Members of Kilgore’s school board agreed without dissent Monday they will not willingly reverse their 2015 decision to eliminate a local homestead exemption.
The board voted unanimously to appeal a Gregg County judge’s ruling that the district should pay back the tax money collected from its eliminated local optional homestead exemption.
“As TASB supports us and they are paying the cost of the attorney and this appeal is not costing the district any tax money, and for the future control of this district and the benefit of our students in KISD, I move we appeal the ruling in Axberg v. KISD, Docket No.2016-1850-CCL2,” trustee John Slagle said in his motion.
The Texas Association of School Boards (TASB) is a membership-based private, nonprofit association, unlike the state-run Texas Education Agency. Member school districts, including KISD, pay TASB a fee to get support – in this case, insurance to pay attorney fees – from the organization.
On a second from board Vice President Scott Montgomery, the vote was unanimous 7-0. The motion followed a 40-minute executive session during which the board members and administrators met with their attorney, Dennis Eichelbaum.
The motion to appeal is in response to a Dec. 7 ruling by Judge Vincent Dulweber of Gregg County Court at Law No. 2. Dulweber ruled in favor of the plaintiffs who are suing to have the homestead exemption restored. The September 2016 lawsuit, filed by Darlene and John Claude Axberg and Sheila Anderson, claims the district was outside the law when they rescinded the 20 percent local optional homestead exemption in June 2015.
That 5-2 decision came June 29, 2015, a few days before the July 1 deadline to make any changes to the exemption and a few months before the November election at which 86 percent of Texans approved a constitutional amendment that also increased the state-granted homestead exemption to $25,000 from $10,000.
However, according to Dulweber’s ruling, Senate Bill 1 was signed into law June 15, amending the Texas Tax Code to prevent school districts from eliminating or reducing their local exemptions before the subsection’s expiration on Dec. 31, 2019.
The Senate Joint Resolution, proposed during the 84th Legislature, stated, “The amendments to Sections 1-b(c), (d), and (e), Article VIII, of this constitution take effect for the tax year beginning January 1, 2015.” This includes the section that prohibits “the governing body of a political subdivision” from reducing or repealing a previously adopted exemption.
“The court finds, as a matter of law, that the provisions of SJR 1 authorized the enactment of Texas Tax Code Section 11.13(n-1) effective as of January 1, 2015,” the ruling states.
School trustees said in advance of their vote in June 2015 that the decision was to retain local control and to avoid being locked into giving a specific exemption through 2019.
KISD was one of 20 school districts to rescind or reduce their exemption and one of two facing a lawsuit, with White Deer being the first to be faced with legal action. The lawsuit against KISD was filed on Sept. 29, 2016, and lists the school district, each of the seven men who were board members at the time and KISD Superintendent Cara Cooke, all within their official capacities.
Texas Attorney General Ken Paxton intervened in support of both lawsuits – against KISD and White Deer ISD.
Current trustee Reggie Henson and former trustee Karl Riley voted against the June 2015 motion. Current trustees John Slagle, Dereck Borders, Scott Montgomery, Trey Hattaway and former trustee Jimmy Kinsey voted in favor of the decision. This week, Henson joined the majority in voting not to reinstate the local homestead exemption. Board members Joe T. Parker and Cindy Edmonds, who were not part of the original vote and are not listed as defendants in the lawsuit, also voted to appeal the decision.
Members of the public attended the meeting to hear the board’s decision, and taxpayer Dale Hedrick voiced his opinion by reading a letter during the meeting’s public comments section.
In his comments, Hedrick said, the board’s decision “took place in June 2015 with little, if any, input from KISD taxpayers!”
He noted the opinions and letters sent to the district by Paxton and Commissioner of Education Mike Morath stated the district should reinstate the 2014 exemption. His remarks also noted the visit from Wayne Pierce, executive director of the Austin-based advocacy organization Equity Center.
“You even planned on using this money back in August 2016, citing that you have received no guidance from the state. I don’t know who you were listening to… After being pressured, you finally decided to put this extra tax money into escrow pending the outcome of the court’s ruling,” Hedrick continued. “On December 7, 2017, Judge Vincent Dulweber issued his summary judgment pertaining to this lawsuit. What will your next move be? Will you continue to thumb your nose at the taxpayers of this district to advance your own personal causes? Or will you continue to try and call the state’s bluff in the matter? In my opinion, it’s high time to end this litigation, return the extra taxes you’ve collected, with accrued interest, to the homeowners, and for you as a board to become better stewards of the taxpayers’ money by not wasting it on further litigation.”
Following the three-hour meeting, Board President Dereck Borders said, “I really don’t have anything that I can offer you that’s earth-shattering. Some of the comments that were made were not accurate. TASB is funding the lawyer. We have the support of TASB, and we just think that what we’re trying to do is in the best interest of the community and the students. We want to keep the options here. This was not unexpected. This is kind of what we expected.”