AG Ruling States Kilgore ISD Tax Effort is Void

The trustees, and their tax lawyers, of a Kilgore school will now discuss the next move they will take after a decision they took last summer in the guise of local control was recently ruled as void by the Texas attorney general, reported Longview News Journal.

Kilgore school trustees decided to repeal an optional homestead tax exemption. The 75-year-old schools tax was filed by the Texas Attorney General. About two cents are added by the special tax to the rates residents pay within the county school district. In several cases, the county tax is paid by a resident on top of another school district’s rate while others in the same ISD are exempted from paying it. A statewide school tax law firm said that July 6^th was the cutoff to act or be forced to offer the optional exemption for the coming five years.

The prospect of allowing the state to take what was formerly an annual decision out of local hands did not sit well with the trustees.

School districts have the option to offer the tax break, which takes off 20 percent off a primary homestead’s value before it is taxed, as reported by Kilgore News Herald.

It is distinct from an exemption of $25,000 that is offered to taxpayers by schools, but Attorney General Ken Paxton's March 17^th opinion letter is a result of that mandatory tax break.

A law passed last spring in Austin necessitated a public referendum on whether the mandatory exemption should be increased, which used to be $15,000. Voters gave the referendum an overwhelming response so that they would receive a greater tax break in November.

Under the same law, beginning Nov. 3^rd, 2015, the date of the referendum, through the 2019 tax year, schools and other taxing entities are forbidden from reducing or repealing the optional exemption.

The action taken by Kilgore and 20 or 30 other districts during last summer’s budget-writing season is void. Kilgore trustees, as well as in effect ISDs statewide, made an argument through their tax attorneys that it was unconstitutional to let a law reach back in time.

Last summer, Kilgore ISD CFO Revard Pfeffer estimated that approximately $660,000 would be added to the budget, which is a direct result of revoking the optional exemption. This has been in effect since September.

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