The adopted rate is $1.1797 per $100 property value, a reduction of $0.0862 compared to the previous fiscal year’s rate of $1.2659. The maintenance and operations rate decreased by $0.0462, and the interest and sinking rate dropped $0.04.
A resident with a home value of $235,000, for instance, will see a $202.57 reduction in their tax bill year over year. The average home value in the district is $236,238, according to information presented at the meeting.
Proposed rates have varied as district leaders held discussions in the summer and fall. District leaders debated the interest and sinking rate Sept. 27 after trustee Jeffrey Larson proposed a lower interest and sinking rate, which he said would avoid excessively padding the district’s fund balance.
The interest and sinking rate is imposed by districts to pay for any bond debt that may have been issued to fund construction of schools and facilities, per the Texas Comptroller’s website.
“It can either be in our taxpayers’ pockets, or it can be sitting in our fund balance essentially saved for a rainy day,” Larson said of the revenue the district would gain with a higher interest and sinking rate. “I think we’ve got enough saved up for a rainy day.”
Ultimately, the district approved its initially proposed rates.
Larson proposed a no-new-revenue interest and sinking rate of $0.2833 as opposed to the district-proposed rate of $0.29 per $100 property value. Trustee Michelle Davis seconded Larson’s proposal, and four trustees voted against it; trustee Scott Bowen was not present Sept. 27.
“It doesn't affect teacher pay; it doesn’t affect any of our programs—I think it’s the right thing to do,” Davis said when speaking to support Larson’s amended rate.
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The maintenance and operations rate is the lowest possible rate CCISD could adopt without incurring legal penalties, based on House Bill 3-related tax rate compression, per district finance leaders.
The board approved the district’s general, debt service and child nutrition budgets Aug. 23. The general fund total expenditure budget is $371.2 million, and the debt service total expenditure budget is $82.9 million, per board documents presented Sept. 27.
The approved budget has a debt service deficit budget of $1.7 million, but CCISD officials’ projections of a five-year debt service forecast indicate it will be possible to gradually reduce that deficit over time with the adopted FY 2021-22 tax rate. A property value growth of 5% is forecasted over the next five years.
“That’s a hard thing to predict out that far, but we felt like it was conservative” said Alice Benzaia, director of business services and financial planning.
Current property values are up 9% from last year’s values, Benzaia said Sept. 27. The district’s adopted interest and sinking rate offsets the large impacts of property value increases on the overall tax rate; avoids inconsistent jumps in interest and sinking rates; and allows some protection with the fund balance moving into future years, given how many unknowns are at play, trustee Laura DuPont said.
The total tax rate has decreased more than $0.22 in the last five years: 2016’s tax rate was $1.4 per $100 valuation, per documents presented Sept. 27. Data collected by CCISD shows that of more than a dozen Houston-area ISDs, only Houston ISD has a lower tax rate than CCISD this year.
