San Marcos Mercury | Local News from San Marcos and Hays County, Texas

October 5th, 2010
Commentary: The ACC taxing district and taxpayers

Local Government Watch – Austin Community College District
by LAMAR W. HANKINS

One of the primary arguments in favor of the San Marcos Consolidated Independent School District (SMCISD) being annexed by the Austin Community College (ACC) taxing district is that the tax will not be very much, mere pennies a day for wonderful benefits. A close look at the ACC taxing district’s structure reveals why neither of these propositions may be true.

In 2011, if the annexation by the ACC taxing district is approved by SMCISD voters, ACC will take about $3 million from SMCISD taxpayers, based on the current ACC tax rate and taxable property value. The HEB Distribution Center alone would pay more than $80,000 in additional taxes. This is not the whole story on taxes. Just as important as this new tax on taxpayers is who will make the decisions about taxes and the educational benefits to be offered in San Marcos.

The ACC trustees will make them.  They control the amount of the tax levied annually, the amount of ACC indebtedness, and the use of the taxes levied.  No matter what the ACC taxing district service plan for the SMCISD provides, the ACC taxing district is under no obligation to follow it. The plan is no more concrete than is a politician’s promise.  In fact, the plan is so unimportant to the ACC taxing District that the SMCISD plan is copied from the Hays ISD plan, and ACC planners left in the HISD name in its fourth paragraph, overlooking the need to change it to SMCISD. (See the on-line version of the SMCISD service plan at the ACC website here).

Control by the Austin cabal of trustees means much more than the current tax rate, which was raised in August by ACC trustees. What they do in and for San Marcos, and how they do it, are even more important.

Financing facilities

In 2007, the ACC taxing district created the Austin Community College District Public Facility Corporation (PFC) to finance, refinance, provide, or otherwise assist in the acquisition of public facilities for use by the ACC taxing district. As stated in its Articles of Incorporation, the PFC “shall have and possess the broadest possible powers to finance or to provide for the acquisition, construction, rehabilitation, renovation, repair, equipping, furnishing and placement in service of public facilities of the System in accordance with the (Texas Public Facility Corporation Act).” The trustees of the ACC taxing district are also the Board of Directors of the PFC.

Under the authority of the Local Government Code, the PFC may issue bonds with the approval of the ACC taxing district trustees, that is, its own Board of Directors. No vote of the people living in the ACC taxing district is required before the PFC can issue bonds.  It is a wholly self-perpetuating and self-financing entity. The ACC taxing district, in turn, rents or leases facilities from its PFC.

Supporters of the annexation of the SMCISD into the ACC taxing district have pointed to the current low level of taxes currently required by the ACC taxing district–about 10 cents for each $100 of property value.  However, the ACC taxing district can increase its tax for both repayment of bonds and for maintenance costs up toup to $1.00 per $100 of property value–ten times what it is now. As the PFC builds new facilities in its planned far-flung empire, rents and lease obligations will increase, making increases in taxes inevitable. In 2010, the ACC taxing district and its PFC announced the acquisition of almost 400 acres of land in Leander, Elgin, Austin, Bastrop, and Kyle, at a cost of over $33 million. Its plans include buying more land in San Marcos and elsewhere at a cost of more millions.

In August, the ACC taxing district trustees raised its tax rate by a half-cent.  Earlier in the year, the ACC taxing district dropped part of an exemption for historical homes and increased tuition for its students. All three of these actions result in more income for the taxing district to offset declining property values as we enter the third year of a severe recession. At its whim, the ACC taxing district trustees can make other tax changes that could increase taxes for seniors and the disabled.

2010 expansion of ACC taxing district

Remarkably, the ACC taxing district is attempting to expand into five more school districts this fall. They include SMCISD, Hays CISD, Bastrop ISD, Elgin ISD, and McDade ISD. The reason for this expansion may be found in a report issued in 2008 by the Austin Chamber of Commerce in its Austin Community College Progress Report: “To avoid the possibility of ACC facing severe fiscal constraints…the Metro Austin business community should strongly consider supporting thoughtful efforts to expand ACC’s taxing district.”

There it is in a nutshell. The ACC taxing district needs to expand its tax base in order to overcome perceived fiscal problems. And those problems are perceived, not by anyone in San Marcos, but by the leaders of the Austin business community. The ACC taxing district needs an additional $3 million from SMCISD taxpayers to stay out of trouble.

According to the best information available and obtained through Public Information Act (formerly the Open Records Act) requests, in the fall of 2009 there were 757 students taking ACC courses here in San Marcos at facilities rented from SMCISD. As many as 50 may be SMCISD graduates.  Most of the rest were Texas State University students trying to get transfer credits from ACC and high school students taking ACC courses for dual credit–to receive both high school credit and community college credit for the same course.

