TAXING OUR TAXES!

Current state requirements for published tax notices force public school boards to make misleading pronouncements about available revenue. What’s left out of those notices is the state’s continuing “tax” on our local taxes!

Last week, when adopting our tax rate for 2017-18, the state’s required language for that adoption pronounces that our 2017-18 effective tax rate is effectively an 8.83 percent increase over the previous year.

But here are the facts:

  • The 8.83 percent referred to in the required language represents the growth of our local tax base, not a change in the actual tax rate.
  • Our actual tax rate is exactly the same as it was last year. In fact, that tax rate has not increased over the past decade. Thus, if a residence or business does not increase in value/appraisal, the same amount will be assessed this year as last.
  • Here’s the main point: As the local tax base grows, the state lowers the amount of school funding it provides. Required tax notices omit that extremely important fact! 
  • Pearland ISD will receive an estimated $3 million less in state funding this year as compared to last year.
  • Thus portraying our district as wallowing in 8 percent more revenue is highly misleading. That tax notice language comes from the same legislature using the increase in our local revenue to pay school funding bills!

This is less like Robin Hood and more like the Sheriff of Nottingham: Taxing  the locals to build the king’s coffers!

What is the net effect on these developments for Pearland ISD?

  • We predict a 2 percent increase in our expenditures for 2017-18. This is only possible because we get to “keep” about 5/8 of the revenue generated by the growth in our tax base. (The rest is offset by the drop in state revenue.)
  • We will also continue to earn revenue credit for increases in student enrollment.  We predict we’ll gain 300 to 400 students this coming year.
  • About 60 percent of our employees are enrolled in the TRS Health Care plan.  Premium spikes for those who have their families on that plan are greater than our forecasted 2 percent pay raise for 2017-18.
  • That 2 percent raise to employees will require us to dip into our carefully guarded savings for about half of it. Obviously, it is not wise to dip into savings for recurring costs over the long haul. This must be a temporary fix.
  • With yearly enrollment growth we need additional personnel. This is only partially compensated by the state revenue owed for such students.
  • Even though we just passed (November 2016) a $220 million bond election, the tax rate for 2017-18 will NOT be raised.  However, 2 years from now we do expect an increase geared toward  meeting those debt payments.
  • Meanwhile, in May of this year Texas Smart Schools again pronounces us a 5 Star District for financial efficiency and student performance.
  • A special session is now slated for July in which the legislature will consider an unfunded teacher raise mandate – and a cap on school property taxes.  Thus, the state appears poised to increase our expenses while hampering our ability to pay for mandates.

Blood out of a turnip. Bricks without straw.

Will Rogers said, “Be grateful we’re not getting all the government we’re paying for.”

Well, we’re getting all the regulatory government we can handle. But the money to pay for it is flowing in the wrong direction!

 

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