On August 14 our Ector County ISD Board of Trustees adopted a change to the local tax rate that requires voter approval. A Tax Ratification Election – or TRE – has been called for November 6. If passed by voters it will mean an increase in revenue for our school district and an increase in the amount of property taxes paid by the citizens of Ector County.
To understand the purpose of a Tax Ratification Election (TRE) we should start with an explanation of the tax rate.
In Texas, a school district’s tax rate is divided into two separate parts that fund different expenses. The illustration of two buckets is often used for this example:
The first bucket is called Maintenance & Operations or “M&O” for short. The money that comes from this bucket is used for the day-to-day operations of a district. Things like salaries & benefits, supplies, utilities, equipment, vehicles and more.
The second bucket is called Interest & Sinking Fund or “I&S.” You will also hear it referred to as “debt service.” The money from this bucket can only be used for payments on voter-approved bonds. Money from this bucket cannot be used for maintenance and operations.
The state’s public school funding system is made up of a series of complex formulas that take into account the tax rate our local school district establishes for our community. The higher the local M&O tax rate, the more dollars we receive from the state. These formulas include a “balancing” mechanism – and when our local appraisal values rise and our school district gets more money from local property taxes, the state reduces the amount of funding it sends to us.
For the 2017-18 school year ECISD’s M&O tax rate was $1.04 and the I&S tax rate was $0.11 for a total tax rate of $1.15 per each $100 of your home’s appraised value.
For the 2018-19 school year the school board adopted an M&O tax rate of $1.17, a slightly lower I&S tax rate of $0.10957, and a total tax rate of $1.27957.
Because the adopted M&O rate is above $1.04 an election will be held and voters must decide whether the $1.17 M&O rate stands or whether the M&O tax rate will be “rolled back” to $1.04.
If approved, the 13-cent increase in the M&O tax rate would mean an additional $18 million in local and state revenue for ECISD this year.
It would also mean an increase in property taxes of:
Appraised value $170,873 – average home in Ector County
Taxable value $110,406
$16.05 per month - it breaks down this way:
$ 4.09 per month due to increased appraised property value
$11.96 per month increase specifically from Proposition A
Of note: For residents 65 and older school taxes will not increase on their existing homestead property even if the tax rate goes up.
Why has ECISD adopted this higher tax rate?
Primarily due to lower “Oil and Gas” values, ECISD’s taxable assessed valuation dropped by more than $2.4 billion (17.5%) between 2014-15 and 2016-17. During that same period student enrollment increased to over 31,400 (2%). Today ECISD enrollment is more the 33,000 students.
ECISD took special action in 1988 to grant a 20% local optional exemption for all resident homesteads, which is in addition to the state-mandated homestead exemption of $25,000. The state formulas that determine how much funding ECISD receives penalize ECISD each year this exemption is granted. Legally, ECISD cannot repeal or reduce the local exemption at this time.
If approved by voters, what will ECISD do with the money?
A committee made up of a cross-section of community members began meeting in May and through the summer identified two areas of focus: salaries and safety.
- Because approximately 84% of the district’s budget is allocated for people, the bulk of the additional funds (approximately $9.8 million) will be used for raises for all employees.
- Additionally, $6.25 million would be used to pay insurance deductibles for repairs of roofs damaged by hailstorms in 2016 and 2017
- $1.5 million would be used to replace aging buses
- Approximately $500,000 would be spent on controlled-access for the main entrances of schools, and fencing for elementary schools.
Election Day is November 6. Early Voting begins on October 22
Voting Locations Listed HERE
Early Voting Locations and Information Listed HERE