SAN BENITO — The San Benito school district is mulling a historic feat.
On its finance committee, Chairwoman Janie Lopez wants to know if the school board could cut into the district’s property tax rate, which has stood at $1.30 per $100 valuation for about eight years — one of the highest among the area’s school districts.
“I requested staff look into cost savings, including a tax cut,” she stated Thursday.
In this city where residents make an average of $13,000 a year, a tax cut would lighten their burden, she said.
“Taxpayers, parents, and voters hold us accountable,” she stated. “As the vice president of the San Benito CISD school board and chairwoman of finance, I have a duty to ensure the district exerts fiscal responsibility on the usage of local, state and federal funds. We must provide a good quality education while not causing taxpayers an added burden due to wasteful spending.”
During a meeting, Lopez requested school attorney Steven Weller search for a financial advisor to conduct a feasibility study aimed at determining whether the school board could afford to trim the tax rate.
“I am requesting a feasibility study be conducted before we adopt a budget and tax rate this coming year,” Lopez stated. “I would like to hire an external company to perform a feasibility study to break down expenditures and revenues to know if we are managing our funds effectively and efficiently — or if we need to cut down on wasteful spending.”
Since 2012, the district’s expenses have climbed by $20.5 million, she said.
“The study (will) help us determine what economic opportunities we may proceed with to continue to ensure a quality education while maintaining necessary costs, like wages,” she stated.
Proposal facing opposition
However, school board members like Orlando Lopez stand against cutting the tax rate, noting the district’s dropped student enrollment amid the coronavirus pandemic.
Since the 2018-2019 school year, enrollment’s fallen from about 10,500 to 9,600 while the state pays the district about $5,500 a year per student based on a formula.
Cutting the tax rate would slash revenues funding students’ educations, Orlando Lopez said.
“We’re losing revenue and they want to lower revenue even more when our goal is to give students every opportunity they need,” he said.
Meanwhile, he described hiring a financial advisor as an unnecessary expense.
“It’s an additional expense that we don’t need when we have a CFO whose job is to assess the finances of the school district,” he said, referring to Vicki Perez, the district’s assistant superintendent of finance.
While board member Ariel Cruz also opposes cutting the tax rate, she expressed concern a feasibility study could delay the process of approving the district’s new budget in June.
“It’s really worrisome because it may affect our calendar for the budget for next year,” she said.
Amid falling enrollment, the American Rescue Plan Act’s Elementary and Secondary School Emergency Relief, or ESSER, grant money has been helping the district fund operations, she said, adding that 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 feasibility of cutting the tax rate, Perez told committee members during Tuesday’s meeting, adding officials expect to pay the firm $3,000 to $4,000.
“Right now, the scope would be offering alternative tax rates and what it looks like as far as impacting the district’s funding from the state,” she said.
During its presentation, the firm plans to review the potential impact of two state propositions on the November election’s ballot — one asking voters if they want to cut elderly and disabled homeowners’ taxes while the other possibly boosting the homestead exemption from $25,000 to $40,000.
If voters approve the propositions, they’ll cut into the district’s revenue stream.
“There are two propositions that are going to offer some tax relief,” Perez said. “That way you all are aware of what that looks like on that end and how that might impact the district.”
Search for financial advisor
In response to Lopez’s request, Weller said he would search for a financial advisory firm to conduct the feasibility study.
“The first step the district ought to take for examining a change in the tax rate might be whether the budget supports a change in the tax rate without creating affects that you don’t want to the district’s operations or funding levels from the state,” he said.
