Image: Conroe Independent School District has proposed an $807 million bond package, which has nothing to do with improving education but has everything to do with bureaucratic money and power.
Conroe, March 6 – On March 6, 1836, the Mexican army overran brave fighters defending the Alamo after a lengthy siege. On May 4, 2019, the Conroe Independent School District (CISD) seeks to overrun Montgomery County taxpayers by showing they can “win” a bond package which has nothing to do with education and has everything to do with bureaucratic money and power.
This article is the first in a four-part series, which will run March 6 through March 9, concerning the CISD’s proposed $807 million bond package. If it passes, the new bond which will bring the school district’s debt to over $2 billion, representing debt in excess of $31,700 per student.
With passage of the bond, CISD’s tax rate will immediately rise by 1 cent, although CISD has indicated it’s likely the rate will rise 3 cents within four years. In actuality, taxes will rise by quite a bit more than that.
In this article, we discuss bond basics and why everyone who lives in Montgomery County, Texas, regardless of whether you live within the taxing geography of CISD, should care about this bond.
One fact about the proposed CISD bond is very clear: the amount of the proposed bond is $807,000,000.00. After that one fact, the rest gets a lot murkier, even though CISD Superintendent Curtis Null claims that he’s only talking about “the facts” in public. In actuality, Null is trying to sell this bond as hard as a salesman in the main showroom of a car dealership.
The $807 million bond will come with a 1 cent tax rate increase during the first year and an additional 2 cents during the coming 4 years, for a total 3 cent tax rate increase. Those “small” rate increases are actually nothing, because the CISD assumes that property tax appraisal rates will continue to grow at approximately 5 to 6% per year.
The following table from CISD provides the financial “model” for the bond package:
The above table truncates the second and third years of the bond issuance to the right of the farthest right green column shown. The important part of the table comes two columns, (1) Assessed Valuation Growth Rate (%) – the fifth column from the right, and (2) Tax Rate per $100 of Assessed Value – the column in yellow near the middle of the above table.
Let’s do the calculation. We’ll assume you live in a 1978 trailer house in Grangerland (based upon a real example from someone whom the Publisher of this newspaper knows). The Montgomery Central Appraisal District (MCAD) currently places a $10,000 tax valuation on your trailer house.
What the Assessed Valuation Growth Rate (%) column means is that in 2019, CISD assumes (and hopes) that MCAD will increase the value of your trailer house on the tax rolls by 5.73% in 2019 and by 5.50 % in 2020, and down the column through time. Meanwhile, CISD intends to raise your tax rate by 1 cent in the first year, 1 cent in he second year, and 1 cent in the third year, for a total of 3 cents.
How much you actually pay in taxes on your $10,000 trailer house is calculated:
$10,000 property tax valuation x tax rate = amount of taxes CISD takes from you = $10,000 x $0.0024 = $24.00 in taxes. That, of course, is only a portion of total CISD taxes, which actually currently totally $1.28 per $100 valuation. The $0.24 is only the debt service portion of CISD’s tax rate.
CISD, therefore, assumes in its financial model that MCAD will increase the property tax value of your trailer house by 5.73% in the first year, 5.50% in year 2, 5.50% in year 3, 5.50% in year 4, 5.00% in year 5, 5.00% in year 6, and so on, at least through 2029 shown on the table. Don’t fool yourselves; that doesn’t mean your trailer house is actually increasing in value but only that the tax man has increased the value so he can take more in taxes from you.
Therefore, your $10,000 trailer house currently causes you to have to pay $24.00 in taxes. But the nice folks at CISD actually are anticipating in their financial model that they’ll be able to collect quite a bit more in taxes from you.
Here’s the actual calculation of how much you’ll pay in taxes on your 1978 trailer house in 2029:
$10,000 (value now) x 1.0573 (tax valuation increase in 2019) x 1.055 (2020 increase) x 1.055 (2021 increase) x 1.05 (2022 increase) x 1.05 (2023 increase) x 1.045 (2024 increase) x 1.045 (2025 increase) x 1.04 (2026 increase) x 1.04 (2027 increase) x 1.03 (2028 increase) x 1.02 (2029 increase) x 1.03 (tax RATE increase) = $10,000 (value now) x 1.60997 (tax valuation increase over 10 years) x $0.27 (tax RATE increase) = $16,099.70 x $0.0027 = $43.47.
In other words, you’re currently paying $1.28 in total school taxes per $100 valuation, which would be $128 in taxes. After 10 years, however, with the new bond package, you’ll pay $210.91.
