Schools looking for a financial advisor; officials call for tax cut study

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SAN BENITO — The San Benito School District is planning a historic feat.

On her finance committee, Chair Janie Lopez wants to know if the school board could lower the district’s property tax rate, which has been at $1.30 per $100 of assessment for about eight years — l one of the highest among school districts in the region.

“I have asked staff to look at cost savings, including a tax reduction,” she said Thursday.

In this town where residents earn an average of $13,000 a year, a tax cut would ease their burden, she said.

“Taxpayers, parents and voters hold us accountable,” she said. “As Vice President of CISD San ​​Benito School Board and Chair of Finance, I have a duty to ensure that the district exercises fiscal responsibility over the use of local, state and federal funds. We need to provide good quality education without placing an additional burden on taxpayers through unnecessary expense. »

In a meeting, Lopez asked school attorney Steven Weller to seek out a financial adviser to conduct a feasibility study to determine if the school board could afford to lower the tax rate.

“I request that a feasibility study be conducted before adopting a budget and a tax rate this coming year,” Lopez said. “I would like to hire an outside company to do a feasibility study to break down expenses and revenues to see if we are managing our funds effectively and efficiently – or if we need to cut unnecessary expenses.”

Since 2012, district spending has soared by $20.5 million, she said.

“The study (will help us) determine what economic opportunities we can pursue to continue providing quality education while maintaining necessary costs, such as salaries,” she said.

Proposal in the face of opposition

However, school board members like Orlando Lopez oppose the tax rate cut, noting declining student enrollment in the district amid the coronavirus pandemic.

Since the 2018-19 school year, enrollment has grown from about 10,500 to 9,600 while the state pays the district about $5,500 per year per student based on a formula.

Reducing the tax rate would reduce income funding student education, Orlando Lopez said.

“We are losing income and they want to cut their income even more when our goal is to give students all the opportunities they need,” he said.

Meanwhile, he described hiring a financial adviser as an unnecessary expense.

“It’s an extra expense we don’t need when we have a chief financial officer whose job it is to assess school district finances,” he said, referring to Vicki Perez, deputy superintendent of finance. of the district.

While council member Ariel Cruz also opposes the tax rate cut, she expressed concern that a feasibility study could delay the approval process for the district’s new budget in June. .

“It’s really worrying because it could affect our timeline for next year’s budget,” she said.

Amid declining enrollment, the American Rescue Plan Act Elementary and Secondary School Emergency Assistance, or ESSER, helped the district fund operations, she said, adding that the money runs out in 2024.

Preliminary financial review called

Now officials are waiting for Moak Casey & Associates, an Austin-based financial advisory firm, to present officials with preliminary information on the possibility of lowering the tax rate, Perez told committee members at Tuesday’s meeting. , adding that officials expected to pay the company $3,000. at $4,000.

“Right now, the scope would offer alternative tax rates and what that looks like in terms of the impact on state funding for the district,” she said.

During its presentation, the company plans to examine the potential impact of two state proposals on the November election ballot – one asking voters if they want to cut taxes for elderly and disabled homeowners, while the other could increase the homestead exemption from $25,000 to $40,000.

If voters approve the proposals, they will reduce district revenue.

“There are two proposals that are going to provide tax relief,” Perez said. “That way you all know what that ending looks like and how it could impact the district.”

Looking for financial adviser

In response to Lopez’s request, Weller said he would seek a financial advisory firm to conduct the feasibility study.

“The first step the district should take in considering a change in the tax rate might be whether the budget supports a change in the tax rate without creating effects you don’t want on district operations or state funding levels,” he said.

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