Trustees adopt a lower tax rate

The Board also authorizes early bond payments that will result in future taxpayer savings of $14.9 million 

The Midlothian ISD Board of Trustees adopted the annual Maintenance and Operations (M&O) and the Interest and Sinking (I&S) tax rates at its August 21 board meeting. The approved total tax rate is $1.1092, which is the sum of $0.6692 for the Maintenance & Operations tax rate and $0.44 for the Interest & Sinking tax rate per $100 valuation. These tax revenues provide approximately 43 percent of the school district’s operating revenues and the necessary funding for debt service expenditures that include school building bonds. 

The adopted 2023-24 total tax rate is $0.1854 lower than last year’s total rate. This is a 16.7 percent decrease from last year’s rate. 

The decreased MISD tax rate is attributed to the M&O compression at the state level. The Texas Education Agency issued a $0.0784 Maximum Compressed Rate and, in the July 2023, Special Legislative Session the State further compressed tax rates by $0.107. 

Growth Management: MISD sustainably plans for future enrollment 

Setting an annual tax rate impacts a district’s future bonding capacity. Trustees also approved an order of early defeasement at the August 21 board meeting to make early payments toward the district’s bond debt. Early defeasement reflects a commitment to fiscal stewardship and responsible financial planning. By retiring debt ahead of schedule, MISD reduces its long-term financial liabilities and avoids unnecessary interest payments. Maintaining an I&S tax rate of $0.44 per $100 of valuation for the 2023-24 fiscal year means MISD can defease $14,750,000 thereby saving taxpayers approximately $14,994,800 in future interest costs. The steady I&S tax rate also impacts MISD’s bonding capacity and increases it to $425,490,000. Dropping the I&S tax rate for the 2023-24 fiscal year would have negatively impacted the district’s bonding capacity and potentially reduce its credit rating. 

Please note that the State of Texas "Truth in Taxation" rules require taxing entities like MISD to compare their proposed rate against what is called the "no new revenue tax rate." This is the tax rate that would produce the same tax revenue in the coming year as was available in the prior year. The no new revenue rate for MISD is $1.107145, which is $0.002055 lower than the adopted 2023-24 tax rate.