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Mission CISD proposes three-cent tax increase

MCISDlogoThe Mission CISD Board of Trustees rejected a proposal Wednesday night to increase the district’s tax rate by 5.5 cents as suggested by Superintendent Ricardo Lopez. Instead, the board is considering a 3-cent tax rate increase.

The superintendent recommended the 5.5-cent tax hike this year, followed by a series of 2-cent tax hikes each year until the Interest and Sinking (I&S) Fund tax rate reaches 26 cents.

The district is facing a $5 million shortfall in debt service for 2014-15 unless the budget is reduced or taxes are increased, or a combination of the two.

Mission Consolidated Independent School District board members said they did not want to impose such a great tax burden on residents. While no official action was taken at the workshop, the board asked Rumalda Ruiz, assistant superintendent for finance and operations, to use a 3-cent tax increase to calculate the proposed budget.

The tax increase is needed to pay the district’s debt service, Ruiz said. The district’s debt service is approximately $12.4 million each year through the year 2018. The district needs an I&S tax rate of 26 cents per $100 valuation to meet that obligation. However, the district proposed a 13-cent tax swap in 2011, when voters approved moving 13 cents from the I&S tax to the M&O tax for maintenance and operations. This reduced the I&S tax rate from 26 cents to 13 cents, leaving the district with insufficient I&S taxes to pay the debt service this year. The shortfall is in excess of $5 million each year.

Although it was not communicated to the public at the time of the 2011 Tax Ratification Election (TRE), Ruiz said the district originally planned to increase the I&S tax rate each year following that election to keep up with the debt service. The I&S tax rate, she said, should have increased from 13 cents to 14.8 cents in 2012, 16.7 cents in 2013 and 18.5 cents in 2014. But the district never raised the tax rate.

When the TRE election was presented for voter approval, the district said it was not a tax increase, but merely a tax swap – from M&O to I&S.

The superintendent recommended increasing the I&S tax rate from 13 cents to 18.5 cents for 2014-15–for an increase of 5.5 cents this year. Then, the district would plan a 2-cent tax increase every year afterward until the I&S rate reaches 26 cents–the rate before the TRE election.

Board Member J.C. Avila said, “I was looking at 8 to 10 cents.”

But Board President Sonia Treviño responded, “That’s not going to happen because we have to explain to our constituents that we just had (millions of dollars that went) into athletic facilities. Being an athletic supporter myself, I can critique that real fast.

“We just haven’t done our job. I’d much rather think our constituents would rather have our kids running on a dirt track over there than have an increase of 10 cents,” she added.

Board member Patty Bazaldua suggested they propose a 3-cent increase. Treviño concurred and instructed administration to present a proposed budget with a 3-cent tax increase.

The proposed budget figures are to be published in the newspaper Aug. 15, and a public hearing will be held Aug. 27 before the board takes action that evening to officially adopt a new tax rate and budget.

If the tax increase is adopted by the board, the I&S fund tax rate would increase from 13 cents to 16 cents. The M&O fund tax rate would remain at $1.17, for a total tax rate of $1.33.

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