
• (2) Detach property
• (3) Purchase attendance credits from state
• (4) Contract to educate nonresident students
  from a partner district
• (5) Consolidate tax bases with another district

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What options are GISD considering?

• Purchase attendance credits from state
• Contract to educate nonresident students from a
  partner district
• Both require voter approval.

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Why is GISD having an election?

• GISD is now a Chapter 41 district and is required
  by the state to hold an election allowing voters
  to approve options available to the Board to
  equalize its wealth.

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Why doesnt GISD just lower property values?

• The tax rate has no effect on a districts
  Chapter 41 status. Only the property values and
  number of students attending school are
  considered in the Chapter 41 formula.
• Local property values are determined by the
  Galveston Central Appraisal District. GISD has
  no authority to raise or lower property values.

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How will taking local control benefit GISD?

• By approving both propositions, GISD can make
  every effort to partner with a property-poor
  district.
• If no partners are willing to contract with GISD,
  then the district would send money directly to
  the state in the form of purchasing attendance
  credits.

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What is on the ballot?

• The Chapter 41 portion of the ballot will be
  printed to vote FOR or AGAINST two propositions
• Authorizing the Board of Trustees of GISD to
  purchase attendance credits from the state with
  local tax revenues
• Authorizing the Board of Trustees of GISD to
  educate students of other school districts with
  local tax revenues

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What does this mean?

• By voting FOR both propositions, GISD is able to
  send the money directly to the state or to
  another district, which can save the district up
  to five percent off the recapture payment
• By voting AGAINST both propositions, the state
  will decide which local property to detach to
  meet financial obligations of Robin Hood.

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GISD Chapter 41 CalculationsStep One Estimate
the Variables

• Weighted Average Daily Attendance 10,716
• 2005 Tax Value 3,590,576,480
• 2006-07 Tax Collections 53,629,417
• Final numbers received in February of 2006

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GISD Chapter 41 CalculationsStep Two Calculate
Wealth Per WADA

• 2006 Wealth Per WADA
• 2005 Tax Value/WADA
• 3,590,576,480/10,716 335,052
• (Statutory limit is 319,500)

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GISD Chapter 41 CalculationsStep Three
Calculate Excess Wealth

• Wealth the District May Keep
• WADA 319,500
• 10,716 (our WADA) 319,500 3,423,915,999
• Excess Wealth
• 2005 Tax Value Wealth the District May Keep
• 3,590,576,480 - 3,423,915,999
• 166,660,481

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GISD Chapter 41 CalculationsStep Four Calculate
Recapture Due

• Percent of Excess Wealth
• Excess Wealth / 2005 Tax Value
• 166,660,481 / 3,590,576,480
• 4.64
• Recapture Due
• 4.64 MO Tax Collections
• 2,489,267

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Election information

• Early voting begins Oct. 23 and continues through
  Nov. 3
• Election day is Tuesday, Nov. 7, 2006
• Polling sites are listed on the GISD web site at
  www.gisd.org and on the Galveston County Clerks
  Office Election web site at www.galvestonvotes.org