Carroll Independent School District has called a May 6 bond election that does not require a local debt service tax rate increase. This will be the third such election in recent years where school officials have proposed a no-tax-rate-increase ballot measure.
In 2006 and 2009, voters approved bond elections that did not require a tax rate increase. In fact, Carroll’s school tax rate has dropped 54.5 cents in the last decade.
That hasn’t stopped rising home values and ultimately, higher tax bills. School officials have been clear during public meetings and bond presentations that just because the school tax rate remains unchanged, doesn’t mean a homeowner won’t see a higher tax bill. The Tarrant Appraisal District sets the property value of homes, not Carroll ISD.
Just this past week, local residents received their property value notices from the Tarrant Appraisal District. Many were shocked to experience significant property value increases. The arrival of these annual notices tends to generate more questions and confusion than answers. Some, no doubt, will want to protest their values.
As a reminder, the local school district tax rate makes up just one portion – although be it the greatest portion – of your local tax rate. Also included are county, hospital and city tax rates. The rates for individual groups are set annually by the elected or governing officials of that entity. And although you may disagree with the final appraisal sent to you by TAD, the figure is based on the square footage of your home and/or the comparable values in your neighborhood.
The rate, then for each of the taxing entities, is applied to your home value. Therefore, for Carroll ISD residents, you pay $1.39 per $100 assessed value. The higher the value of your home, the larger the bill. CISD Trustees, however, have actually lowered the local debt service tax rate by a penny over a two-year period.
School officials remind voters that Carroll ISD has the fifth lowest school tax rate of the 21 Tarrant County school districts. No one likes to pay taxes, but this is the system in place to provide public services like fire, police, roads and schools. Carroll ISD is working to help educate local residents about the projects earmarked in the May 6 election, how Robin Hood has affected the district’s ability to pay for ongoing maintenance and construction items and how a local citizen’s committee worked to identify projects for voter consideration.
CISD enrollment has increased 438 students in the past decade and 1,917 students since 2000. Demographers project an enrollment increase of 372 students over the next five years and 669 students over the next 10 years. Despite adopting an operating budget deficit as a Robin Hood Chapter 41 recapture district, Carroll ISD has managed to give teacher raises and accommodate steady growth through short-term use of portable buildings. The district is expected to pay $19.2 million under the state’s Chapter 41 recapture formula this year.
School officials say that increases in property values benefit the other taxing entities, like the city, county and hospital district, but because of the way the school funding formula works, CISD sees very little operating budget benefit from rising property values. Public schools do benefit, however, on the debt service side of the budget. With voter consideration, this is how schools pay for construction, maintenance and life cycle projects, school buses, etc.
CISD is one of only 16 school districts in the state to receive two stars for financial transparency. The district not only has provided information about the tax rate history, student growth, the proposed bond election, and the work of a 40-member citizen’s committee to study capital needs, it also provides a thorough financial transparency website for the public – one that the state has recognized and honored.
Some attendees at the school bond presentations have asked how the district will pay for proposed projects if there is no tax rate increase involved. The answer has been transparent and consistent. Because home values continue to increase, CISD is able to pay off old debt and layer in new debt using the tax collections on the rate set by Trustees. When CISD is able to take advantage of lower interest rates or pay debt off early, the district does. Conservative financial bond planning counts on an average increase of 6 percent in property values next year with 3.5 percent growth for the following three years and no growth thereafter. The average increase has been 6 percent over the last 10 years, with an 11 percent increase last year.
There are only a few sources of revenue for public schools and local taxpayers bear most of the burden to fund their public schools. Local revenue accounts for 89 percent of the district’s revenue in the 2016-2017 operating budget. State funding as a percentage of the district’s revenue has decreased from 25 percent to 9 percent in the past 10 years.
While a tax rate increase is not planned if the bond passes, some residents have asked what happens if the bond fails? School officials say the debt service tax rate could decrease. Some projects identified by the committee may not get completed. Although CISD is already working under an operational deficit, school officials would have to fund maintenance and operation projects within the current budget or face cuts in programs and staffing. The district also has the option of calling another election in November or May 2018.
For more information about the district’s finances, visit CISD’s Financial Transparency Website.
For more information about the district’s proposed bond election, visit CarrollBudget.com
For more information about Tarrant Appraisal District and your home value, visit TAD.org