Dripping Springs ISD approves reduction in tax rate for FY 2023-24

DRIPPING SPRINGS — Dripping Springs ISD is moving forward with a reduction in its tax rate for the 2023-24 fiscal year.

On Monday, Sept. 25, the DSISD Board of Trustees approved a rate of $1.1075 per $100 of certified property value by a vote of 6-1. The tax rate is a $0.1854 decrease from the 2022 rate of $1.2929 and is $0.4125 lower than the 2018 rate of $1.5200.

The total tax rate of $1.1075 consists of two parts: $0.7575 for Maintenance and Operations (M&O) and $0.35 for Interest and Sinking (I&S).

“The Maintenance and Operations covers the day-to-day, so it covers your people, utilities, contracts [and] things of that nature,” said DSISD Chief Financial Officer Gina Mitschke. “The Interest and Sinking tax rate has to do specifically with our voter-approved debt and it goes to pay principal and interest on that debt. Recapture does not apply to Interest and Sinking.”

Trustee Tricia Quintero, who was the dissenting vote, asked about lowering the I&S rate.

“If we would bring the I&S rate down 10 cents, which I know is not what we want to do just because of capacity reasons,” she said. “If we had to bring it up next year just to kind of give our taxpayers a little more relief for the current situation that’s going on right now, we would have to go to an election basically, correct?”

The district does not need to go to an election until it asks for new bonds, Deputy Superintendent for Finance & Operations Elaine Cogburn responded.

“So, you set the tax rate each year on what you need to retire principal and interest. If you dropped it this year, you could increase it this year, but if we go for new bonds, we would have to show the taxpayers what we think those bonds would cost and they would have to approve that,” she said.

Quintero then asked if the district could lower the rate this year and then raise it again next year, hoping for a different climate “because we’re using the excess to pay down debt and it’s not actually physically needed at this time.”

Cogburn said that is an option, but she advised against doing that.

“I think Tricia asked a good question as it relates to, is there an opportunity to lower that? I think the short answer is, sure,” said trustee Rob McClelland. “But the risk, I would say, from everything I’ve taken on from our conversation is that our ability to reduce our debt liabilities and to provide continual interest savings to the taxpayer would be significantly impacted if we did that … it would be a fiscally conservative principle to manage our debt well.”

Property tax bills are a product of the tax rate and the property value. Therefore, a property owners’ tax bill could increase even though the tax rate has decreased, according to the district.

Senate Bill 2, passed this summer by the 88th Legislature, provides for an increase in the homestead exemption, which will appear on the November ballot; if approved, the state homestead exemption will increase from $40,000 to $100,000, providing additional property tax relief.

“We do anticipate that will pass, [we] can’t imagine it wouldn’t,” Mitschke said.

Lawsuit against Texas Education Agency

Also at the meeting, the DSISD Board of Trustees unanimously approved to join a lawsuit against the Texas Education Agency (TEA) over its A-F Accountability System. This comes after Hays CISD voted to join the lawsuit on Sept. 19, following suit of several school districts across the state.

The statewide rating system, which was established by House Bill 22 in 2017, provides information about the academic performance of Texas schools.

According to the lawsuit, the Texas Education Commissioner (Mike Morath) is required by the Legislature to distribute a document explaining the accountability performance measures, methods and procedures that will be used to assign performance ratings prior to the start of each school year. The commissioner must publicly release the final performance ratings for all districts and campuses by Aug. 15 of each calendar year but has yet to do so.

On Sept. 12, TEA announced that the A-F ratings were going to be delayed. While they were initially going to be issued publicly on Sept. 28, the agency anticipates it could take another month.

The Dripping Springs Board of Trustees will meet next on Oct. 16 for agenda review and Oct. 23 for a regular meeting.