The $3 million in new taxes the ACC taxing district will receive from SMCISD taxpayers if the area is annexed represents about $60,000 per current SMCISD graduate who is attending ACC. If each one paid out-of-district tuition for a 15-hour course load, the cost would be just over $2,000 per semester; $4,000 for a full year. At that rate, our $3 million per year would pay for 750 full-time SMCISD graduates to attend ACC at the out-of-district tuition rate, or over 2,500 students at the in-district rate. But there is no demand by those numbers of SMCISD graduates to attend ACC. The main beneficiaries of annexation, with its reduced tuition, are Texas State University students looking for transfer credits.

The use of SMCISD classrooms in the evening when most ACC courses are offered is a good use of existing public facilities, and does not add to the burdens of SMCISD taxpayers. As a longtime taxpayer in SMCISD, whose daughter graduated from SMHS, I would rather pay an additional 10 cents per $100 of valuation on my property to improve the SMCISD schools, rather than give that money to an unaccountable entity based in Austin, which could be offering significant vocational education to SMCISD students and graduates now, without annexation, as the Alamo College system does for Seguin and New Braunfels students, though those two school districts are not annexed into the Alamo system. The ACC taxing district has no interest in helping SMCISD graduates unless it can get its institutional hands into our pockets by collecting an additional tax each and every year forever.

In a subsequent column, I will describe more academic and vocational opportunities that SMCISD graduates could use and look at how and whether the ACC taxing district will provide those opportunities.

© Lamar W. Hankins, Local Government Watch–ACC Taxing District

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11 thoughts on “Commentary: The ACC taxing district and taxpayers

  1. What a great article. Thank you for bringing this to everyones attention.

    High school students can take two ACC courses per semester in both their junior and senior years for free now, just like in-district students.
    ACC funds Early College Start through its budgeting process and receives state funding for high school students enrolled in the program. Why Tax us more?

    They charge the same for continuing education classes for everyone whether in-district or out-of-district. Why tax us more?

    Texas education code allows for our students to receive in-district tuition if we allow ACC to use our facilities. Why tax us more?

    Why assume their massive debt, and let them issue more attached to our property?

  2. Someone needs to look into the finances of ACC. How can this community college taxing districts debt balloon to over $444 million dollars? Who is minding the “store” when it comes to the apparent spending spree this organization is on? They are handing out an additional tens of millions of dollars to purchase land, build additional facilities and etc. Is there a limit to the debt ACC can acquire?

    What if due to the continued sagging economy, enrollment falls off. It is bad enough our local ISD’s are drowning in debt as is our nation. Do you really want to pick up more? Who will pick up the slack? Who will pay off this massive debt? Go look in the mirror and say; “I will.” acctaxfacts.com

  3. This is great information Lamar.

    I am not so sure that I am on board with not allowing ACC’s finely tuned education machine to operate in Hays County. I recently attempted to go back to school at Texas State University (TSU) and was shocked by the costs. I had to put off my education. When I compare spending $1200 a year for 15 semester hours (this includes real estate taxes) versus $8000 a year (this does not include the real estate taxes) I can hardly justify not encouraging ACC to “do the right thing” here.

    I would like to take some of the courses they offer and although their out-of-district rates are still half of what TSU charges it is above my financial abilities. I am looking forward to having inexpensive alternatives and I believe that the number of continuing education, high school and TSU students would rise dramatically once ACC is operational. I also believe ACC’s diverse educational choices are the best in Texas.

    I personally don’t mind paying more taxes for education and have felt our country as a whole has been unwise, to say the least, to spend so little. We spend more on defense than education; one of only a handful of countries that do.

    I like knowing all the facts and I appreciate any watchdog efforts for insuring fairness and above-board play by any organization, so thank you. At the same time, I am excited about investing a little over $100 a year to save $7000 and to contribute to making many other’s educational beginnings a reality.

    I invite other thoughts on the ACC issue.

  4. This is great information, Lamar.

    I am not so sure that I am on board with not allowing ACC’s finely tuned education machine to operate in Hays County. I recently attempted to go back to school at Texas State University (TSU) and was shocked by the costs. I had to put off my education. When I compare spending $1200 a year for 15 semester hours (this includes real estate taxes) versus $8000 a year (this does not include the real estate taxes) I can hardly justify not encouraging ACC to “do the right thing” here.

    I would like to take some of the courses they offer and although their out-of-district rates are still half of what TSU charges it is above my financial abilities. I am looking forward to having inexpensive alternatives and I believe that the number of continuing education, high school and TSU students would rise dramatically once ACC is operational. I also believe ACC’s diverse educational choices are the best in Texas.

