How will we pay for school bond proposal?
If you are over 65, it's quite likely you won't
by Kevin Hamilton
If the Iowa Park School Bond Proposal in the amount of $14.7 million is passed May 12, how will the bond be paid for?
That is a good question, and the answer has a few elements to be addressed.
First the tax rate. The estimated tax increase of this bond is .21 cents for a total tax rate of $1.34 (the current tax rate is $1.13). For a home valued at $100,000, this represents an increase of approximately $17 per month.
However, if you are over the age of 65 or disabled, and successfully filed the appropriate application, school taxes are frozen on your home and will not increase as long as you own and occupy the home.
Here is an example: Gloria Free, 3355 E. Ruby (ficticious name and address) owns a home valued at $100,000 and turned 65 last year. With the Homestead Exemption and Over-65 Exemption, the taxable value of the home was $70,000 ($100,000 appraised value - $30,000 Homestead and Over-65 exemptions) and Free’s school tax at $1.13 totalled $791 in 2011.
In 2012, after the school bond proposal was passed, Free’s home value increased to $110,000. At a tax rate of $1.34 and with the two exemptions, the value was $80,000. At a $1.34 tax rate, the tax would be $1,072. However, Free has a “tax ceiling” beginning with the 2011 tax. Therefore, her tax is once again $791.
The only way Free’s status would change is if 1) the name on the deed of her home changes, or 2) she moved to someplace like Florida, purchased a new home and considered her home in Iowa Park a “secondary” residence.
If Free was in the position to change the name on the deed, such as giving it to one of her children, she can avoid losing the exemption if she visits an attorney about a “life estate”, which maintains the exemption but determines heirs.
Another way the ceiling could be impacted is if Free decided to add on to the existing residence, or adding “liveable square feet”. A new roof or painting the building does not apply, and would not change the ceiling.
Farmers with homestead property and sections of land they farm are in a different boat. Only the homestead itself is applicable. Farmed sections or rental property is not applicable for a freeze.
NOT HISTORIC HIGH
The estimated tax rate of $1.34 is by no means a historic high for IPCISD taxpayers. Nor would it be the highest in the North Texas area or with competitive ISDs.
The tax rate for IPCISD was $1.58 prior to 2006. When the state legislature passed property tax reform, the rate fell to $1.45 in 2006, and $1.12 in 2007.
Currently, the tax rate of City View ISD at $1.42 would be above IPCISD’s projected rate. Burkburnett is .3 cents lower at $1.31, then Wichita Falls $1.205, Holliday $1.170, and Electra $1.120.
Graham has a current tax rate of $1.354, while Decatur’s rate is $1.30.