Nixon-Smiley CISD sees $4 million increase in FY2025 budget

The Nixon-Smiley Consolidated Independent School District adopted a fiscal year 2025 tax rate that dropped by a penny overall per $100 valuation during a special called meeting on Monday, Aug. 26.

Board members also adopted an overall budget of nearly $31 million, which saw a huge increase in a recapture payment that must be made to the Texas Education Agency due to the district seeing a hefty increase in value for mineral rights.

The new tax rate adopted by N-SCISD calls for a maintenance and operations tax rate of $.6769 per $100 valuation and an interest and sinking tax rate of $.4277 for a combined rate of $1.1046. In fiscal year 2024, the M&O tax rate was $.6792 while the I&S rate was $.4354 for a total tax rate of $1.1146.

“The district reduced the overall tax rate by a 1.0 cents while still paying off almost $10,000,000 in debt in 2024-25,” said District Superintendent Jeff VanAuken. “Being able to make a debt payment of $10,000,000 this year will allow the taxpayers to save over $5,000,000 in bond payments over the life of the bond. It will also allow the district quite a bit of flexibility moving forward as the annual debt service payment will drop to approximately $2,200,000 after this year!”

The general operating budget expenditures have increased from $15,721,327 last year to $19,748,481 in fiscal 2025 — an increase of $4,027,154, or 25.6 percent above the previous year. Of that increase, more than $3 million comes from a recapture payment paid to the state.

Recapture, also known as “Robin Hood,” is a school finance rule that lets the state of Texas and the Texas Education Agency take local property tax dollars from “property wealthy” school districts, like Nixon-Smiley, and then share that funding with economically challenged, “property poor” school districts to help them get more funding. Each year, more than $5 billion in property taxes are taken from Texas public school districts and redistributed to less-wealthy districts.

In 2023-24, Nixon-Smiley CISD had to make a recapture payment of $200,000, but thanks to a huge increase in mineral values for property in the district, that amount will increase to $3,530,000 in 2024-25.

The district also saw an increase of $226,000 in the Teacher Incentive Allotment program for teachers designated as such by the state. That number went from $172,000 last year to approximately $398,000 this year, VanAuken said.

“The other significant increase to the budget was from employee raises and an increase in health care coverage costs,” Van Auken added. “The board approved a compensation package increase of almost $380,000 that included raising the health care coverage from $408 per month to $460 per month for each employee.”

The food service budget went up just $3,400 from the previous year, increasing from $1,238,400 last year to $1,241,804, mainly due to increases in the cost of food.

The debt service budget increased to $9,986,486 for 2024-25. Last year’s debt service budget was $7,557,294, resulting in an increase of just over $2.4 million this year.

“As stated earlier, this large payment will save the taxpayer over $5,000,000 in future debt service payments and will allow the District flexibility moving forward as the annual debt service will reduce to approximately $2,200,000 after 24-25!” VanAuken said.

Property values for the district increased from $1.78 billion last year to more than $2.31 billion this current tax year. The average market value of residences in the district improved from $119,338 to $130,362. The average taxable value of a residence is expected to be about $28,330, which will lead to an anticipated increase of taxes due on an average house of about $312.93, which averages out to $26.08 per month more.

The district expects to finish the year with unencumbered fund balances of $4,674,197 in its M&O fund and $2,662,167 in its debt service fund.