Local Government Watch – Austin Community College District: A column
by LAMAR W. HANKINS
Allen Kaplan, Vice Chair of the ACC Board of Trustees, has published a letter trying to correct what he calls “assertions that are clearly false” in an article I wrote that appeared in The Mercury last week. But many of his points serve to create only more confusion. Trying to clarify the relevant facts about the proposed ACC taxing district (the terminology used by ACC in the minutes of meetings of its Board of Trustees) is indeed difficult. There is no single reference available to fact-check assertions made by either annexation proponents or opponents. What I have learned about ACC’s tax rates over the years, I gleaned from the minutes of their board meetings. Some other facts are more difficult to determine, but I offer the following analysis based on the most reliable data I could find.
Since 1980, community colleges in Texas have steadily depended more and more on local taxes to pay their costs. In 1980, local taxes made up 16 percent of all community college revenues. In 2010, that percentage is estimated to have increased to 42 percent. Tuition too has increased in the last thirty years, from 16 percent of community college revenues to 27 percent. Only state support for community colleges has decreased during the past thirty years, from 68 percent in 1980 to 31 percent as projected in 2010. With state support decreasing dramatically, future costs will be born by students and local taxpayers.
Taxing authority found in Texas law
The ACC taxing district is permitted by the Texas Education Code to issue a variety of bonds, including tax bonds (repayable through taxes; also termed negotiable coupon bonds). The annual bond tax rate may not exceed 50 cents per $100 of property value. An annual maintenance tax also may not exceed 50 cents per $100 of property value, for a total maximum tax permitted by law of $1.00 per $100 of property value.
This annual maintenance tax may not be levied unless “authorized by a majority of the electors voting at an election held for such purpose.” This entire process, except for the voting by electors, is controlled by the ACC taxing district Board of Trustees as provided in section 130.122, Texas Education Code: “Each such election shall be called by resolution or order of the board, which shall set forth the date of the election, the proposition or propositions to be submitted and voted on, the polling place or places, and any other matters deemed necessary or advisable by the board. … The board shall canvass the returns and declare the results of such election.”
Recent history of ACC taxation
For the Fiscal Year 2004 (FY2004), the ACC taxing district’s tax rate was raised by its Board of Trustees from 5 cents to 7.71 cents per $100 of property value. This increase included 7 cents for Maintenance and Operations (M&O) and .71 cents for Debt Service. The FY2005 tax rate was set by the ACC Board of Trustees at 9 cents. The tax rate for FY2006 was set by resolution of the ACC Board of Trustees at 9.91 cents per $100 of property value. Nine cents was for M&O and .91 cents was for debt service. The tax rate was decreased by 2.6 percent for FY2007. The FY2008 tax rate was again slightly reduced, by 0.7 percent, to a total of 9.58 cents. Again for FY2009, the tax rate was slightly decreased by 0.4 percent to 9.54 cents. The FY2010 tax rate was set at 9.46 cents, another slight decrease of 0.8 percent. For FY2011, the tax rate is set at 9.51 cents.
Apparently, the maximum M&O tax rate is 9 percent without seeking further voter approval, though I have not been able to confirm this figure by reference to any legal document. The additional tax rate for Debt Service will fluctuate depending on how much money is needed to pay for the tax bonds that have been previously issued.
To pay for M&O costs, the ACC Board of Trustees have several choices: raise the tax rate, raise student tuition, raise student fees, reduce taxable property exemptions (now available for seniors, the disabled, and once available for those in historic districts), or convince the Texas legislature to appropriate more money for community colleges (which is not likely).
Undoubtedly, raising tuition and fees and reducing tax exemptions will be the ACC board’s preferred alternatives, followed by seeking voter approval for higher taxes. If voter approval for a tax increase is sought by the ACC taxing district, the Austin voters will overwhelm those in the SMCISD. If all the annexations scheduled for a vote on Nov. 2 pass, SMCISD voters will make up less than 10 percent of the ACC taxing district voters, most of whom are in Austin and Travis County, followed closely by those in Williamson County. That cohort will decide the tax rate for the ACC taxing district, leaving SMCISD voters with no chance to make our voices heard over the din north of us. This may not be taxation without representation, but it is closer to it than I ever want to get.
Allen Kaplan wants us to look at what the ACC taxing district did in Round Rock ISD after it was annexed just over two years ago. He claims that ACC fulfilled every promise made. That may be true. But there is a big and important difference between the SMCISD and the Round Rock ISD. Round Rock ISD is contiguous to the ACC taxing district and is an integral part of the Austin economy. Round Rock, Pflugerville, and Austin have grown together to become one large metropolitan area. These factors are not true for SMCISD. San Marcos remains an independent community, influenced much less than is Round Rock by our giant neighbor 28 miles to the north of us. As part of the same metropolitan community, the Round Rock economy is much more aligned with Austin than is the San Marcos economy.
It does not surprise me that the ACC taxing district built a large and diverse campus in the Round Rock ISD, which has a student enrollment nearly three times that of SMCISD. Its student enrollment is 80 percent the size of the entire population of San Marcos. The estimated population of Round Rock is nearly twice the size of the estimated population of San Marcos. Demographics alone make the Round Rock ISD a more attractive area in which to develop a well-rounded ACC campus. But it is unlikely that an ACC taxing district campus in San Marcos will offer the kinds of vocational training that SMCISD graduates need and want because the ACC taxing district has not carefully studied our needs, preferring to copy the SMCISD service plan from the service plan for Hays ISD and the other school districts it is trying to annex on Nov. 2.
I would like to have confidence in the Austin-area trustees of the ACC taxing district to do right by San Marcos, but our history with the ACC taxing district (the difficulty in getting coherent and direct answers to questions, the inadequate explanations for the criminality of the petition process four years ago, the lack of legally enforceable commitments by ACC to the SMCISD, the documentary evidence that it needs the taxes that can be raised in the SMCISD for its own fiscal health) does not suggest that it will be transparent to us, honest with us, and willing to meet the unique needs of our high school graduates. Though it could long ago have met the needs of our graduates without annexation, it has not done so for the last 36 years.
There is no reason why I or anyone else who lives in the SMCISD should be willing to accept the word of one of its trustees or its overpaid President that it will treat San Marcos people right. If anything, our voters should be skeptical of this tax-seeking monolith to the north.
© Lamar W. Hankins, Local Government Watch–ACC taxing district