EPISD residents approve ‘penny swap’ to modify tax rate
UPDATE: Voters in the El Paso Independent School District approved a penny swap election to modify the school district’s tax rate.
ORIGINAL ARTICLE:
For the second time in three years, voters in El Paso Independent School District will be asked to approve what is called a “tax ratification election,” to make changes to the district’s tax rate. Under state law, it is considered a tax increase, but the real-life effect will be to leave the actual tax rate unchanged, regardless of the vote’s outcome.
It’s a confusing financial maneuver for many voters, especially because of the ballot language:
“Approving the ad valorem tax rate of $1.41 per $100 valuation in the El Paso ISD for the current year, a rate that is $0.0647 higher per $100 valuation than the school district rollback tax rate, for the purpose of generating additional state funding to support the district’s compensation plan as adopted annually including the one-time employee stipend in 2018-2019, to expand academic programming, and to supplement fund balance. In order to maintain the current tax rate, if voters approve the $1.41 tax rate, the board of trustees will reduce the interest and sinking rate by $.10, to reduce the total tax rate to $1.31, which is equal to the tax rate from 2017-2018.”
To help cut through voter confusion, Texas school districts refer to these elections as penny swaps – moving a penny from the district’s tax rate for debt, and adding it to the maintenance and operations portion of the tax rate. In the case of EPISD, we’re talking about moving 10 pennies on the tax rate.
The reason districts do this is that state funding formulas provide higher state matching funds for property taxes going to maintenance and operations rather than debt service. So making this change will allow EPISD to pull in more money overall, without requiring its taxpayers to pay more.
As complicated as this sounds, EPISD voters approved a similar swap by a wide margin in 2015, with 81 percent voting in favor. Voters in every precinct in the district overwhelmingly approved the idea, though the overall turnout in a special July election was only 5.5 percent of EPISD’s registered voters.
EPISD also successfully passed a $668 million bond issue in November 2016, winning approval from 55 percent of voters. Turnout in that election, which featured a presidential contest, was almost 50 percent.Although the bond passed by 10 points, 19 of the districts 91 precincts voted against the proposal. The opposition was concentrated in the West Side, Northeast El Paso and some Central pockets.
Things likely won’t be as easy this time. In 2015, the district was recovering from multiple scandals caused by prior administrations and school boards, and was rebuilding trust with the community. There was no organized opposition to the penny swap or the 2016 bond, and district administrators, school board members and supporters undertook an aggressive education campaign with voters on both issues.
For this penny swap, the district has done little to promote the measure. The district’s largest employee union, the El Paso Federation of Teachers and Support Personnel, is actively opposing the measure, citing a lack of confidence in Superintendent Juan Cabrera and the majority of the school board.
The board, which was unified during the 2015 and 2016 votes, is now deeply fractured. The divisions have been developing since the bond vote but accelerated during the spring primary campaign for Congress. Several trustees were supporting former board President Dori Fenenbock, while Trustee Susie Byrd was campaign manager for former County Judge Veronica Escobar.
Cabrera was accused of actively supporting Fenenbock’s campaign, which he denied. Escobar won the Democratic congressional nomination in a landslide, and the rift on the school board has continued to deepen.
The last time EPISD sought help from taxpayers while under a cloud of controversy was in 2010, when then-Superintendent Lorenzo Garcia and the school board asked voters to approve a property tax increase. State Sen. Eliot Shapleigh, who had accused Garcia of cheating on state accountability tests, was among those urging voters to reject the request. The tax increase proposal failed miserably in a June special election, with 68 percent of voters saying no.
Garcia was indicted on fraud charges a year after the failed tax vote. The school board was removed by the state education commissioner in 2013 for its oversight failures.
The controversy surrounding EPISD now is nowhere near the levels seen in 2010. But the district appears to be having a harder time connecting with voters than in 2015 or 2016, their most recent successful tax elections.
