Don’t panic when you read the required Rockdale ISD notice on the new school tax rate on page 7B of this Reporter.
It appears to indicate trustees are proposing a six-cent tax hike, from $1.36 to $1.42.
But school officials say that’s not the case, that the tax rate will actually go down a bit from its current $1.36.
What gives? A unique combination of deadlines, a brand-new, favorable, school finance bill and the final impact of losing values from the Luminant power plants.
DEADLINES—“This is the time of year when we are required by law to have a public meeting to discuss the budget and proposed tax rate,” Supt. Dr. Denise Monzingo told The Reporter. “We also have to publish the information on our tax rate calculations to date.”
The actual tax rate won’t be adopted until much later in the summer, perhaps as late as September.
And that’s after the rules get changed. The Texas Legislature has passed new school finance legislation which will supersede the current way budgets and tax rates are calculated and more than balance out the effect of the Luminant losses, she said.
The bill is expected to be signed by Gov. Greg Abbott.
“If nothing else changes, the tax rate should actually be lower,” Genella Korenek, Rockdale ISD chief financial officer (CFO) said.
NOT THE FIELD—
Why would calculations produce a possible six-cent tax increase current school finance system?
“I know many people would immediately think of the new Tiger Stadium,” Dr. Monzingo said. “But that has absolutely nothing to do with this.”
While the “it won’t happen” 6-cent tax increase is shown on the interest and sinking (INS) side of the budget, the new stadium was not built with bond money and doesn’t show up on the INS side at all.
Since the stadium was built in the same footprint as the old Tiger Field, it’s classified as “maintenance.” It’s essentially being funded over time through budget fund balances.
Why then would there be a revenue deficit on the INS side under the current school finance system?
Because RISD lacks the tax revenue it had been getting for many years from Luminant and it is still, of course, paying off the debt incurred in the 2007 bond election which built a new intermediate school, renovated and expanded the high school and provided for projects on the junior-high and elementary campuses.
LUMINANT—Values at Luminant’s Sandow 4 and 5 Power Plant units had plummeted prior to the shutdown in January, 2018, but were still as high as $290-million as late as 2016.
“What’s happened is we are finally catching up to the loss of Luminant,” Dr. Monzingo said. Luminant had been the RISD’s largest taxpayer after the Alcoa shutdown in 2008-9.
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