Conroe ISD’s financial manipulations to result in tax increase, another ridiculous bond proposal

Conroe ISD’s financial manipulations to result in tax increase, another ridiculous bond proposal

Image: Republican Precinct 10 Chairman Mark Frank (pictured far left) and a group of Republican activists from Conroe protested in front of Conroe Independent School District on Monday, July 29, 2019, because the school district intends to raise taxes and completely wipe out all benefits to the citizens from statewide property tax reform. The school district intends to propose a $683 million bond package on November 5, 2019, in a referendum with the same projects as those which voters had overwhelmingly rejected in the May 4, 2019, bond referendum.

Conroe, August 2 – The Conroe Independent School District (CISD) administration purposefully created an artificially low debt service tax rate during Fiscal Year 2018-2019 in order to try to convince voters to approve an $807 million bond package in the May 4, 2019, bond referendum. After voters overwhelmingly rejected CISD’s May 4 bond package, the CISD administration has manipulated the proposed Fiscal Year 2019-20 Budget to include a gigantic tax increase, so CISD can try to garner approval for the same projects in a November 5, 2019, bond referendum while claiming that the bond package will result in no tax increase (other than the one CISD’s manipulative administration and Board of Trustees foisted on the taxpayers without a referendum in the Budget instead.)

The tax rate increase is 4.5 cents per $100 valuation. While the mandated statewide property tax reform would have given CISD taxpayers a break, instead CISD’s decision to manipulate its budget to increase the Debt Service portion by 4.5 cents per $100 valuation, along with property tax appraisal increases, results in an effective tax rate that is higher than it was in Fiscal Year 2019!

Either way, CISD’s administration and Board of Trustees clearly seek to force a gigantic package of wasteful bond projects on CISD taxpayers through financial and election manipulations.

Worse yet, information, which The Golden Hammer has obtained, reveals that CISD’s tax rate was unnecessarily high for maintenance and operations during Fiscal Year 2018-2019.

 

Source: Conroe Independent School District.

Manipulating the debt to trick voters to pass a bond package

For the May 4, 2019, bond referendum, CISD proposed an $807 million package of projects wasteful for numerous reasons, which included:

  • $131 million or more on maintenance items;
  • $23 million or more on turf for some sports fields;
  • $245,608,695.65 in payments to architects, engineers, and lawyers.
  • $1,482,998.82 to refurbish the Jett Center which CISD has said it intends to vacate;
  • $405,000.00 for curtains for elementary school stages;
  • $425,000.00 for an air soft range;
  • $204,000.00 for two (2) dance floors each with 4,500 mirrors;
  • $39 million of “contingency,”;
  • $20 million of unrestricted “land purchase”;
  • $36 million of “technology” which will lose its useful life long before the end of the 25-year bond’s amortization;
  • $146,068,000.00 for the extremely unpopular proposal radically to alter the campus and appearance of historic Conroe High School;
  • A wasteful Teaching Training Facility, which would cost taxpayers more than $17 million, when facilities are already more than adequate for the same purpose across the District;
  • Questionable agricultural facilities and vocational facilities which are more appropriate for a junior college or technical school, costing at least $3,618,000.00; and
  • $24,576,592.69 of expenditures supposedly for “safety” which CISD’s Superintendent admitted on February 18 is a sum of money for which they don’t yet know the spending items.

Just those items alone total more than $688,408,286!

Interestingly, the bond package, which CISD intends to put on the November 5, 2019, General Election ballot, is $683,000,000, a number very similar to the waste in the first bond package.

Voters weren’t stupid. They rejected the May 4 bond with 54% of the vote.

In order to try to convince voters to vote – stupidly – for the May 4 bond, however, CISD’s Board of Trustee and administration instituted some substantial manipulations of the Fiscal Year 2018-2019 Budget in order to make the Debt Service portion of that budget appear artificially low. The May 4 bond included a proposal to increase the tax rate by 3 cents but it also included a massive total tax increase of 61.7% over ten years through the tax rate increase as well as property tax appraisal increase CISD would push through its control of the Montgomery Central Appraisal District Board of Directors.

In Fiscal Year 2018-19, the Debt Service portion of CISD’s tax rate was 22 cents per $100 valuation, 2 cents lower than it had been the previous four years. Please see the chart near the top of this article.

How did CISD manage to lower the Debt Service tax rate to manipulate towards voter approval of the May 4 bond package? The Golden Hammer has obtained secret documents from the Montgomery County government and from within the school district, which reveal CISD used unencumbered funds of $17,630,972 artificially to help lower the debt to $84,424,684. That allowed CISD to lower the Debt Service portion of its already-bloated tax rate to 22 cents rather than the 24 cents which would have seemed higher, especially since the greedy CISD administration and Board of Trustees wanted to raise the tax rate another 3 cents to 25 cents per $100 valuation.

After voters rejected the May 4 bond referendum, however, CISD had an opportunity to manipulate its tax rate even more, thanks to the help of the 86th Texas Legislature’s House Bill 3, inappropriately dubbed “school finance reform,” when the enacted legislation was anything but that.

Under House Bill 3, CISD’s maintenance and operations tax rate would lower to 97 cents per $100 valuation, although it’s important to note that the reduction is coming from State collection of taxes, which Texas taxpayers paid nonetheless. The hope of the Texas Legislature was to give local school taxpayers some much-needed property tax relief.

CISD, however, has taken a very different approach.

For Fiscal Year 2019-20, the school district’s administration has intentionally chosen not to use unencumbered funds (which are available, by the way) to reduce the total debt service, which the school district had done the year before in the amount of $17,630,972. Instead, CISD presented the full $100,915,781 in debt to Montgomery County Tax Assessor-Collector Tammy McRae, who then certified that the appropriate CISD Debt Service portion of its tax rate would be 26.5 cents per $100 valuation, an increase of 4.5 cents per $100 valuation, a tax rate increase even higher than what CISD had threatened as part of the May 4 $807 million bond package.

In order to make the voter manipulation complete, now CISD will claim that its upcoming $683 million bond package “will not raise taxes.” Clearly, that’s false for two reasons:

  • #1, CISD will have already raised the Debt Service tax rate through its budget mechanism – without voter referendum approval – by more than CISD had proposed to raise the Debt Service tax rate with the May 4 $807 million bond;
  • #2, CISD will still push those property tax appraisal rates aggressively higher through its control of the Montgomery Central Appraisal District Board of Directors to garner an even larger tax increase than CISD would have confiscated from taxpayers in the $807 million bond!

The discerning reader may ask the question: Where is CISD getting money like $17,630,972, which is used to pay the Debt Service in Fiscal Year 2018-19? That’s a lot of money. The Golden Hammer will reveal the completely disgusting answer as the Featured story on Sunday, August 4, 2019.

The Empire Strikes Back.

 

 

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