Tax Information
No Change to the Tax Rate
STATE LAW REQUIRES “PROPERTY TAX INCREASE” LANGUAGE ON BALLOT FOR BOND PROPOSITIONS DESPITE MISD’S I&S TAX RATE NOT INCREASING.
In compliance with a new state law, bond ballot propositions must include the following statement: THIS IS A PROPERTY TAX INCREASE. As a result of this new requirement, voters in MISD will see this language on both bond propositions; however, the MISD tax rate will not increase as a result of the 2022 bond election. the MISD Board of Trustees has lowered the tax rate by $0.04 this year.
Magnolia ISD's bond referendum will not increase the property tax rate for homeowners or businesses or for residents 65 and older who have a homestead exemption. However, state law requires all bond referendum propositions to include ballot language that reads "THIS IS A TAX INCREASE."
Your tax bill may be higher due to an increase in your property value, not an increase in the school district tax rate. Property appraisals are set by the county appraisal district, and home values have risen across our region.
Due to strategic planning and financial stewardship, Magnolia ISD has been proactive by paying off bonds prior to their stated maturity. For example, the 2016 bond sale was sold with a 25-year term and in 6 years, this has already been reduced by two years! The majority of Texas school districts finance out capital projects for 30 years. Magnolia ISD prides itself on going out no further than 25 years and ensuring all assets are repaid within their useful lives through fixed rate bonds. With an underlying bond rating of Aa2 by Moody’s, this is the highest of all clients and one of the best ratings in the entire state.
Lucas Janda, Managing Director Live Oak Public Finance
Fiscal Responsibility Highlights
- District's current financial position is the strongest in the history of the organization via 3.8 months of operating expeneses in reserves
- Superior FIRST Rating and Letter grade of "A" -- highest designation for the State Financial Accountability (98/100)
- Comptroller's Transparency Stars for Traditional Finances for transparency in making the spending and revenue information availalbe
- One of only nine districts in the State to have earned transparency stars in three categories and one of only two in Montgomery County
- 2022 Award of Merit for Purchasing Operations
- Clean audits with no findings of comments (last 13+ years)
- Aggressive debt management plan which has saved the district and our taxpayers over $56 million in interest and bond principal (as of 9/6/22)
- Rated Moody's Aa2
- Lowest debt per-student-ratio compared to peers
Understanding the Tax Rate
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 84 percent of the district’s M&O revenue 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.
MISD Tax Rate History
Voter Debt Per Student
Bond Defeasance saving over $56 mil
The district has one of the strongest financial standings and ratings in the State and is in the top 10% of Moody's rating for districts in Texas. MISD will receive the best rates available through the State's Permanent School Fund (PSF). The need for a bond to address growth is now, and MISD is guaranteed to receive the highest bond rating (AAA), delivering the best interest rates possible.
Similar to refinancing a home mortgage, when interest rates are lower than when a mortgage is secured, school districts can refund bonds without lengthening the payoff time frame. MISD administration and board have a long record of accomplishment in terms of taking advantage of bond refunding opportunities. Below is a synopsis of recent bond refunding efforts and the associated savings.
Since 2009, MISD has saved over $56 million in interest and bond principal.
Chart updated on Oct. 12, 2022 to reflect the most recent bond savings from Sept. 6, 2022.
MISD Compared to Houston Area
- MISD has the second lowest tax rate in Montgomery County (green color bars).
- MISD has the third lowest in the Houston area.
Impact on Taxpayers
- There is no tax rate increase for the November 2022 bond.
- The net impact on a $300,000 home = $0
- The assessed value is set by Montgomery County appraisal district. The amount of ISD taxes paid is calculated by multiplying the district tax rate by each $100 of taxable value of property.
| Home Value | $300,000 |
| Homestead Exemption | $40,000 |
| Taxable Value | $260,000 |
| MISD Tax Rate | $1.1472 |
| MISD Taxes | $2,983 |