Property Tax Strategy

1. 100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
62% 64% 69% 74% 78% 82% 85%
31% 28% 23% 19% 15% 11% 8%
6% 8% 8% 8% 8% 8% 8%
Local Taxes State Other
PROPERTY TAX RATE STRATEGY
NORTH EASTINDEPENDENT SCHOOL DISTRICT
Tradition of Excellence
Because property values continue to increase and NEISD has responsibly managed its debt obligations, it has the ability to
reduce the debt service (I&S) tax rate by 4¢. At the same time, the District can increase the maintenance and operations
(M&O) tax rate by 2¢ thus reducing the overall property tax rate by 2¢.
Combined property taxes & state aid
have always totaled approximately
92% of General Fund revenue. Due to
2015’s and 2017’s legislative
(in)actions, the local property tax share
will be near 78% by 2018-2019. If the
legislature does nothing again in 2019,
local share will increase to 85% by
2020-2021.
Why should NEISD consider a NEW tax rate strategy?
2011-2012 2016-2017
Other 7%
State Local
58%35%
State Local
69%23%
How is NEISD able to consider a new tax rate
strategy?
• Property Values have increased
• NEISD’s responsible debt management program
• Commercial Paper Program
• Refunding of bonds
• Implementation of variable rate debt program
How could it work?
A new tax rate strategy would save taxpayers 2¢ on their total taxes
by reducing the I&S tax rate by 4¢ and increasing the M&O tax rate
by 2 cents.
Other 8%
Debt Service Maintenance and Operations
Today
With
New
Strategy
34.5¢ $1.04
30.5¢ $1.06
= $1.385
= $1.365
Benefits:
• Decreases property tax rate by 2¢
• Increase overall revenue by $16.1M
Who could benefit?
• Students
• Provide resources to maintain quality programs
• Teachers & Staff
• Competitive Salaries & Benefits
• Tax Payer
• 2¢ net property tax
rate reduction
$1.385 $1.365
2016 2017
TAXRATE TAXRATE
State aid is shrinking
Your school property tax is made up of two combined tax rates:
• Maintenance and Operations (M&O rate) = day-to-day operations (e.g., teacher salaries, instructional materials); and
• Interest & Sinking (I&S rate) = money can only be used to pay long-term debt (i.e., bonds for construction projects)