CISD 101: Did You Know? How School Tax Rates Really Work: Operations vs. Debt

School taxes can be confusing. Some believe that lowering one part of the tax rate means less money for students. That’s not true. This misunderstanding comes from not knowing that school taxes are divided into two separate parts, and they each serve a different purpose.

Maintenance and Operations

The first part is called the M&O tax, which stands for Maintenance and Operations. This is the part of the budget that pays for the daily needs of the school district, like teacher and staff salaries, classroom supplies, utilities, and basic upkeep of buildings. Most of this tax rate is set by the state, but local school boards can access up to eight extra pennies, called golden pennies, which can bring in additional money for the district. Right now, Carroll ISD is using five of those golden pennies, which don’t require a vote. To use the remaining three, voters have to approve them in a special election. If approved, those extra pennies would bring more money into the district each year to support teachers, staff, and students, and none of that money would be subject to the state’s recapture system.

Interest and Sinking

The second part of the tax rate is called I&S, which stands for Interest and Sinking. This money is only used to pay off debt for things like building new schools or major repairs and improvements. By law, this money cannot be used for teacher salaries, classroom supplies, or any other day-to-day expenses. The school board can either use this money to pay off debt faster or lower the I&S tax rate. It cannot be used to help with regular school operations.

Impact on Community and Taxpayers

Some people are concerned that lowering the I&S tax rate means there will be less money for students, but that’s not how it works. That money was never allowed to be used for classrooms in the first place. However, lowering the I&S rate actually could help balance out the increase in the M&O rate that would come with adding the three golden pennies, allowing the district to raise more money for everyday school needs without increasing the total tax rate year over year.

In simple terms, this November voters are being asked to approve a change that would bring more funding into our schools. The extra money would directly support students and staff. Even if the change is approved, taxpayers would still pay less of a total tax rate than they did last year.

If you want to see how the proposed tax rate would affect your property specifically, you can go to www.southlakecarroll.edu/vatre and use the Tax Rate Calculator.