PRESIDIO COUNTY — Over the summer, local governments have been diligently plodding through the grueling process of setting their tax rates and budgets for the upcoming fiscal year. Crunching the numbers isn’t a charismatic process, but the fluctuations in property owners’ tax bills have a huge trickle-down impact, from teachers’ salaries to emergency services to whether or not the courthouse lawn gets mowed.
Presidio County
In Presidio County — one of the state’s poorest — the deliberations are never easy. The Texas Legislature tightened the county’s purse strings even further a few years ago with the passage of SB 2, which clipped annual tax revenue growth. Before the law’s adoption in 2019, local governments could grow tax revenue each year by 8% without automatically triggering an election, but the law lowered the threshold to 3.5%.
The revenue caps were not designed to lower tax bills. Instead, proponents of the bill hoped that they would push local governments to reign in their spending and help demystify the property tax process, but critics pointed to the outsize influence on smaller government entities already struggling to keep the lights on.
Each year, property taxes are set, assessed and collected by schedule that weaves together appraisal districts, local tax offices and taxing entities. At the start of each year, appraisal districts get to work and send out notices of appraised value in April and May. Independent appraisal review boards hear protests through July.
Tax rates set by city councils, commissioners courts, school boards and special units set their rates in August and September, and bills go out in the fall applying the new tax rates to the appraisal values set earlier in the year.
Even if a tax rate goes down it doesn’t necessarily mean that property owners’ bills will be lower as appraisal values grow across the tri-county area.
City of Presidio
Last Thursday, the City of Presidio approved its proposed property tax rate for the upcoming year. All council members voted in favor, minus Nancy Arevalo, who was unable to attend the meeting.
This year’s proposed tax rate represents an infinitesimal decrease from last year’s — $0.58126 per $100 of valuation, down from last year’s $0.581577. The owner of a home valued at $100,000 will see a decrease of less than a dollar.
Last year, homeowners enjoyed a tax rate decrease of about $13 from the previous year, but the price of a few cups of coffee could have a big cumulative impact on the budget. There’s a loophole in the state tax code that allows small cities to file as “special districts,” and can set their rates to the pre-HB 2 growth cap of 8% instead of 3.5%.
City Administrator Pablo Rodriguez said that the city was trying to do all they could to fill in the gaps — without impacting the city’s already cash-strapped residents. “We don’t want to overburden our taxpayers,” he said.
Property taxes alone are far from enough to keep the city in the black. Each year, the money the city makes off of its landfill pulls more than its weight to fill in the gaps in other parts of the budget. “At this point, the city is forced to do that,” Rodriguez said.
That’s cause for concern, as the landfill has been estimated to fill to capacity within the next ten years. Trying to get ahead of the problem, Rodriguez said he’d put out a request for quotes from engineering and architectural firms for the new landfill.
In the short term, the city has yet to present its proposed budget to the public, but Rodriguez anticipated there would be few changes from last year and expenses would stay roughly the same. The hearing to adopt the proposed tax rate will be held this upcoming Tuesday, September 3.
Presidio ISD
At last Wednesday night’s board meeting, Presidio ISD approved its proposed tax rate and budget for the upcoming year. This year’s budget will once again run a deficit, though smaller than previous years — over the past five years, the district hit a maximum deficit of around $3.5 million during the 2021-22 fiscal year. Last year’s deficit was around $3.1 million; this year’s will be around $2.3 million.
This year, the school district’s property tax will be around 80 cents per $100 of valuation for maintenance and operations and around 18 cents per $100 of valuation for debt service — around a 2.5% and .16% decrease from last year, respectively. The average homeowner will see a decrease in their bill by around $14.
The district’s board of trustees met with financial advisor Doug Karr over the summer to set priorities and make cuts where possible. Presidio ISD Superintendent Carmen Rubner characterized the crew as “very collaborative,” working together as efficiently as possible to make difficult decisions.
As a district in an extremely rural, impoverished area, Presidio ISD does face its own unique challenges. Teacher salaries are, on average, lower than comparable positions in nearby districts that enjoy a boost from the oil patch.
These low wages compound the district’s chronic struggle to recruit teachers to come live and work in the remote border town. Though teachers from the Philippines bring fresh perspectives to the district and passionate former Blue Devils have come home to fill crucial positions, Rubner would like to see a more level playing field across districts. “If I could wave a magic wand, I would say that we need to be able to take care of our people,” she said. “I really think the state should do everything in its power to pay teachers a professional wage.”
As a case study, Presidio ISD Chief of Police Joel Nuñez explained to the board of trustees that he was down an officer, which made increasing pressure from the state to perform additional administrative duties and complete additional training more difficult. His officers did receive a small raise this year, but he felt it wasn’t enough to compensate for the demanding job — and his district is ineligible for border security grants that have boosted law enforcement salaries elsewhere in the county. “School districts are on their own,” he explained.
While Nuñez and other district leaders’ wishlists will likely go unfulfilled without major legislative reform, Rubner wanted to emphasize that everyone in the community is welcome to participate in the budget-drafting process. At the end of the day, the focus is on making the most of every dollar. “We all need to work together as a community and as a school district to make sure that our kids get the best possible education they can get,” she said.
Marfa ISD
The Marfa ISD School Board met Tuesday night to hold public hearings on its budget and tax rate — no members of the public attended. The board commended district staff for its work in the past week scouring the budget for possible cuts in various programs, which resulted in $109,643 in savings, barely getting the district’s deficit below $1 million at $992,924.
While board members literally applauded that achievement, Board President Teresa Nuñez lamented that it was “sad” that the district had to be “happy” about that status.
“Somebody out there has to listen to us and do something about it,” said Board Member Rene Gonzales, commenting on Marfa ISD’s continual struggles to meet student needs and take care of its facilities with inadequate funding from the state.
Interim Superintendent Arturo Alferez said the recent round of cuts were minor in numerous places and didn’t impact instruction.“There were no cuts on the student side,” he said. The reductions included $125,000 saved by using the remaining state pandemic funding to fund a new air conditioning system for the cafeteria. The board recently rejected all bids on a new HVAC system — all came in around $300,000 — and will put out a new request for proposals and look at a new system going into the next budget year.
The board discussed the possibility of raising the interest and sinking (I&S) tax rate slightly to generate about $20,000 in revenue to pay off bond debt. However, the chief financial officer for the district, Rosela Rivera, said the district was in good shape retiring debt and said the board can evaluate the situation again next year to see if an increase is needed.
The board adopted a budget of $5.2 million in revenue and $6.3 million in expenditures, which includes an estimated $1.65 million recapture payment — funds the district sends to the state because it is considered to have “excess wealth” per student due to the combination of low enrollment and high property values.
The board ended up adopting the same tax rates as last year — .15465 for I&S and .6692 for M&O (Maintenance and Operations) for a total rate of .82385.
Alferez said the district isn’t making any decisions yet on how to cover the $992,924 deficit. Typically, the district would have to dip into its fund balance, or savings account, which stands at about $2 million and was boosted by $530,000 from the sale of the Blackwell School to the National Park Service. The district may also get additional revenue if it succeeds in garnering additional enrollment from early childhood education centers — something the interim superintendent is currently pursuing.