FAQs Updated 10/29 - Golden Penny Election

When will the election take place?

The election will take place on Tuesday, Nov. 2. The last day to register to vote in this election is Monday, Oct. 4. The last day to apply for a ballot by mail is Friday, Oct. 22. Voting locations include:

• HPISD Administration Building, 7015 Westchester Dr.
• Armstrong Elementary School, 3600 Cornell Ave.
• Bradfield Elementary, 4300 Southern Ave.
• University Park Elementary, 3500 Lovers Lane
• McCulloch Intermediate/Highland Park Middle School, 3555 Granada Ave.

 

Is it accurate that HPISD is spending less on instructional costs, which include teacher salaries, now than it did in 2016?

No, it is not. HPISD’s audited financials, as reported to the state, include a breakdown of both classroom expenses (function 11) and enrollment.

YEAR	INSTRUCTIONAL COSTS	ENROLLMENT	INST. COSTS PER STUDENT
FY2016	$36.4MM	7,081 students	$5,140 per student
FY2020	$38.0MM	6,864 students	$5,536 per student

Despite losing 217 students during that period, HPISD added $1.6MM in general fund expenditures overall.  

I've heard that in the last five years our teacher costs have gone down while all other expenses have gone up. Is that true?  

HPISD has been made aware of a chart shared in the community which states that teacher costs have declined during the last five years. The teacher cost calculation appears to be extrapolated from a supplementary table in the district's audit but unfortunately does not give an accurate representation of the full picture.

HPISD general fund classroom instruction costs (the majority of which are classroom teachers) increased from $36.4MM to $38MM during the last five years – an increase of $1.6MM. This happened despite a decrease in enrollment of 217 students and a decrease in the total number of teachers as a result of decreased enrollment. This information can be found in Schedule C-3 of HPISD’s most recent audit.  

The chart that is circulating compares teacher costs vs. other “non-teacher expenditures” but leaves out important information. The chart used is from a supplementary table in the audit includes food service and safety/security costs which are, to a great extent, reimbursed by external organizations, such as the PTAs. It also includes a significant number of technology and maintenance costs related to COVID mitigation and the costs to open a 5th elementary while also bringing online significant additions at both the high school and middle school. Lastly, the chart includes bond expenditures for a number of departments.

What has been shared unfortunately portrays an inaccurate picture and skews the reality of how HPISD’s budget has been managed in recent years. Holding those areas (Technology, Food Services, Maintenance) aside, the $2.1MM increase in classroom (teaching) expenses (as shown below) accounts for 48% of the overall increase in this time period. Without holding those areas aside, instructional expenses still account for approximately 27% of the increase. 

For reference, below is the revised chart for all funds, or click here: 

Does HPISD spend proportionally more on educational delivery than other similar peer districts in Texas? 

Yes. Looking at the three best comparable districts (most similar in socio-economics and size), HPISD allocates more of its budget towards educational delivery than do peer districts. 

• HPISD has allocated 58.9% of its total budget, on average over the last three years, towards educational delivery, as compared to 53.0% in peer districts.
• HPISD has spent approximately 14% more on educational delivery per student, on average over the last three years, than have peer districts.

HPISD is able to allocate more dollars toward educational delivery, because it spends less on overall central administrative expenses, food services and transportation than do peer districts. Additionally, HPISD has additional dollars allocated towards educational delivery as a result of a restricted grant from the Moody Foundation that can be used only for the sole purpose of supporting the Moody Innovation Institute programs.

Does HPISD spend proportionately more on administrative staff expenses than other similar peer districts in Texas? 

No. Looking at the three Texas school districts that are most similar to HPISD in terms of size & demographics, HPISD has spent, on average over three years, less in total on administrative staff expenses (General Administration, School Leadership & Instructional Leadership) than peer districts. 

