Sherman residents could see a slight savings on their tax bill starting next year. The Sherman Independent School District tax rate is 10 cents less than last year.
The property tax rate is expected to be $1.5473 per each $100 of assessed value for the 2019-2020 fiscal year.
Here are three things to know about the rate approved during Monday’s school board meeting:
1. District expected to maintain rate
The district initially posted in June that the rate would remain at the 2018-2019 level of $1.649 per $100 of value. However, a new law that was passed soon after mandated that district’s lower their M&O rate in what SISD officials referred to as property tax compression.
2. Tax reform offers relief
Earlier this summer, state legislatures passed long expected property tax reforms that came in the form of House Bill 3. The legislation placed limits for the next two years on a district’s maintenance and operation rate, which alongside the debt service rate makes up the full tax rate. The same legislation recent put caps on how much additional revenue municipalities can earn from existing property each year without approval by vote.
In exchange, this loss in revenue would be offset by increased state funding. For the district, this equates to a projected $5.8 million revenue increase, district officials said.
3. Long term caps
Once the current tax relief ends in two years, it will be replaced by a cap that will place a 2.5 percent limit on the additional revenue that a district can receive from existing property. Once this is in place, districts will need to expore additional revenue streams, officials said.
What do you think about SISD’s 2019-2020 tax rate? Let local government reporter Michael Hutchins know at MHutchins@HeraldDemocrat.com.