SISD considers tax rate increase

Sharyland ISD’s financial officers are considering a 2-cent tax raise in order to fund needed capital projects. By raising taxes from $1.3355 to $1.3555 per $100 property valuation, SISD would be able to budget capital projects such as roofing, repairs and HVAC needs in the maintenance & operations fund.

In the past, Sharyland ISD has taken out loans or bonds for construction, expansion, renovation or replacement projects. Sharyland ISD doesn’t collect enough interest and sinking fund taxes to pay for the bond’s principal and interest payments, so a transfer from M&O taxes pays the balance of approx. $1.7 million.

The money that goes to the maintenance tax note, a type of loan, would be used to pay for capital projects if the projects were already in the budget. But instead of including the projects in the yearly budget, the district takes out loans on an as needed basis.

The 2-cent raise in taxes would add an extra $570,000 a year to the budget, which would be used exclusively for capital projects, whether the projects are preventive, deferral and even replacement plans.

“It’s a matter of having enough revenues every year to take care of the normal operational-type things that come up during the year, versus setting up loans at different periods of time for different periods of years,” said Connie Lopez, the assistant superintendent for business-finance & student services.

Superintendent Robert O’Connor said the district has been taking out loans for such projects for an unknown but “significant” period of time, but he wants the district to be proactive.

“We just need to stop taking out these loans and pay for it on a cash basis because of the interest that we’re paying on these loans,” O’Connor said. “At some point we have to shift the mindset and pay on a cash basis instead of continuing to take out these maintenance tax notes.”

Board member Julio Cerda expressed concern in regards to the suggested tax raise. On a $125,000 home, the 2 cent increase would be $20 yearly property tax increase.

“There has to be other means of borrowing for whatever maintenance issues that we have, and it all depends on the maintenance. If it’s cooling towers that’s going to take 15 years, borrow the 15 years for that,” Cerda said. “Don’t raise taxes to improve infrastructure for one particular building when everyone is getting hit at the same time. I think we can still work around what we have.”

If the board approves the 2-cent increase, the tax rate could still potentially be raised more in the following years. But any additional raise could be based on a number of factors such as student attendance and property value, according to Lopez. The factors may also mean the district won’t have to increase taxes.

“Two pennies isn’t the end solution but it’s a start,” O’Connor explained. “The truth is, we’re using I-don’t-know how many pennies just toward maintenance tax notes. It’s not an easy fix.”

The final budget for the 2016-2017 fiscal year, which runs from Sept. 1 to Aug. 31, 2017, will be approved at the Aug. 23 board meeting.