TAXES & THE MAY 2023 BOND
In Texas, the school district tax rate that shows up on a property owner's tax bill is a combination of two rates that fund different portions of the school district's budget. These rates are the Maintenance & Operations (M&O) Tax Rate, and the Interest & Sinking (I&S) Tax Rate.
The M&O Tax Rate funds the day-to-day maintenance and operations of the school district like teacher salaries, utilities, and classroom supplies. This is the larger of the two tax rates. For DSISD, the M&O tax rate is $0.9429 per $100 of property value.
The I&S Tax Rate can only be used to pay off debt incurred by issuing voter-approved bonds. School districts are required to set the I&S tax rate at the level necessary to make the annual debt payments on all outstanding voter-approved bonds. In the state of Texas, the sale of bonds is the primary funding mechanism for school districts to raise funds for capital projects. DSISD does not receive assistance from the State of Texas to repay debt or build facilities.
DSISD's I&S tax rate of $0.35 per $100 in property value is expected to be sufficient to fund the May 2023 bond. A few combined factors have put the district in this position, including continued growth and development and the practice of paying down debt early.
Pass or fail, the district does not expect its total tax rate to exceed the 2022 tax rate of $1.2929 per $100 of property value. The district begins receiving preliminary property values for next year at the end of April and the DSISD Board of Trustees approves the annual tax rate each September.
A new state law, adopted in 2019, requires every school district to include the statement "THIS IS A PROPERTY TAX INCREASE" on the ballot, regardless of the actual impact on the district's tax rate. This is because, with a bond, districts take on more debt. Paying off bonds is similar to paying off a mortgage. While DSISD anticipates paying off the May 2023 Bond over a period of 30 years, school districts in Texas can take up to 40 years to pay off bond debt.
ARE YOU 65 YEARS AND OLDER?
By law, homeowners 65 years and older will NOT see an increase in their school district tax bill, even if their property values increase (excluding property improvements) as long as an approved Homestead 65 and Over Exemption application is filed with the Hays or Travis Central Appraisal District. This exemption is effective Jan. 1 of the tax year in which the property owner becomes 65.
For questions on homestead exemptions, Hays County residents can call 512.268.2522 and Travis County residents can call 512.873.1560.