Tax Rate Explainer

  • In Texas, the majority of a public school district’s funding comes from the property taxes of businesses and residents who own property within the boundaries of that district. Unlike other taxing entities, a school district’s tax rate is divided into two separate buckets for separate, distinct purposes.

    One part of a school district’s total tax rate is called Maintenance & Operations, M&O for short, and the purpose for this tax rate is for operations – instruction, employee salaries, utilities, insurance, computers and other technology, supplies, transportation, security, and much more.

    The other part of a school district’s total tax rate is Interest & Sinking Fund (I&S), also called Debt Service. The revenue from this tax rate must be used to pay existing (bond) debt.

    Each year in September, the Ector County ISD Board of Trustees officially adopts a total tax rate, and since 2019, that total tax rate has remained the same at $1.17792 per $100 of a property’s taxable value.

    Since 2020, ECISD has made early payments of $37.3 million in existing bonds, and by prepayment and refinancing, eliminated $26.9 million in future interest payments. Based upon the district’s existing tax base, the district would not need to increase the total tax rate of $1.014 to pay the $436,109,000 of bond projects.