Understanding Your Tax Rate:

School districts main funding comes from local property taxes collectected within the districts boundaries. The value of your home is determined by the county apprasial district and a percentage is paid on that value as taxes. For school districts this is seperated into two parts called Maintenance & Operations (M&O) and Interest & Sinking (I&S).  The M&O portion of the budget or “bucket” covers salaries, utilities, and day-to-day operational costs. I&S funds are strictly for repaying debt from approved bond projects. Districts call a bond election that is voter approved before funding facility improvements, land acquisition, and equipment for the growing student populations needs.

Did You Know?

The ECISD School Board voted to approve a reduction of next years tax rate by $0.16 from $1.1779 to $1.014. The average home valued at $200,000 in Ector County will see a savings of $798 next year with all exemptions applied including the $100k homestead.



Maintenance & Operations

(day to day operations & expenses)

Staff salaries/benefits, student educational resources, classroom supplies/equipment, portable buildings, utilities, and insurance.

Interest & Sinking

(principal and interest payments on debt issued)

Payment on Voter Approved bonds sold for construction and capital improvements of facilities including: new construction, renovations, heat/ventilation/air conditioning systems, roofing, technology.

I&S Tax Rate of Peer Districts Compared to ECISD I&S Voter Approved Tax Rate

The State Attorney General will not approve a bond issue that is projected to result in an I&S tax rate above $0.50

A new state law requires all school bond propositions include ballot language that reads, “This is a property tax increase.” Passing this bond will not increase your current school district tax obligation for your property taxes but must be included due to more debt being taken on for a longer term by the district.

Voting Yes for the ECISD bond will not have an impact on the new lowered rate of $1.014 that the ECISD Board of Trustees voted to approve on Septemper 19th.

Did You Know?

The ECISD Bond package would result in an overall tax bill decrease due to the Homestead Exemption. With no increase in the current Voter Approved Tax Rate homeowners now enjoy a $100k Homestead exemption.

These new savings have already been applied to your upcoming property taxes and can be checked here.

Paying Down Past Debt

Since 2020, ECISD has made early payments of $37.3 million in existing bonds, and by prepayment and refinancing, eliminated $26.9 million in future interest payments. Based upon the district’s existing tax base, the district would not need to increase the total Voter Approved Tax Rate of $1.17792 to pay the $436,109,000 of bond projects.

On September 19th the ECISD School Board voted to approve a decrease in the Tax Rate by $0.16 from the Voter Approved Rate of $1.17792 to $1.014 which will result in the average homeowner saving $506 in property taxes this year. The board also voted to approve pre payment on past bonds in the amount of $34,435,000 that will save the district an additional $6.1M in interest. This is on top of the $37.3M made since 2020 that eliminated $26.9M in future interest. Changes will be reflected in November when ECISD provides their updated financials that are currently being finalized for public release.  

Since 2019/2020 ECISD has decreased the debt by 16.7% where the prior 4 years little was paid towards the principal and mostly went towards interest. ECISD was able to gain an A+ financial rating for four straight years by paying down debt faster but the state also requires a minimum reserve of cash on hand to meet expenditures. Not only did ECISD pay down debt at an expedited rate since 2019 but also increased their cash reserves by $21.3 million or 23.9%, required by guidelines, in that time. A pretty impressive job for an area relying so heavily on the sales of oil and gas where COVID and continued lockdowns put a damper on pricing for a period of this time.

Tax Compression Details

House Bill 3(HB3) by the Texas Legislature is an attempt to increase funding and equity for districts with less resources and higher poverty rate such as ECISD where more than 60% of the students live in a home below the poverty line. HB3 1.040 amends the statute for previous years property values by redirecting funding to the basic allotment and now a $100k homestead exemption is applied for Texas ISD rate so the first $100k of value on your home is exempt from the property tax rate. Recapture calculations were amended to ensure that no district has funds recaptured below their entitlement based on the state formula(1.041, 1.018, 1.049).

There are some other changes that help protect property owners from tax increases such as the Board of Trustees is now required to do an efficiency audit before bringing a Tax Ratification Election(TRE)(1.001) and add language to the bond ballot stating ‘This is a property tax increase'(1.008) to make it more clear for the voters. There are also provisions that make the reinforcement of Maintenance and Operations funds(M&O) swapping with Interest and Sinking(I&S your bond debt) illegal(1.006, 1.007). This part is very important as this is what is being claimed in reference to ‘theft’ on the tax compression. The claim is that the boards of these districts across Texas did this in a deceitful way by not telling the public what they were doing but in reality a meeting was held, the public was notified, a presentation was done and live streamed, and the community had the opportunity to present public comment. This video here is from June 21, 2022 where item 13B was discussed to request approval of a resolution to calculate the property tax rate, the same process done every year.

The great thing about government entities requesting you to fund them through your taxpayer money is their budgets are usually available online and there is a large sense of transparency. In the example of Ector County  this PDF shows the slides presented in the budget presentation outlining how the district calculates the Voter Approved Tax Rate of $1.17792 that has been the same for now 5 years.

The compression of M&O is made on the basis of a predetermined equation that can sound complex but TEA has made publicly available an excel sheet of every districts calculations with a drop down to verify what certain districts did. There’s a lot of definitions in there that can be a bit confusing such as the Voter Approval Tax Rate, below highlights the definitions of each.

The State Comptroller also helps define how the M&O and I&S should be handled by the school district where they state ‘The school district’s current debt rate is then ADDED to equal the school district’s VOTER-APPROVAL RATE’ after using their equations for calculating the new M&O. ECISD took the guidelines provided by the Texas Legislature and the Texas Comptroller utilizing their formulas and worksheets to find the current tax rate that was voted on by citizens of the county.

Primarily due to lower Oil and Gas values, ECISD’s taxable assessed valuation dropped by more than $2.4 billion (17.5%) between 2014-15 and 2016-17. During that same period student enrollment increased to over 31,400 (2%). Today ECISD enrollment is more the 33,467 students.