As a percent of total expenditures and on a per student basis, the district’s administrative staff expenses have been, on average over three years, approximately 25% more than peer districts.  At the same time, however, HPISD has had approximately 25% fewer students on average over three years as compared to peer districts. Because funding tied to student population size and with fewer students than peer districts, HPISD does not have the same economies of scale as its peers for certain district expenses which exist regardless of student population size (i.e., administrative staff expenses). Taking these factors into consideration, the district’s administrative staff expenses appear to be in line with peer districts. In addition, similar to teachers, the majority of HPISD administrators are compensated in the lowest 20% of their peers in similar positions in other school districts in North Texas

What is the exact ballot language?

 

The Texas Tax Code Section 26.08(b) requires specific statutory ballot language in an election to approve an adopted tax rate for a school district. The Texas Comptroller provides Form 50-863 to be used as a ballot template in a Voter-Approval Tax Rate Election. In order to legally comply with these statutory requirements, HPISD will use the following language on the ballot for the Golden Penny election: 

“Highland Park ISD Proposition A
Ratifying the ad valorem tax rate of $1.131 in Highland Park ISD for the current year, a rate that will result in an increase of 3.45 percent in maintenance and operations tax revenue for the district for the current year as compared to the preceding year, which is an additional $5,273,741.”

 

Why does the ballot language appear to be different than what has been presented by the district? I thought that the election was going to generate approximately $6.6 million with a net of $3.6 million, but the ballot only reflects $5.2 million?

 

The ballot is legally prescribed by the state and can be confusing. The required ballot language compares what the proposed tax, including the four golden pennies, will generate compared to the 2020-21 revenue budget. That revenue increase is projected to be $5.3 million for the 2021-22 budget relative to the 2020-21 budget, which is a 3.45% projected increase in the gross revenues year over year.

To be specific, the district calculations assume (a) growth in appraised property tax values of 3%, (b) a reduction in tax rate of 3.7% (before golden pennies) as required by the State’s tax compression formulas and (c) the addition of the 4 golden pennies. The tax revenue increase associated with golden pennies is $6.6 million, and the combination of increased property tax values and otherwise compressed tax rates reduces revenues by approximately $1.3 million. Thus, the total net increase in projected revenues is $5.3 million as reflected in the VATRE ballot.

Is HPISD Proposition A the only referendum on the ballot?

 

No. There are eight state constitutional amendments on the ballot, including changing eligibility requirements for judges, establishing a right for residents of certain facilities to designate an essential caregiver for in-person visitation, and providing an exemption on property taxes for surviving spouses of members of the U.S. armed forces who are killed in the line of duty. For more information, go to: https://www.dallascountyvotes.org/upcoming-election-information/ 

I do not understand the relationship between the Formula Transition Grant and the Golden Pennies. How much additional revenue will the 4 Golden Pennies bring to HPISD, and what is the impact?

 

In 2019, House Bill 3 updated the school funding formula for school districts. Per this new formula, the vast majority of districts in the state received more funding per student than they had previously received, but the new formula in House Bill 3 resulted in HPISD receiving less per student. To make up for the disparity, lawmakers provided a Formula Transition Grant of approximately $3 million per year for five years to HPISD and the few other districts also negatively impacted by the new formula. This grant will end after 2023-2024, or upon adoption of additional golden pennies on a dollar-for-dollar basis. 

Each golden penny is worth approximately $1.64 million in additional revenue for HPISD.  Therefore, four golden pennies are worth approximately $6.6 million in additional revenue for the district. This additional revenue, if approved by voters, will first reduce the revenue from the Formula Transition Grant and then generate an additional ~$3.6 million that will be used to increase staff compensation. Therefore, the net impact to HPISD is ~$3.6 million more revenue than it would otherwise receive.

 

How will the additional revenue from the Golden Pennies be used? How will taxpayers know how the additional revenue from the Golden Pennies is actually used?

 

The board has stated, both verbally and in writing in all district materials, that 100% of the ~$3.6 million of additional revenue (net of the Formula Transition Grant) from the Golden Pennies will be used for providing increased compensation for all HPISD staff members. 

