Taxes, tax relief and state aid for Mission CISD voters

For the first time since 2017, Mission CISD did not lower its tax rate. However, with a new state tax relief bill, homeowners could still see a decrease in the taxes they pay to the school district. Residents will have the opportunity to vote for the tax relief in November, and more state aid for Mission CISD. 

TAX RATE

Mission CISD’s total tax rate is made up of two components — the maintenance and operations rate (M&O) and the interest and sinking rate (I&S). The M&O fund exclusively pays for district operations such as salaries, utilities and contracted services. The I&S fund exclusively pays for bond debt payments. 

At the Aug. 21 board of trustees meeting, the board voted to keep the tax rate the same as last year — $1.1130 per $100 valuation. The rate breaks down to $0.7892 on the M&O side and $0.3238 on the I&S side. 

Even though MCISD kept its tax rate at $1.1130, it is still one of the lowest in Hidalgo County. And because Mission CISD has one of the lowest rates in the county, district leaders took the opportunity to pay off bond debt sooner and save on interest. 

During the Aug. 9 school board meeting, the trustees authorized a $0.108 increase to the I&S rate. With the increase, Mission CISD can levy about $2.9 million and defease debt early, saving about $1 million in interest and opening up a future bond option if the district needs it. 

“It’s important to note that the decision-making process for defeasance involves careful annual evaluation by the district and the board,” Assistant Superintendent for Finance Joel Garcia said. “The district is committed to thoroughly reviewing and endorsing the most beneficial approach for potential savings. With this in mind, the district will reassess its choices annually to determine the best way to achieve financial efficiency.”   

Mission CISD could only increase the I&S rate because the state compressed its portion of the M&O rate, putting the district in better financial standing for the future. 

However, voters will have the chance to secure additional funding for Mission CISD through state aid. 

STATE AID

The MCISD school board approved a Tax Ratification Election (TRE) for the November election, allowing the community to vote on changes in the tax rate allocation within the district. The election does not increase the tax rate; it reallocates pennies from one fund to another. 

Constituents will vote to reallocate 3.17 cents from MCISD’s I&S fund to the M&O fund, generating an extra $2.7 million of state funds for the district to utilize on the maintenance and operations side. 

“[Mission CISD] would have this extra funding to utilize as the district needs — to implement instructional programs, to supplement for salaries to do a variety of things,” MCISD Financial Advisor Angel Magallanes said. “There’s no expiration date. Once it’s approved by the voters, this continues year after year. This is extra funding that the district will be able to see year after year.” 

Superintendent Dr. Carol G. Perez emphasized the source of the money at the Aug. 2 board workshop. 

“To be clear, it’s coming from the state, not the constituents, not from the residents,” she said. 

But along with the tax ratification election, residents will also have the opportunity to vote on tax relief for homeowners. 

TAX RELIEF

The state government passed a $12.7 billion tax relief bill earlier in the summer during the 88th legislative session. Senate Bill 2 includes increasing the homestead exemption from $40,000 to $100,000. But constituents must vote to approve the homestead exemption during the November election. 

With Mission CISD keeping the $1.1130 tax rate, taxpayers will still see a decrease in the school district taxes they pay. 

For example, the average market value for a home in Mission is $158,095. Last year, that homeowner would have paid about $1,314 in district taxes with the $1.1130 tax rate. But with the new homestead exemption, that same homeowner would pay about $647 in district taxes with the $1.1130 rate. Additionally, any homeowner under a $100,000 value will not have to pay school taxes. 

Although the homestead exemption is a victory for Texas homeowners who have endured rising property taxes, it means revenue loss for Mission CISD. And with the loss of tax revenue, district leaders are pulling for voters to approve the tax reallocation to make up the difference. 

“Right now there’s an opportunity,” Financial Advisor Bobby Villarreal said. “We don’t know in the future what kind of compressions [the state] may give or they may stop. But there’s this opportunity right now to kind of hold the line, take care of some stuff, give [the district] some flexibility and some options to plan the next five to 10 years.”