House Bill 3 approved by the Legislature in 2019 requires districts to compress their tax rate to compensate for rising property values, Chief Financial Officer Jim Ross said.
Taxable value estimates for the upcoming year indicate the district will see its tax base grow 9%, which is greater than the 6% growth previously anticipated, Ross said.
He previously said in April the tax rate would remain steady in the upcoming year. But as a result of the more significant growth, Ross said he anticipates a tax rate of $1.25 per $100 valuation for FY 2021-22, a decrease from $1.29 in FY 2020-21.
“As small as we are compared to our neighbors, we will have the lowest tax rate and if not we will certainly be [very close]. There’s good and bad to that,” Ross said during the district’s second budget workshop May 10, noting the rapid growth the district is seeing. “I think you’re going to see our tax rate drop rapidly. The problem with that is the state will need to make that up 100% to us for it to not affect us negatively. They’re paying about $0.75 [to the dollar currently]. It’s not good overall as we see this decreasing.”
Additionally, the board of trustees approved a 2% general pay increase on the midpoint value May 11 for employees in FY 2021-22.
As Community Impact Newspaper previously reported, TISD is projecting a $4 million shortfall in FY 2021-22 as a result of state funding challenges, coronavirus-related costs, and the upcoming openings of Grand Lakes Junior High School and the district stadium. HB 1525—which relates to funding for fast-growth district such as TISD—was pending a vote by the Senate as of publication but could mean the difference between a balanced budget if approved and a $4 million shortfall for the district, Ross said May 10.
The budget is slated to come before the board for a vote June 15 with the fiscal year beginning July 1.