A 1% increase in HPISD staff compensation requires approximately $500,000. Therefore, the ~$3.6 million resulting from the four golden pennies (net of the Formula Transition Grant) will provide revenue to allow for a 7% increase in staff compensation, on average. This 7% increase in staff compensation will continue into perpetuity, or until the Texas legislature changes school funding formulas again.      

Once approved, the district will be responsible for communicating and paying compensation increases to every staff member. The Board and the Finance Committee, which is made up of 3 board members and 6 community members, will be responsible for overseeing the use of these additional funds. Reporting on the district’s specific use of the additional revenue from the golden pennies will be made to the Finance Committee and the Board during a public meeting.

 

I have heard that HPISD’s revenues have been going up over recent years, but teacher salaries have not. Is this true? 

 

Property values have increased during the last few years, causing Dallas County to collect significantly more in taxes attributed to HPISD and other entities. Unfortunately, because of the State’s Recapture formula (aka “Robin Hood”), HPISD has only been able to keep a small amount of this additional revenue, leaving a net revenue increase of just 4.3% (from 2016 to 2021). However, as revenues increased, so has staff compensation. Since 2016 there have been three incremental salary raises and two distinct “one-time” payments made to staff. As a result, staff compensation is up over 6% while revenues are up 4% during that time. Despite these increases, the compensation adjustments have not been enough to remain competitive with salary increases provided by neighboring districts. The chart below shows more details on recent revenue trends over the past five years as well as compensation increases over the same time period.

	2016-17	2017-18	2018-19	2019-20	2020-21 (unaudited)
Tax Revenue	$140,636,408	$148,047,162	$155,423,513	$150,982,004	$154,227,188
State Revenue	$6,263,548	$5,201,932	$7,190,284	$8,873,299	$9,854,023
Recapture	$90,029,741	$96,834,257	$106,041,400	$100,511,018	$104,751,098
Net Formula Revenue	$56,870,215	$56,414,837	$56,572,397	$59,344,285	$59,330,113
Enrollment	7,044	6,991	6,801	6,864	6,840
Per Student	$8,074	$8,070	$8,318	$8,646	$8,674
Compensation Increases	2%	$500-$1,000 one time from district	1%, plus $500-$1,000 one time from Clements Grant	3%, plus $1,250-2,500 one time from district	$250-500 one time from HP Education Foundation

 

How long will the 4 golden pennies last?

If approved, the 4 golden pennies will be accessed in perpetuity or until the Texas Legislature changes the school funding formula.  The resulting increase in staff compensation from the 4 golden pennies will continue for as long as we have the 4 golden pennies.  

 

What is the choice that the taxpayer has in this election?

 

• The election is for Highland Park ISD Proposition A which will set this school year’s tax rate. A vote for the Proposition would be in favor of setting the tax rate at $1.131; A vote against the Proposition would be in favor of setting the tax rate at $1.091. Both options would reduce HPISD’s tax rate to a 5-year low. The tax rate during the 2020-21 school year was $1.1519.
  
  
• The election would authorize the use of 4 additional “golden pennies” (which are not subject to the state’s Recapture formula) within the tax rate.
  
  
• A majority vote for the golden pennies will decrease the tax rate by 2.1 cents per $100 of assessed property value and will generate a net of approximately $3.6 million, all of which would be directed toward staff compensation.
  
  
• A majority vote against the golden pennies will decrease the tax rate by 6.1 cents per $100 of assessed property value.

 

 

What is the tax impact?

 

• The tax rate difference between the two options (2.1 cent decrease vs. 6.1 cent decrease) is projected to be $310 annually on a home with a taxable value of $1 million. The total annual decrease in 2021 tax bills will be dependent upon individuals’ property value growth.
  
  
• Property owners 65 and older, who have a homestead tax ceiling, would experience no change to their taxes due to the election, regardless of the outcome.

 

 

How did House Bill 3 impact school funding and staff compensation in HPISD?

