McLennan Community College trustees intend to maintain the district’s present tax rate, though higher property valuations will mean a bump in taxes for many taxpayers.
Trustees voted unanimously Monday night to keep the tax rate at 14.77 cents per $100 of property value to fund a proposed $58.4 million budget for the 2019-20 fiscal year.
The owner of a $189,150 home would see an increase of $18.40 in annual taxes despite the unchanged rate, because of an increase in the appraisals of properties MCC taxes.
Public hearings on the proposed tax rate and budget will take place at 6 p.m. Aug. 14 and 19 at MCC’s Northwood House, 1609 College Drive. Trustees will hold a final vote on the tax rate Aug. 27.
At the board’s Monday night meeting, vice president for finance and administration Stephen Benson provided an overview of the college’s proposed 2019-20 budget, which sees a continued increase in faculty and staff salaries to bring them to market level. He also compared how various tax rates above the effective rate would affect the budget. The effective rate is the rate that would bring in the same revenue as last year’s rate.
Board Chairman K. Paul Holt asked Benson to prepare five scenarios of differing increases above the effective tax rate, from a low of 3.5% to a high of 7.99%, the maximum increase allowed before the possibility of a voter rollback election. A 3.5% increase would cause an almost $1 million budget shortfall, while a 7.99% one would see a $962 shortfall. A 7.78% increase, the level of the current tax rate, would have a $41,890 shortfall.
Benson pointed out that while the Legislature provided MCC $157,255 more in revenue this year, it also changed the contribution required for the Teacher Retirement System, with MCC paying $85,000 more for that expense.
Although the state Legislature exempted community colleges in mandating a 3.5% cap on annual property tax revenue increases for cities and other taxing entities in the recent session, Holt said trustees should consider a future where legislators include community colleges in their pressure on cutting property taxes.
By opting for the maximum tax rate under the 8% cap, trustees could trigger “a sense of retribution” from legislators, he said.
“We’re going to guarantee getting busted back in the next legislative session,” Holt said.
While acknowledging legislators’ focus on property taxes, some trustees disagreed with the suggestion to cut now when the Legislature had permitted the 8% cap to continue.
Trustee Doug McDurham said MCC does not have a sense that other community colleges would follow suit, much less an idea of what legislators would do in the future.
Trustee Earl Stinnett pointed out that the board approved a three-year plan last year to bring faculty and staff salaries in line with the market average and said the board needs to stick to that plan.
Trustee Ricky Turman said MCC should seek as much as it can without changing the tax rate, but cautioned that the board needs to take a hard look at continuing budget deficits. MCC President Johnette McKown said the issue of budget deficits could be addressed in an upcoming long-range planning retreat.
Asked which of the five scenarios she would recommend, McKown said those 7.5% and higher would cause less budget distress, while the 3.5% scenario would be “incredibly challenging.”
The board later voted unanimously to move forward with a proposal to maintain current tax rate. That rate would bring a 7.78% increase in revenue.