Special election scheduled for Sept. 15
Carroll ISD trustees, eyeing a roughly $3 million shortfall in the 2012-13 budget, voted in July to call a special election this fall, asking residents to raise the tax rate. Before voters is a two-cent increase to the maintenance & operations side of the district's tax rate, a move that would cut the shortfall by an estimated $1.1 million this year.
The 6-1 decision came after about two hours of discussion and a number of remarks from Southlake residents on both sides of the issue. Ultimately, though, board president Read Ballew reminded the crowd that all trustees were voting on was whether to put the item before the public in a tax ratification election.
"I think it's expected of us to give the voters a choice," he said. "By doing the TRE, we're not passing the tax; we're asking the public to tell us what they want us to do and get a true vote on it."
If voters approve the measure Sept. 15, their overall tax rate will increase by only a half cent — to $1.42 per $100 of valuation. That is because in addition to calling for the two-cent TRE, trustees also approved a 1.5-cent decrease on the interest and sinking — or debt repayment — side of their tax rate.
If the TRE fails next month, taxpayers will still see the 1.5-cent drop in their tax rate in the coming year. But a majority of trustees expressed hope that lowering the rate on one side would make taxpayers more comfortable with increasing it on the other, where money is more desperately needed.
With the average Carroll ISD home having a taxable value of $467,580 this year, the tax ratification election failing in September would mean a roughly $70 decrease for the average homeowner. If the vote passes and taxes raise by a half-cent overall, the average homeowner would pay about $23 more in taxes this year. Fred Stovall, the lone trustee who voted against the TRE, said he applauded the board decreasing taxes where it could this year but could not support even the possibility of taxes going up.
In preparation for the election, trustees and district staff will continue to educate voters. Among the most confusing items for residents, officials say, are the difference between the two tax rates and the regulation of local revenue.
The M&O and I&S sides of a district's tax rate feed into two separate funds. M&O tax revenue is used for the district's general operating budget, and in the case of property-wealthy districts like Carroll, it may also be recaptured by the state and redistributed to poorer districts. I&S revenue is reserved strictly for debt service.
Changes to education funding passed during the 2005 legislative session cut schools' M&O tax rates dramatically, allowing them to set rates no higher than $1.04 per $100 of valuation without voter input. And the law includes a provision that protects the first two cents added to the tax rate from Robin Hood recapture.
Past surveys conducted by the district have shown strong support for a two-cent TRE among taxpayers because of that provision. Trustee Erin Shoupp said the result of the election would send a clear signal to the board about the priorities of district residents.
"With so many things going on in the economy and how many people have been impacted negatively we could be moving to a situation where people's expectations of the district are different," she said. "The best way to determine that is to put it in the hands of the voters."
In addition to whether to hold a TRE, trustees debated when to hold it. Stovall advocated putting the item on the November ballot when, he predicted, turnout would be higher and costs could be lower.
Robb Welch, assistant superintendent for financial services, said holding the special election is estimated to cost about $15,000 compared to the $10,000 to $12,000 cost of holding an election jointly in November. However, having the results of the election before Sept. 30, the district's deadline for setting its tax rate, will save the district thousands of dollars in re-posting and re-reporting, he said.
Trustees also argued that holding the election separately would attract voters who are better educated on the issue.
"People show up for things that they care about," Ballew said. "You get people that show up on Nov. 2 that are never going to show up in September because they don't know and they don't care."
No matter the vote, trustees will still be faced with tough decisions now and in the future, as long as current funding structures remain in place at the state level.
"Even if the TRE were to pass, it is a very small Band-Aid on a flowing river of problems," Shoupp said. "It doesn't mean everyone sitting up here won't be making incredibly tough decisions next year."