How does a Penny Swap result in more state funding?
The State guarantees every school district the same amount of revenue that Austin ISD raises with a penny of M&O Tax Rate up to $1.06. By not accessing the additional M&O pennies, the District is not receiving and not benefiting from available state funding.
The state also guarantees a specific amount of funding per student for each cent of tax effort for both M&O and Debt Service pennies. By moving the 2-cents from Debt Service to M&O, we are able to benefit from the higher amount of funding per student the state provides. Currently, the Debt Service pennies are worth $35 per student (.29 per $100 valuation), while the M&O pennies are worth $99.41 per student ($1.06 per $100 valuation). So, by moving two pennies from the Debt Service Fund to the Maintenance & Operations Fund the District will keep the overall total tax rate (M&O + Debt Service) the same but will yield much more money for the District’s maintenance and operations.