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Taxpayer watch dogs sniff out $10M covert tax hike

Revised figure puts Round Rock ISD within tiny fraction of triggering tax rate approval election – ‘a mockery’

Revised figure puts Round Rock ISD within tiny fraction of triggering tax rate approval election – ‘a mockery’

ROUND ROCK, Texas – Taxpayer watch dogs are sounding the alarm as a significant increase in the Round Rock ISD’s “No-New Revenue” (NNR) rate was made by the Williamson County Tax Assessor-Collector when compared to the NNR rate on the Travis County Tax Assessor-Collector’s website.  

The resultant rate hike – nearly the maximum allowed by state law before a tax rate election is triggered –- gives the district the ability to collect almost $10 million in additional tax revenue.

Under a 2019 law intended to limit tax increases, If the Travis NNR is correct, the district would need five Trustees to approve the tax increase; if the Williamson NNR is correct, only four Trustees are required to approve it. The 2021 tax revenue increase which passed Sept. 14 had only four of seven Trustees voting in favor.

On Friday (Jan. 21), Williamson County’s 425th District Judge Betsy Lambeth heard arguments regarding the Travis County Taxpayers Union lawsuit concerning the Round Rock ISD Board’s Sept. 14, 2021, approval of the tax revenue increase. The tax hike was originally approved with limited public access (district leaders claimed that seating was reduced for COVID-19 safety purposes even after the Texas Attorney General, in an early September 2021 letter, specifically said districts were no longer allowed to violate TOMA provisions for COVID reasons).  RRISD taxpayers Dustin Clark — and Jeremy Story, for a separate incident — were falsely arrested days after being prevented by RRISD Police from lawfully participating in the meeting room. The tax revenue increase was approved even after RRISD student enrollment dropped between 2020 and 2021 (5.2%, or -2,652 students according to TEA website data). 

On Friday morning, Round Rock ISD’s lawyers presented a sworn statement from Williamson County Tax Assessor-Collector Larry Gaddes with a revised “No-New Revenue Rate” (NNR) rate that is dramatically higher than the NNR the school district previously published on the Travis County Tax Assessor- Collector’s website. Gaddes said his calculation was ”true and correct,” while at the same time he said he was unsure about calculation details approved by the Texas Legislature via 2019’s Senate Bill 2. 

The NNR which the district submitted to the Travis County Tax-Assessor Collector, still visible on the official website, and applied to RRISD residents in Travis County, was 1.1120 cents per every $100 worth of appraised property. According to lawsuit exhibits, Williamson County’s Gaddes calculated the NNR at 1.153807. The difference allows the RRISD to raise around $10 million in additional tax revenue without voter approval, and without the 60% majority of Board members as required by law.  

This also means that the Williamson County-approved NNR is now within a tiny fraction (0.2%) of the threshold of a 2.5% tax rate increase that would trigger a voter referendum under SB 2.

“This makes a mockery of the 2019 Texas Legislature’s 2.5% tax levy increase cap for school districts and is an insult to the voters who sent a majority of legislators to Austin to fight for tax reform,” said Don Zimmerman, Travis County Taxpayers Union (TCTU) executive director. 

A sworn statement from now-suspended RRISD superintendent Hafedh Azaiez claimed that the district was unaware that the NNR which the district submitted to Travis County Tax Assessor-Collector “contain[ed] inaccurate information concerning the No-New Revenue rate for our district.” Gaddes stated “Round Rock ISD submitted a form to the Travis County Tax Assessor/Collector that contained an incorrect number for its No-New Revenue tax rate.”

Gaddes further stated “My certification establishes the No-New Revenue rate for Round Rock ISD … The correct No-New Revenue rate for Round Rock ISD, calculated by my office, is $1.153807 per $100.00 valuation” and “the No-New Revenue rate can be correctly calculated using the tax rate calculation worksheet, form 50-859, provided by the Office of the Texas Comptroller.” But he also said two paragraphs later “My office does not calculate the NNR M&O rate for school districts within Williamson County, and that value is not computed through use of the Comptroller’s form 50-859.”  

Texas local Government property tax rates are composed of only two elements: the Maintenance and Operations (M&O) rate, and the Debt rate (taxes raised for paying off bonds and some other debts).

“As an engineer, if I swear that my calculations are ‘true and correct,’ then I turn around and admit that I don’t fully understand my own calculations, I don’t get affirmation from a judge — I get reprimanded or fired by a technical manager,” Zimmerman added. “Clearly, the ‘Bad Faith Five’ Round Rock ISD Trustees need to be reprimanded and fired by district voters for incompetently claiming that a 2.3% tax revenue increase is ‘no new revenue’.”

Said TCTU attorney David Rogers: “We appreciate Judge Lambeth’s thorough preparation and thoughtful work on this case which presented some new issues of law. As RRISD’s lawyer admitted, the RRISD administration made a number of mistakes, and the question presented was whether those mistakes were so egregious that RRISD would be required to lower taxes. Though the mistakes made by RRISD and submitted to the Travis County Tax Assessor-Collector seemed to indicate that they would be required to lower taxes by more than $9 million dollars, the judge found that taxpayers would not be given that relief in the courthouse. We respect her decision, and look forward to RRISD taxpayers’ verdict on tax relief at the ballot box.”

The Travis County Taxpayers Union was established in 2012 to represent the best interests of Travis County Taxpayers against special public and private interests demanding subsidies at the taxpayers’ expense. For more information, plus statements on previous controversies surrounding the Round Rock ISD and suspended Superintendent Azaiez, visit www.TCTUnion.org.

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