Maintenance and Operations
supplies | food | utilities | salaries | furniture
Interest and Sinking
debt repayment for capital improvements
Tax Rate Components
Public school taxes involve two figures, which divide the school district budget into two “buckets.” The first bucket is the Maintenance and Operations budget (M&O), which funds daily costs and recurring or consumable expenditures such as teacher and staff salaries, supplies, food, gas and utilities. Approximately 85 percent of the district’s M&O budget goes to teacher and staff salaries. The second bucket is the Interest and Sinking budget (I&S), also known as Debt Service, and that is used to repay debt for longer-term capital improvements approved by voters through bond elections.
Proceeds from a bond issue can be used for the construction and renovation of facilities,
the acquisition of land and the purchase of capital items such as equipment, technology
and transportation. I&S funds cannot by law be used to pay M&O expenses, which means
that voter-approved bonds cannot be used to increase teacher salaries or pay rising costs
for utilities and services.
Estimated Tax Impact
Exemption for Senior Taxes
Bond Refunding Saves More Than $63M
Currently, Mansfield ISD’s I&S tax rate is $0.47 and the M&O tax rate is $1.04 for a total tax rate of $1.51 per $100 of certified property value. The chart to the right shows the district’s tax rate over the past 5 years.
The estimated maximum tax impact of the May 2017 bond is 3 cents for a total
tax rate of $1.54. For a home valued at $200,000, this represents an increase
of approximately $4.38 per month.
This chart illustrates the estimated monthly tax increase to property owners in Mansfield ISD.
*assumes $25,000 homestead exemption
Mansfield ISD property taxes for citizens age 65 or older would not be affected by the bond election as long as an over 65 homestead exemption application has been filed with the local appraisal district.
According to state law, the dollar amount of school taxes imposed on the residence homestead of a person 65 years of age or older cannot be increased above the amount paid in the first year after the person turned 65 – regardless of changes in tax rate or property value – unless significant improvements are made to the home.
Mansfield ISD has been fiscally responsible through the refunding of its bonds, saving taxpayers a total of approximately $63.1 million.
Bond refunding allows the district to exchange its
higher-interest debt for that of a lower rate. The savings were accrued through 11 different bond series since 2010.
MISD has maintained outstanding ratings from Moody’s,
Standard & Poor's (S&P) and Fitch Ratings, the top three credit
rating agencies. Those ratings allow MISD to achieve the lowest
interest rates available for all bond financings.
"The MISD Business Services Department continually looks for
ways to make the most out of taxpayer dollars," said Dr. Karen
Wiesman, associate superintendent of business and finance.
"We will continue to effectively manage the district’s debt and
finances and ensure economical and efficient operations."
The table to the right depicts the refunding bond series and how
much total debt it has saved the district.
Mansfield ISD also has no capital appreciation bonds (CABs),
which many other fast-growing districts have accrued.
The interest on a CAB keeps compounding until payment is
due, causing the interest-to-principal payback ratio to be
significantly higher than traditional bonds.