Conroe, August 12 – When it comes to the out-of-control spending Conroe Independent School District (CISD), only six one-hundredths of a penny makes a huge symbolic difference. The difference in reality is 1.235 versus 1.2344, a difference of 0.0006. How can that be?!
There’s an important number in government budgeting known as the “effective tax rate.” The “effective tax rate” means the tax rate which will yield the same amount of collections in the next Fiscal Year as the government entity has collected in the current Fiscal Year. Still not clear?
Here’s how it works. Remember that your actual property tax bill has two components:
TAX RATE x PROPERTY TAX APPRAISAL = TAX OWED.
For example, let’s say the tax rate were ten cents per $100 valuation and your house had a tax appraisal of $25,000. Here’s the calculation:
TAX RATE (0.10 per $100 valuation) x PROPERTY TAX APPRAISAL ($25,000) = $25 owed in taxes.
If instead, the Montgomery Central Appraisal District Board of Directors established a policy that homes in your neighborhood should be doubled in value, because things are so nice where you live, then the calculation would be:
TAX RATE (0.10 per $100 valuation) x PROPERTY TAX APPRAISAL ($50,000) = $50 owed in taxes.
If the taxing authority also increased its tax rate, then your taxes would go up even more. But if your tax rate went down by 50% to 0.05 per $100 valuation, then here’s the calculation:
TAX RATE (0.05 per $100 valuation) x PROPERTY TAX APPRAISAL ($50,000) = $25 owed in taxes.
In other words, despite the fact that your property tax appraisal went up, your tax rate might come down to a level where the amount of taxes you actually pay during the next year would be the same as they were in the previous year, despite the property tax appraisal increase. That is the “effective tax rate.”
So every taxing jurisdiction has an “effective tax rate,” the tax at which its taxes will not actually increase, even though property tax appraisals have increased.
In CISD, appraisals have increased approximately 6.75% on average. The current tax rate is $1.28 per $100 valuation. But the “effective tax rate,” the rate at which CISD taxpayers’ taxes would not actually increase is $1.2344 per $100 valuation, according to Montgomery County Tax Assessor-Collector Tammy McRae, who spends her days performing such fun calculations.
In other words, despite property tax appraisal increases, if CISD cared enough not to raise taxes on the school district’s taxpayers, its tax rate for Fiscal Year 2020 would be $1.2344 per $100 valuation, the effective tax rate, or lower.
Nevertheless, CISD has now proposed a budget with a tax rate of $1.235 per $100 valuation. It seems like a very small number, but the difference between CISD’s proposed tax rate and the effective tax rate should tell the citizens of Montgomery County a gigantic story.
What it shows is that CISD has no concern whatsoever about taxpayers, not even enough of a concern to try to reduce spending by a small enough amount to keep taxpayers’ taxes the same as they were during the current Fiscal Year. CISD’s only concern is how much of your money does CISD want to spend.
Clearly, this small distinction reveals the complete lack of care of the CISD administration and the CISD Board of Trustees for the taxpayers.
In actuality, the problem is far worse than a mere difference of $0.0006 per $100 valuation. The reason is that CISD’s Board of Trustees along with the Texas Legislature made clear their promise that, statewide, property taxpayers would enjoy some relief this year from the massive imposition of property taxes. For that reason, the Texas House, the Texas Senate, and the Governor brought into law Senate Bill 2 and House Bill 3 to require a “compression” or reduction of approximately 7 cents per $100 valuation, so that beleaguered taxpayers could enjoy relief from the use of excess state government funds.
CISD taxpayers should actually enjoy a substantial reduction in their total taxes considerably below the “effective tax rate.” Instead, CISD intends actually to increase taxes and wipe out the entire statewide property tax reform help.
CISD’s only concern is clearly itself and only itself. And it’s not “for the children,” because instructional spending per capita is actually declining in the greedy CISD.