That’s right, CISD is projecting for this bond financially to work that your taxes will need to increase 64.77% over the next ten years!
CISD is projecting for this bond financially to work that your taxes will need to increase 64.77% over the next ten years!
That’s a real number that comes straight off of the financial projection of CISD.
What educational benefit do we get from a 64.77% tax increase in the form of an $807 million, plus interest bond?
CISD’s Superintendent Null has indicated CISD will likely need to propose another bond package in approximately four (4) years. Null has privately also told a number of elected officials that, after this bond package goes to referendum on May 4, CISD will impose a “major rezoning” of where children will attend schools within the school district.
Citizens should ask a basic question about the school bond, however, because supposedly the purpose of CISD as a school district is to provide education to our children. The four basic methods of evaluating school district success, ever since the Carnegie Foundation developed the National Assessment of Educational Progress in the 1970s is to ask four basic questions:
(1) What is the reading proficiency of children in the Fourth Grade?
(2) What is the mathematics proficiency of children in the Eighth Grade?
(3) What is the high school graduation rate?
(4) What is the percentage of high school graduates who attend postsecondary education?
Those four basic questions are the primary metrics to evaluate a public school’s educational success.
Therefore, this newspaper asked a basic question and you can read the colloquy.
Let’s summarize what we’ve learned from CISD’s Spokesperson. CISD has no metrics whatsoever with respect to any improvements in educational outcomes if the citizens approve the $807,000,000 bond package! For all we could speculate, passage of the bond package might actually reduce educational performance of CISD.
What’s actually in the bond? In many ways, it’s actually unclear, which we’ll discuss over the next few days in this newspaper. But we do know the $807,000,000 package includes:
- More than $131 million of maintenance expenditures, which are in the proposed $807 million bond illegally;
- The CISD bureaucracy’s transportation wish list which will age out long before taxpayers would ever finish paying for the proposed 25-year bond;
- $39 million of “contingency,”;
- $20 million of unrestricted “land purchase”;
- $36 million of “technology” will lose its useful life long before the end of the 25-year bond’s amortization;
- The extremely unpopular proposal radically to alter the campus and appearance of historic Conroe High School;
- A questionable “overhaul” of Creighton Elementary School’s mechanical, electrical, and plumbing systems;
- More than $23 million for turf;
- Unnecessary renovations;
- 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; and
- Questionable agricultural facilities and vocational facilities which are more appropriate for a junior college or technical school.
CISD Trustee Inman offered a substitute bond of $304 million, which would have been half a billion dollars less, which Inman explained contained the district’s “needs” rather than the “wants” in the current bond proposal. Inman’s substitute bond proposal died for lack of a second at the January 15, 2019, Board of Trustee meeting where the seven-man Board rubber-stamped the administration’s request for the massive $807 million bond package.
Why people outside of CISD should care
People outside of the taxing geography of CISD should care deeply about defeating this bond, even though they can’t vote in the May 4 election.
It all goes back to MCAD, the out-of-control appraisal district behind which local taxing authorities hide to raise taxes. Rather than raises tax rates substantially, local government cowards procure tax increases by having the MCAD raise property tax values. That’s how your $10,000 1978 trailer house becomes worth $17,000 in just 10 years’ time.
The re-appraisal policy of MCAD emanates from a 5-person Board of Directors, which until recently had both Precinct 2 County Commissioner Charlie Riley and Precinct 1 County Commissioner Mike Meador on it. The Board currently includes Meador, former CISD Trustree Bruce Tough, and major CISD booster Barry Blanton.
Who selects the MCAD Board of Directors? The taxing authorities in Montgomery County get to make the selection with their votes weighted by the amount of taxes they take from citizens. Therefore, by far, the largest voter in MCAD Board of Directors elections is none other than CISD.
CISD’s vote for the MCAD Board usually controls the elections and determines a majority of the Directors who established re-appraisal policies for property tax valuations.
Therefore, with passage of the $807 million bond, CISD will need immense tax increases, as the table near the top of this article reveals, in order to support the enormous debt payments the school district will have to make. With passage of the bond, CISD will have to push MCAD’s Board of Directors all the harder to keep those tax increases coming in the form of property tax valuation increase. Since MCAD’s Board doesn’t discriminate from one taxing zone to the next with respect to the property tax valuation increases, the entirety of Montgomery County will pay the price in aggressive property tax valuation increases, if CISD’s administration wins the gigantic bond election, which will almost double CISD’s debt.
Tomorrow’s Article will be “The Conroe ISD’s $807 million bond set for May 4 election: Part 2 of 4, How much does it cost? Really, how much does it cost?”