At Tuesday evening’s meeting of the Greenville Independent School District Board of Trustees, there was some last-minute discussion about trimming an additional cent from the district’s proposed property tax rate for 2019-2020.
While the trustees still eventually approved the originally-proposed tax rate of $1.228 for every $100 that a property is worth, board president John Kelso recommended dropping the tax rate to $1.218 per $100 valuation.
His reason for suggesting the amendment was that the district’s interest and sinking rate – or I&S – stayed the same as it was the previous year while total property appraisals in the city have increased by about 9 percent.
“If someone had a plan or a reason for keeping the I&S rate where it is, then I could understand, but to just let property values skyrocket while we keep it the same … I just don’t think it’s wise,” Kelso said.
A taxing entity’s total tax rate is composed of its maintenance and operations – or M&O – rate and its I&S rate. The M&O rate is set to cover standard, recurring costs while funds from the I&S tax rate are used for bond debt repayment.
The rates approved by the board Tuesday were an M&O of 99 cents per $100 valuation and an I&S of 23.85 cents per $100 valuation.
One of Kelso’s main reservations about keeping the I&S rate at 23.85 cents was because the 2019-20 budget allocated $5.535 million toward debt service when the minimum debt payment for the year was $5.02 million, leaving about $513,445 in surplus.
According to GISD’s assistant superintendent of business affairs and financial services, Deidra Reeves, the district plans to use the surplus to get ahead on their payments.
“It’s like getting paid off on your house early,” Reeves told the Herald-Banner.
Kelso’s suggestion of reducing the I&S tax rate to 22.85 cents per $100 valuation would have resulted in $5.303 million being available for debt repayment – according to the budget’s projected total appraised value of property in the city of about $2.32 billion – which would have left the district with about $281,350 in surplus for debt repayment.
In order to get funds in time for district employees’ first paychecks of the year, a later date for the approval of the tax rate could not be scheduled with enough time to notify the public, so Tuesday night was the deadline for setting GISD’s tax rate.
Despite this, this week’s school board meeting was the first time during this year’s budget and tax rate development process in which a trustee brought the (then) proposed tax rate into question during open session.
“Why are we waiting until now to discuss this?” Trustee Aletha Kruse directed toward Kelso. “Why didn’t you task them (the finance department) with looking into this earlier?”
Throughout the discussion, most of the trustees were hesitant to cut into the debt repayment surplus, and when the original proposed property tax rate was brought up for a vote, it passed 6-1, with Kelso as the lone “no” vote.
The approved property tax rate for GISD of $1.228 for every $100 that a property is worth is still a seven cent reduction from the 2018-19 tax rate of $1.298 per $100 valuation.
This year, a homeowner in Greenville with a house valued at $150,000 can expect to pay about $1,842 in GISD taxes – not counting property taxes levied by the county, city and hospital district.