    I personally don’t mind paying more taxes for education and have felt our country as a whole has been unwise, to say the least, to spend so little. We spend more on defense than education; one of only a handful of countries that do.

    I like knowing all the facts and I appreciate any watchdog efforts for insuring fairness and above-board play by any organization, so thank you. At the same time, I am excited about investing a little over $100 a year to save $7000 and to contribute to making many other’s educational beginnings a reality.

    I invite other thoughts on the ACC issue.

  5. Like investing in Bear Sterns right before the crash I geuss. Thank you for clarifying the issues for me. Do you think Victoria College or San Antonio College or St Phillips College would offer a better package? Or do we just not need a taxing district for community college? If Texas college enrollment rates are to increase as projected, we will need more education resources. I can see TSU becoming a two year senior college and having feeder schools get the pre reqs out of the way. That way TSU could stay at 35,000 or whatever its enrollment. Community colleges could pick up the other 35,000 freshmen and sophmores.

  6. Lynny,

    You wrote:

    “I like knowing all the facts and I appreciate any watchdog efforts for insuring fairness and above-board play by any organization, so thank you. At the same time, I am excited about investing a little over $100 a year to save $7000 and to contribute to making many other’s educational beginnings a reality.”

    Wow, obviously you need the benefit. Your math leaves much to be desired, as does your intent. You seem to feel that it is OK to pay a bit more in property taxes for YOU to get a large benefit. Really, you are asking all of your neighbors to pitch in because you could not get into a real college. Do you want a Ferrari, also?

    Many of us do not feel the community should pay millions for a few to have the reduced tuition for ACC. If more people would pay their own way, there would potentially be a higher graduation rate (skin in the game). Research the graduation rates of mommy-funded vs. self-funded education. Self-funded will always win! Loans, grants, JOBS, mommy are all easily obtained funding options. Other options include: military, trades, JOB, or just working up the ladder. You and your cardboard sign (asking me for money) are reprehensible.

    DM

  7. I hate it that so few people these days actually take the time and make the effort to see past the headlines. The buzz in Kyle is “WOW – our kids will have ACC without having to drive to Austin!” I’ll bet that 90% of the taxpayers are not aware of the high cost for such a limited benefit. People hate to take a position “against the children”. The Kyle taxpayers just don’t understand what is happening here, and they will not stand in opposition. This mess will go forward. I’ve tried to explain the problems to my wife and even she will not hear me. We have a young grand-daughter Buda and my wife only hears the blah put forward by ACC and the locals who support the ACC position.

  8. In a conversation I had with Dr. Kinslow, President of ACC, after our “public hearing,” he said that the campus would be a small one for core classes only. That means that students will still drive to Austin for most of their classes. And will you even get a campus so the students can at least take a few classes near home? Del Valle was annexed three years ago and they haven’t got one yet. The service plans are identical for all the annexations. They are just that – plans. They aren’t contracts that must be kept.

    According to the ACC website, they only have a 4% graduation rate. For a two-year college that’s not too good. Check on the ACC website for their March 2, 2003, board minutes to learn why they have such high out of district tuition. They deleted wording from their District Mission that says their high out-of-district tuition was discouraging students from attending rather than encouraging annexation.

    Out of 50 community colleges, 17 have the same tuition for both. Of the rest, Alamo Community College in San Antonio has the second highest difference of about $600. The highest? ACC – for 12 credit hours in-district is $504 and out of district is $1,800! That’s more than double Alamo’s.

    As to other community colleges coming to our service areas – they can’t. Not unless ACC gives them permission. The Legislature in its wisdom set certain ISDs as “service areas” for the various community colleges. No other can come unless the “host college” gives permission. You think ACC would? I don’t.

    The few parents whose children attend ACC have tuition for a year or two. They can get grants, loans, and scholarships to help pay for it just like the parents who send their children to other colleges. Those parents and students will have the loans paid off in a few years and that’s the end of it. Taxes on every piece of property will go on forever – even if there are no students from an ISD entering ACC. That’s $2 to $3 million a year ACC will be receiving from each one. And only 4% graduate.

    ACC needs these annexations to meet their budget – $235 million this year with a debt of $444 million. We don’t need to be part of this.

  9. The HOA Newsletter for the Plum Creek subdivision in Kyle came out last week, and it contained a front-page article that essentially put forth the idea that the tax annexation for ACC is a great idea. I emailed the Newsletter’s editor, and she replied that she was not aware that there was any opposition to the ACC annexation, and therefore did not publish anything that was contrary to the article’s premise. It is too late for that monthly newsletter to publish again prior to the election on November 2nd. Shame.

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