Eleven-League Grant said:
El Mariachi said:
And compared to last year, the impact of the VATRE will have a net zero effect to the overall tax rate.
Let me know if you have any questions.
Thanks for offering to entertain a question or two from the peanut gallery. And, I assure you that I'm not being intentionally obtuse, as I find the whole school finance thing a bit confusing.
First, let me know if I have correctly understood the details here:
1. If the VATRE election fails, the total tax rate will be .909200/$100, a decrease of 21-1/2 cents from last years' rate. This is due to the tax rate compression passed by the 2023 Texas Legislature;
2. If the VATRE election succeeds, the total tax rate will be .939200/$100, a decrease of 18-1/2 cents from last years' tax rate;
and,
3. If the VATRE election succeeds, Midway ISD has promised to reduce the I&S rate by the 3 cent difference, which in effect brings the total tax rate retroactively back down to .909200/$100, or a 21-1/2 cent decrease.
If I got those right, here are my questions:
1. Is the reduction in the I&S not only assured to take place, but also effective for this tax year (2023)? I ask because the Midway ISD website only states that 'Midway ISD is considering a decrease [I&S] tax rate';
2. Will the McLennan County Tax Assessor, who has already sent out property tax bills calculated at the .939200/$100 total rate then send out supplemental bills reflecting the reduction in this year's rate to .909200/$100?;
and,
3. Does the reduction in the I&S rate necessarily mean that it will take MISD a longer period of time to pay off its obligations?
Thanks again for coming on here and fielding questions like you have. I appreciate it.
Believe me when I say this: there are no dumb questions with school finance. It's confusing, convoluted and complicated. Took me a good while to get my arms around it, and I still feel uninformed at times.
1 and 2 (details) are correct. With the VATRE, it's $0.9392. Without it, it's $0.9092.
For detail #3, there is no contingency on the I&S rate decrease...that's already a done deal. Points 1 and 2 are the two options. The board decreased the rate by $0.03 in August - in good faith - hoping that the $0.03 would be recovered with the VATRE effecting a net zero tax rate impact, notwithstanding state compression of $0.1854.
In summary:
Overall rate in 2022 was $1.1246
Midway lowered that rate by $0.03 (I&S)
Texas lowered that rate by $0.1854 (compression)
Midway is asking for $0.03 increase (M&O)
The new (VATRE) rate would be $0.9392
That's exactly $0.1854 lower than 2022 and the decrease is equal to the amount of state compression
Question 1: Yes, it's effective for 2023. I will tell Traci to update the website, because the I&S decrease is a done deal as previously stated.
Question 2: If the VATRE fails, there will be an updated tax bill sent out with the $0.9092 rate.
Question 3: I guess technically yes. Because if we kept the I&S rate at $0.27 it would have allowed us to collect more money and pay debt down faster. That being said, with the ever increasing property values, we are already in a position to pay off debt early even after lowering the rate to $0.24...but we obviously could have done it even faster with the higher rate. In the end, the best option for Midway was to incentivize the passage of the VATRE which means $3.75 million of Tier 2 operating revenue. At this moment, that's more critical than paying off debt a little earlier than we would have otherwise.
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