, Port Arthur, Texas


September 17, 2012

PAISD voters not the ones to feel brunt of tax hike

PORT ARTHUR — To borrow a line from President Clinton’s heralded speech at the Democratic National Convention, it takes some real brass to propose a 13 percent tax hike — then ask the people whose taxes will be hiked to go to the polls and vote that tax increase on themselves. That’s exactly what the Port Arthur Independent School District board and administration have asked voters in the district to do.

But when you think about it, for the administration there is little to lose and everything to gain by at least attempting to replace some of the funding the district has lost. Only people who live in the district get a vote. By and large those are the people with the most to gain, in terms of educational programs, after school tutorials, extracurricular activities, new school buses and other benefits for the students in PAISD. And because of the demographics, with lower home values in PAISD than in surrounding districts, those district patrons will only foot a small percentage of the bill. The great majority of the tax increase will be on business and industry in the district, not the homeowners. And when you look at where the decision makers in business and industry live and vote, you won’t find them in Port Acres or El Vista, they don’t live on the West Side or in Pear Ridge, those business owners and industry managers mostly live and vote in Mid-County or Beaumont.

You can bet that proponents of passing the tax ratification election are out in the neighborhoods explaining that the impact on the ordinary home owner in Port Arthur is negligible. If adopted, the new tax rate would add just over $10 a month to the tax bill of a $100,000 home. Most of the homes in Port Arthur aren’t valued at $100,000, so the tax hike for homeowners in Port Arthur would be about the same as buying an extra carton of milk at lunch, only on school days. And homeowners over 65 years old, which in Port Arthur is a significant part of the population, won’t even face that because the taxes on their homestead are frozen. The seniors in PAISD may be where the proponents of the tax hike concentrate their efforts because seniors vote and their children and grandchildren get the benefits and the seniors won’t have to pay an extra dime in taxes.

The story is not the same for businesses and industry. Since we base funding for education on taxes levied on real property, those businesses with high property values will feel the full impact of a whopping 13-percent increase in their school taxes. School taxes are already the largest part of the annual tax bill, usually 30 to 40 or even 50 percent higher than the tax levied by local cities. In Port Arthur, the city’s tax rate is just over 79 cents per $100 of property value, compared with the school district’s current $1.36 tax rate. Boosting that school tax rate to $1.48 for every $100 of property value would significantly increase the cost of doing business in Port Arthur.

At one meeting I attended where the proposed school tax increase was being discussed, a small business owner who provides 65 mostly entry level jobs talked about the impact an extra $5,000 in taxes would have on the bottom line of her business. That’s a lot of extra product she would have to sell just to break even, and selling extra product is very difficult in today’s economy. Another business manager, who operates a hotel in Port Arthur, said at a different meeting the tax increase would boost his taxes by $15,000 a year, which he said might cause him to have to lose an employee. And he challenged Superintendent Johnny Brown on the quality of graduates the district is producing. He said he hires PAISD graduates and their skills are below what he needs for his entry level employees. He was speaking to the superintendent with respect and seemed to be fighting to keep his emotions in check, but he thought it was important to voice to the top school administrators the impact the tax hike they were seeking would have on his business.

The numbers are even bigger for industry in the district, which would feel the impact of a tax increase measured in the hundreds of thousands of dollars. But much of the reason the school administration believes it needs to ask the community to pay more in taxes is the result of legal action by one of the largest industrial taxpayers. Valero Refining and Marketing sued the Jefferson County Appraisal District in 2006 challenging the appraised value of its Port Arthur refinery. Valero’s suit was based on a law that allows any properties appraised above the median value of like properties to be reduced. The problem is that there aren’t many properties in Jefferson County like Valero’s refinery, and by definition one is always going to be above the median (median is the middle value, some are always lower and some always higher).

Valero basically won the suit, which was settled, which forced taxing entities in the county to pay back to Valero about $24 million in taxes they had collected. The PAISD was the hardest hit, having to pay Valero back $18 million. The state came through with about $7.5 million in funding the district would have received if it hadn’t collected the Valero taxes, but PAISD was still on the hook for paying back more than $10 million. That’s a lot of money even for a school district the size of PAISD. But now because Valero’s taxes were reduced, other taxpayers in the district are being asked to fill the gap.

The cuts in state funding also cost PAISD $5 million over the past two years and state funding is likely to never return to levels that our local taxing systems were built to expect. When faced with the prospect of organized opposition to the tax ratification election, Superintendent Brown simply asked, “What do they expect us to do?”

So that, basically, is the question being put before the voters on Sept. 25. What do you want PAISD to do? The administration will tell you the choices are to spend the district’s savings account, eliminate after school programs such as tutoring, eliminate trips and introduce extreme austerity measures. Those opposed to the tax hike will say cuts need to be made, that voters have approved $300 million in bonds in recent history and now it’s time for taxpayers to have some relief.

But the question is whether the taxpayers who feel they need tax relief have a vote in PAISD and if the voters in the district will turn out to support the district’s request for a little bit from them and a lot more from business and industry.

Roger Cowles is editor of The Port Arthur News. Contact him at Follow him on Twitter @rogercowles.

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