No Tax Hike Stressed by Board
By Will Johnson
CROCKETT – The Crockett Independent School District (CISD) Board of Trustees met in a called meeting on Thursday, May 16 to discuss calling for a Tax Ratification Election (TRE).
According to the Texas Association of School Boards, a TRE is a special election, called by a school district’s board of trustees, asking the voters to approve a tax rate that is above the current $1.04 maintenance and operations (M&O) tax rate allowed by state law.
As the meeting got underway, a public hearing was held on the 2019-2020 tax rate during which CISD Superintendent Terry Myers gave a power point presentation concerning a TRE.
“We are actually looking at the tax rollback election as a way to maximize district funding. We are not interested in raising taxes. The board has given me strict orders to step out and let everyone know this is not about a tax increase,” the superintendent said.
If what is happening at the state level concerning school funding was to continue and the TRE was to pass, Myers explained, “… this give us the opportunity to manipulate our I&S (interest and sinking) and M&O pennies and this district will not need to raise taxes, hopefully, anytime in the near future.”
Myers re-iterated this was about maximizing the money CISD received from the state and indicated by not taking advantage of a TRE, the district was leaving roughly $250,000 in the state coffers.
The current CISD tax rate is $1.25 per $100 of property valuation, comprised of $1.04 on the M&O side and $0.21 on the I&S side.
“This will allow us to swap pennies from the I&S side, about 13 pennies, to the M&O side which would result in the $250,000 – per year,” he said.
As he continued, the superintendent provided a brief summary about what the M&O and I&S actually are. He explained the M&O side was basically for the day-to-day operations of the district while the I&S was the repayment of any bonded indebtedness the district might owe.
Currently, state law has the M&O rate capped at $1.04, but “… the TRE gives us the ability to move the M&O tax rate to $1.17.”
Before moving on, Myers stressed if the TRE were to pass, the tax rate would stay at the current overall rate of $1.25, but the breakdown would change from $1.04 to $1.17 on the M&O tax rate while the I&S tax rate would decrease from $0.21 to $0.08. As a result, the overall tax rate would stay at the same $1.25 currently in place in the district.
The superintendent next explained why this would be an ideal time to look at a TRE.
“If the state follows through with House Bill (HB) 3, which they say they are going to, there is going to be an influx of money in the school districts – new money which we haven’t seen before – and it will give us the opportunity to raise salaries and improve the quality of education. If the TRE passes, it will give the board the ability to manipulate the tax rates on both sides of this budget, thereby maximizing the funding which comes in from our local and state earned dollars,” he said.
“That’s what we are trying to do here. We’re not trying to change anything. We’re not talking out of both sides of our mouth. That’s not what we do here. This board can be trusted,” Myers asserted.
Board Secretary Dr. John Garner added if the TRE passed it would not affect the repayment of the school district’s indebtedness and it would actually help the district’s bond rating.
Myers further explained when the I&S rate is set at the current rate of $0.21, all $0.21 must go to paying off the debt. However, if the funds are shifted to the M&O side, monies left over could be put back into the district’s indebtedness. In addition, monies from the general fund could also be used to help cover the debt payments, if needed.
The superintendent also said he would be willing to speak to any local groups in CISD in order to help them fully understand the TRE m and what it meant to the community.
Once Myers concluded, a motion was approved to increase the M&O tax rate to $1.17. A second motion was also approved to set the I&S rate at $0.21.
The superintendent explained – by state law – the district was required to keep the I&S rate at $0.21 until after the TRE was held. Then, provided it passed, the $0.13 would be subtracted from the $0.21 to make the new I&S rate $0.08.
The board also passed a resolution to set the overall tax rate at $1.38 but also passed a resolution pledging to lower the I&S if the TRE is passed.
Before moving forward, the superintendent read the resolution which stated in part:
Whereas, the board has chosen to seek approval from the voters of the district to enable this increase and to generate additional state funding for the district resulting in an overall tax rate of $1.38, which is $0.13 higher than the current tax rate of $1.25; and
Whereas, the district is in a financial position to lower the I$S tax rate, reducing the overall tax rate from $1.38 back to its current rate of $1.25, offsetting the increase in the M&O tax rate; and
Whereas, the board of trustees wishes to convey to its taxpayers that approval of the TRE will result in the decrease of the I&S tax rate and a pledge for an overall tax rate that is no greater than $1.25 for the current year.
Now, therefore, be it resolved by the board of trustees of Crockett ISD, that:
Approval of the upcoming TRE on June 20, 2019 will result in an increase in the M&O tax rate of $0.13; however, the I&S tax rate will be reduced by $0.13, resulting in the same overall tax rate of $1.25 for the current year.
Following the reading of the resolution, a motion was made, seconded and approved to call for a TRE on June 20.
Will Johnson may be reached via e-mail at email@example.com.