For 6th consecutive year, Pflugerville ISD keeps tax rate the same

Despite the Pflugerville ISD tax rate remaining the same for the sixth year in a row, residents can expect their taxes to increase by about $300 per year for a homeowner with an average price home of $200,000.

Trustees approved Thursday night by a vote of 5-2 to keep the tax rate at $1.54. This rate is made up of two portions: $1.04 for the Maintenance & Operation rate and $0.50 for the Interest & Sinking rate that pays down the district’s debt.

Trustees Rob Reyes and Tony Hanson were the two dissenters on the vote to keep the debt service tax rate the same. Both had supported lowering the rate by 2 cents.

Despite a steady rate, the district’s overall property values have increased by $1.4 billion in the last year, leading to higher taxes, PfISD Chief Financial Officer Kenneth Adix said.

Debate over paying down debt

PfISD has nine outstanding bonds totaling $455 million, or about $689 million including interest. Adix said the district has been trying to pay down bonds sooner in 15 years instead of 25 years—a process known as defeasance—in an effort to save interest and improve the district’s bond rating.

The district also needs to prepare for a 2019 bond referendum that could total about $300 million. From 2013-19, Adix said the district will have paid off, or defeased, $176 million in debt.

If the board lowered the tax rate by 2 cents, it would have saved a homeowner with an average valued home of $200,000 about $40 per year.

At that rate, however, Adix said the district would not have enough bond capacity to seek a $300 million bond and pay it off in 15 years. To pay off the $300 million bond, Adix said the board would have needed to increase the I&S tax rate by about 3 cents.

Trustees debated lowering the rate by 2 cents. Reyes said the district should have lowered the tax rate because it will need to ask voters for money in the future. He cited Round Rock ISD’s failed bonds earlier in 2017 as an example.

“We’re in danger of not being able to pass our bond if we don’t act and show some consideration through good faith,” he said.

However, trustee Carol Fletcher said PfISD residents’ taxes will still go up regardless if the district lowers the rate by 2 cents and the savings isn’t enough to warrant the tax reduction.

“The tradeoff between those 2 cents and the long-term implications for spending more money than we need to on our debt, … for me, psychologically, the idea of spending millions more than I have to for a feel-good, short-term two-year break is irresponsible,” she said.
By Amy Denney

Managing Editor, Austin metro

Amy has worked for Community Impact Newspaper since September 2010, serving as reporter and senior editor for the Northwest Austin edition as well as covering transportation in the Austin metro. She is now managing editor for the 10 publications in the Central Texas area from Georgetown to New Braunfels. She enjoys spending time with her husband, son and two cats.