Editor's note: This story has been updated to clarify that two one-time bonuses were included in the proposed FY 2021-22 budget. A previous version stated there was only one.
The Magnolia ISD board of trustees proposed a property tax rate of $1.1872 per $100 valuation for fiscal year 2021-22, a $0.0872 decrease from the ongoing fiscal year, at a budget workshop Aug. 2.
Although the average taxable value in the district increased by over $15,000, Assistant Superintendent of Operations Erich Morris said the decrease in the tax rate for FY 2021-22 will result in the average homeowner paying less in property taxes.
“I think it’s important to note that after four years of the same tax rate of $1.38, we are proposing for the third year in a row to decrease the tax rate,” Morris said.
The tax rate for FY 2020-21 is $1.2744 per $100 valuation.
Morris said local revenue is projected to increase by $800,000 for FY 2021-22, but that does not equate to more total revenue. House Bill 3, adopted in 2019, and HB 1525, which passed in June, limit the amount of additional revenue local districts can generate, so state aid for the district will decrease by the same amount, according to a presentation from the meeting.
“As it relates to generating more revenue on our [maintenance and operations] side, there’s only one way to do it, and that’s with additional students,” Morris said.
The district is expected to grow by 509 students in the 2021-22 school year, according to a 10-year forecast presented at the workshop. Morris said the proposed budget is conservative and accounts for just half that enrollment growth.
“We’re in as good of a position as any because we have anticipated growth, and we’ve planned well by using one-time expenses for one-time incentives,” Morris said.
The proposed FY 2021-22 budget includes a 2% raise and two one-time $1,000 bonus for employees funded by Elementary and Secondary School Emergency Relief funds the district has been allocated. The board approved the first payment at the Aug. 2 meeting with the second bonus expected to be paid in November, Morris said.
The board unanimously approved proposing the lower tax rate during the regular meeting. The rate and budget, however, will not be adopted until after a public hearing Aug. 23.