 

• The state’s school funding formula, which causes approximately 66 cents of every local property tax dollar to be recaptured by the state, has historically made it difficult to provide increases in compensation at the same pace as other North Texas school districts. A landmark school funding law (House Bill 3, aka "HB3") passed by the Texas Legislature in 2019 increased school funding for all districts statewide, but HPISD received less as a percentage. While HPISD gave the largest salary increase in 11 years to teachers and staff in 2019 (3% salary increase plus a one-time payment of up to $2,500), the district has not been able to keep pace with the increases in staff compensation, at all levels, that other North Texas school districts have been able to offer.

• HPISD’s average teacher salary now ranks 24th out of 25 comparison districts in North Texas and will likely fall further behind for the coming year.

• Additionally, HPISD is scheduled to lose approximately $3 million annually in state funding after 2023-2024, which will further impact funding disparities.

 

 

Did House Bill 3 provide HPISD any relief?

 

• House Bill 3 allocated more state-level funding towards education and, in turn, compressed local property tax rates. HPISD’s M&O rate was $1.04 prior to HB3 and has since been compressed to $0.97 in 19-20, $0.9564 in 20-21 and will compress to $0.9210 in 21-22 (not taking the possibility of the 4 golden pennies into account).

• At the same time, HB 3 has given HPISD voters local control by providing the opportunity to access up to four golden pennies in additional tax revenue that, if approved by voters, will be directed toward staff compensation. Voter approval of the proposition would still decrease HPISD’s tax rate by 2.1 cents, which would be the lowest tax rate in five years.

 

 

What budget cuts has the district considered before coming to the community for additional tax dollars?

 

The district has cut more than $750,000 out of its operating budget for this school year, but that has not allowed for any meaningful compensation increases for staff. A 1% increase in compensation costs approximately $500,000. To provide a 3 percent increase would cost approximately $1.5 million. Since nearly 86% of the district’s budget is directed toward staff compensation, the only real place to reduce the budget would be to cut staff. Cutting staff means cutting programs, and to generate any significant amount for a staff increase, it would be necessary to eliminate multiple positions.

 

ALTERNATIVE SOLUTIONS

Is it possible to use $361 million raised by the bond election back in 2015?

Unfortunately, no. The state’s school funding laws strictly prohibit dollars raised through a bond election to go toward anything that is not related to the construction or renovation of facilities. Bond funds cannot be used to pay for classroom teachers or personnel.  Consistent with the plan approved by the voters in 2015, all of the funds raised by issuing those bonds have been and will continue to be used for land purchases and construction at each of the district's seven campus locations.

 

Why can’t our privately fund-raised dollars go to increase staff salaries?

 

HPISD is very fortunate to have a community that has raised $7.7 million to support the school district just during the 2020-21 school year alone. The annual funding raised by community groups, such as the Highland Park Education Foundation, Mad for Plaid, La Fiesta, Sports Club, PTAs/PTOs, Dads Clubs and other groups support ongoing education in HPISD and is already directed toward current levels of staff compensation, current programs, and supplies. Just to maintain current staff compensation levels, the same level of annual private funding will continue to be necessary in the years ahead. To increase staff compensation levels using private dollars, the level of private funding in HPISD would have to greatly increase on an ongoing, annual basis.

 

BUDGET

Why does the district not have funds needed to pay teachers more competitively if other districts in North Texas do?

 

The State of Texas distributes funds to school districts through a formula that provides added weights for students who meet certain eligibility criteria. The majority of HPISD students do not qualify for the additional funding because much of it is directed to assist students from low-income households and other at-risk populations. For that reason, most school districts receive more funding per child than HPISD. This makes it especially difficult for HPISD to offer competitive compensation for its staff. Additionally, many neighboring districts with a lower recapture rate have already accessed the maximum number of golden pennies in previous years, which has afforded those districts the ability to increase compensation more than HPISD. 

 

Why is more funding needed? Isn’t enrollment dropping?

