Judge orders KISD return revenues

District: Appeal will move forward as court finishes filings in tax lawsuit


The legal process for Kilgore ISD continues this week, as a Gregg County judge handed down an amended final judgment in the ongoing tax lawsuit.

Judge Vincent Dulweber of Gregg County Court at Law No. 2 filed the amended final judgment Wednesday in favor of the plaintiffs, Darlene and John Claude Axberg and Sheila Anderson, and intervenor, Texas Attorney General Ken Paxton, on their claims for declaratory relief.

Dulweber previously filed a letter Dec. 7, ruling in favor of the plaintiffs, and KISD board members unanimously voted at their Dec. 18 meeting to appeal the decision. The appeal has yet to be filed because of the back and forth legal proceedings, KISD attorney Dennis Eichelbaum said.

“This is the final order we’ve been waiting for from the Attorney General’s office,” he said.

The amended final judgment states the section of the tax code cited by the plaintiffs is constitutional and a “matter of law” and prohibits school districts from repealing or reducing the local option homestead exemption (LOHE) between Jan. 1, 2015, and Dec. 31, 2019. It also declares the KISD Board of Trustees were in violation of the tax code when they voted 5-3 to rescind the 20 percent LOHE in June 2015.

KISD board members stated at the time the decision was in an effort to retain local control, noting Senate Bill 1 – also known as Proposition 1 – “locked in” local taxing entities to a certain LOHE without the option to change it through 2019.

However, they contended the district could avoid being locked in to a set LOHE if the decision to eliminate it was made before July 1.

Paxton joined as intervenor in the lawsuit, filed Sept. 29, 2016, stating KISD and 19 other school districts across the state, needed to set their local optional homestead exemption back at the 2014 level, 20 percent for KISD.

Wednesday’s judgment includes orders for KISD to “stop assessing and collecting property taxes through December 31, 2019 that are subject to the local option homestead exemption that it adopted for the 2014 tax year” and for the district to “disgorge and refund to Plaintiffs those property taxes that it has collected for tax years 2015, 2016, and 2017 that are subject to the local optional homestead exemption that it adopted for the 2014 tax year.”

KISD has collected about $4 million in taxes due to the eliminated LOHE. That collection remains in a separate account, unused in limbo, while legal process continues.

According to KISD attorney Dennis Eichelbaum, KISD filed a request for findings of fact and a motion in January requesting a new trial but was told a final order was needed first.

The district filed another request for findings of fact Friday, Eichelbaum said, noting the district is moving forward with the legal proceedings as quickly as possible. The district will then file a motion for a new trial again, and then, unless a new trial is granted, will file its notice of appeal.

“Assuming the judge doesn’t sign another amended final judgment, all of these procedures should be completed in the next 45 days,” Eichelbaum said, stating Dulweber must have time to respond and the plaintiffs must have time to counter.