County school board increases equalization tax rate for '18-19

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Last week’s meeting of the Rusk County School Board wasn’t business as usual – it ended with an increase to the local equalization tax rate, but not without some atypical debate.

It was the first the time the trustees had met in a year: their last session, in August 2017, had a similar agenda but didn’t include this year’s often-contentious dialogue.

Four of five members were in attendance Aug. 22, as was Rusk County resident Dale Hedrick, a Kilgore ISD taxpayer on a crusade to abolish the county’s equalization tax rate.

Approved in the early-‘40s, the measure levies an additional school tax on Rusk County residents. Revenues are allocated to all the school districts operating in the county in whole or in part, divided up on a per-student basis. If a district straddles a county line (like Kilgore ISD) it gets a portion of the funding based on how many of its students reside in Rusk County.

The meeting at the county courthouse included the possible adoption, ultimately approved 3-1, of an effective tax rate of 2.6437 cents per $100 valuation, an increase on the prior year’s rate in order to collect the same amount of revenue.

It creates an unfair tax burden, Hedrick contends, with Rusk County residents paying both the equalization tax and KISD tax rate while Gregg County taxpayers cover only the school district’s tax. The board permitted Hedrick to lay out his argument during the Wednesday afternoon meeting – he’s spent years researching and refining his opposition, including giving testimony in Austin in March.

“Y’all may call it an equalization tax. I’m callin’ it a subsidy, and I would respectfully request that you set a zero tax rate and let the schools stand on their own,” Hedrick said. “If Kilgore needs 2.6 (cents) more, let them go up on their rates that much. That way the Gregg County side of this district is paying their side of it.”

The meeting also included the addition of John M. Carter to the board, representing Precinct 2. Trustees are meant to be elected to positions but are usually appointed – according to Rusk County Judge Joel Hale, it’s a matter of finding someone willing to take on the task.

Aside from a lunch stipend, “They don’t get anything for it, they’re really just trying to help the community,” he said.

Carter took his post in opposition to the tax: as the original proposal was presented in the ’30s, he said, it was aimed at “equalizing school facilities in opportunities,” but that’s no longer the case.

“Once it’s left here this board has no clue whatsoever where they spend one penny of your money. Not one cent of it. It goes in their general fund,” he said. “I retired from teaching. I was a superintendent. I know what it’s like to put a budget together. You go to other districts and other counties where they don’t have this, they don’t have that luxury.”

It’s about being fair to Rusk County residents in split counties, Hedrick said, asking again the board set the tax rate at zero. The 13 districts that receive funding would be able to accommodate the drop in revenue, he added.

“I think every school ought to stand on their own. These schools right now are looking at what kind of money they can get from the county, and they’re working that into their budget. There is nothing in the state funding formula for schools include the monies they get from this tax.”

Board chairman Worth Whitehead (an at-large member) resisted the push to eliminate the tax rate entirely, suggesting the decision should be left up to Rusk County taxpayers.

“They voted it in,” he said, “they ought to be allowed to vote it out.”

If that’s the case, Hedrick countered, he’s ready to spearhead a petition to make it happen.

“Is there any discussion between years?” he asked.

“This is the main thing that we do,” Whitehead replied. “This is the first year that we’ve not met since we set the tax rate last time.”

Setting the rate at zero is within the board’s authority, Hale noted. Notably, he added, the action taken Aug. 22 wouldn’t have a real impact on the affected school’s budgets until the 2019-2020 school year.

While taxpayers like Hedrick may think it’s unfair, “It benefits those kids in your district,” Whited countered.

No, Carter said, “It dilutes the value of the money, the original intent, for the students of Rusk County.”

According to Whited, “We can’t help that. This is the way the district was set up, those are the rules we have to operate by.”

Following the Aug. 22 meeting, this year the school board is dispensing a total of $961,844 in collected revenues to the various districts, allotted on a per-student basis: each school receives funding based on the number of Rusk County-resident students who attend.

Whitehead’s support for adopting the effective tax rate was echoed by Precinct 1 trustee Robert Vinson and Precinct 2 trustee Jack Hammett.

“So you effectively want to go up on the taxes this year? That’s what you’re doing,” Carter said, opposing the measure.

“The effective rate lets you get the same money you got last year,” Whitehead replied.

According to Carter, “I understand that. I also understand you’re putting on some people additional burdens.” As for the schools, “Do they need that much money? Heck, I don’t think so.”

According to county officials, no one in the Texas Secretary of State’s office has been able to give definitive answer on the tax, a rarity among Texas counties.

“To solve this, it’s going to take legislative action,” Hedrick said. “It took that to start the thing in ’39. It was groomed to fit Rusk County in the day.”

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