 

Even if enrollment had been flat for the last five years, HPISD would still need additional funding to be able to provide commensurate staff compensation increases, so as not to lose ground compared to neighboring districts in the aftermath of House Bill 3.

 

If Proposition A is approved, will that prevent the need for PTAs/PTOs, Mad for Plaid and other private fundraising?

 

Unfortunately, no. The additional revenue that would be generated by accessing the golden pennies will only go so far. Since HPISD receives less money per student from the state than most school districts, it will continue to lag behind what other school districts are able to allocate to teacher and staff salaries without those additional private gifts.

 

How will this impact property tax owners 65 and older?

 

Property owners 65 and older, who have a homestead tax ceiling, would experience no change to their taxes due to the election.

 

BUDGET COMPARISONS

Is compensation for HPISD’s central administrators below the median compared to other North Texas Districts?

 

Yes. Excluding the superintendent, HPISD’s top five central administrative positions are paid in the lowest 30% of area school districts, with most of those positions being in the bottom 20%.

 

Does HPISD spend proportionately more on attorney’s fees than other similar peer districts in Texas?

 

HPISD averages about $350,000 per year in attorneys’ fees, which is not out of line with similar districts. If the district’s legal expenses suddenly dropped to $0, the savings would generate less than a 1% salary increase for staff.

 

Does HPISD employ proportionately more staff than other similar peer districts in Texas?

 

No. Looking at our best comparable district in North Texas that reports on staff count, HPISD does not appear to be over-staffed.

• HPISD’s total employee to student ratio is 11.9%, compared to 14.6% in peer district
• HPISD’s student to teacher ratio is 15.4:1, compared to 14.8:1 in peer district
• HPISD’s ratio of Central & Campus Administration per student is 0.31%, compared to 0.52% in peer district
• HPISD’s ratio of educational delivery support staff per teacher ratio is 42.4%, compared to 51.9% in peer district

 

 

PROCESS

 

Why did the board put this up to a vote this year? Has this been a quick decision made without community input?

 

No. The possibility of raising additional revenue to increase staff compensation in HPISD has been discussed internally for years but, up until the passage of HB3 (a sweeping and historic school funding law passed by Texas lawmakers in 2019), most of the revenue generated by a tax ratification election would have gone back to the state. Thanks to HB3, school districts like HPISD are able to hold a voter-approval tax rate election (VATRE) to add “golden pennies” to HPISD’s tax rate, with all additional funds generated from the additional “golden pennies” remaining in HPISD and not subject to a recapture rate at 66%.

The district’s Finance Committee has been reviewing this option since the passage of HB3 in 2019. Two years ago, there was insufficient information and time to consider bringing this forward to the community for a vote. During 2020, responding to the changing landscape resulting from the COVID-19 pandemic made consideration of a VATRE unfeasible.   Now, in 2021, the district is at a point where it can provide comprehensive information to voters to be able to make an informed decision. The district’s Finance Committee has been discussing the merits of a VATRE for several months. In order to put the issue on the ballot in November for voters to decide in compliance with Texas election law, the HPISD Board of Trustees had to call for the election no later than August 16. Ultimately, however, the voters will have the final say on this issue this fall.

 

What was the timeline for this election?

 

The district’s Finance Committee has discussed the potential benefits of seeking voter approval to access additional “golden pennies” (not subject to recapture) since 2019. At that time, the board was also briefed in a public work session on the possibilities afforded by the state legislature’s passage of HB3. The board received an updated report on the possibility of a VATRE (voter-approval tax ratification election—or “golden penny election”) on July 13, 2021.

The district’s Finance Committee approved its recommendation for this election and submitted its recommendation to the board in July 2021. The board then had a public work session on August 3, 2021, to discuss more details about the recommendation to hold the election. On August 16, 2021, the board called for an election to let voters decide whether to access four additional golden pennies. This type of election can only be held on the first Tuesday in November, making the only possible election date on Tuesday, November 2, 2021. An election in May on setting a tax rate is not an option.