UPDATED: This story was updated Thursday, Nov. 21, with information regarding the court where the Axberg v. KISD case will next be heard.

Kilgore ISD board members have decided to let a long-running lawsuit against the district be taken to a lower court for final judgment following a denial for rehearing by the Texas Supreme Court.

At Monday night’s board meeting, trustees issued a statement on the Axberg v. Kilgore ISD case, which has been continuing for several years.

“Kilgore Independent School District has always relied on the Court to interpret the law. We appreciate TASB (Texas Association of School Boards) Risk Management’s ongoing support and willingness to defend and pay the legal defense for this important case. Although KISD is disappointed the Texas Supreme Court did not find this case regarding statewide school finance worthy of review, we will return to the local court, consistent with the latest mandate issued by the 6th Appellate District Court of Appeals, and let the trial court determine the end result,” the statement read.

The statement was issued following a closed session consultation with KISD attorney Dennis Eichelbaum. The board filed a motion for a rehearing of the case in the Texas Supreme Court Sept. 16, which was denied Oct. 18.

In a follow-up email, Kilgore ISD Superintendent Dr. Andy Baker confirmed the case has been sent back to the "local court" in Gregg County. Baker does not have information on when further court proceedings might occur. A mandate issued by the State of Texas Friday, Nov. 8, confirms the Sixth Court of Appeals has remanded the case to the trial court, Gregg County Court at Law No. 2, for further proceedings. As of Thursday, Nov. 21, Gregg County Court at Law No. 2 does not yet have any proceedings for this case scheduled. 

Axberg v. Kilgore ISD is a suit filed against the district in Sept. 2016 in Gregg County Court at Law No. 2 by John Claude Axberg, Darlene Axberg and Sheila Anderson. The plaintiffs are residents of KISD’s tax district and filed suit after the district rescinded a Local Option Homestead Exemption, which allows some property owners to exempt part of their property value from tax assessments.

KISD rescinded its 20-percent LOHE, which the district had voluntarily maintained for decades, in May 2015 following the Texas legislature’s introduction of a constitutional amendment, Senate Bill 1 and Senate Joint Resolution 1, which mandated Texas school districts could not remove or reduce their LOHEs from the amount set for the 2014 tax year through the 2019 tax year. The amendment also mandated an increase in the amount of taxable property covered by the exemption.

At the time, board members said they rescinded the LOHE to retain local control of the tax exemption they had offered to residents of KISD’s tax district for years, without being locked into a state-mandated rate until 2019.

20 Texas school districts made a similar decision and repealed their LOHEs around the same time as KISD.

Voters didn’t approve the constitutional amendment until Nov. 2015 and KISD repealed their LOHE in the interim.

In Dec. 2017, Gregg County Judge Vincent Dulweber ruled for the plaintiffs and KISD promptly appealed. In Feb. 2018, Dulweber handed down an amended judgment in favor of the plaintiffs.

In Feb. 2019, Texas Attorney General Ken Paxton distributed a press release criticizing Texas school districts for repealing LOHEs and the 6th District Court of Appeals in Texarkana ruled Texas ISDs had no right to repeal or reduce their exemptions.

KISD has accrued over $4 million in taxes as a result of the repealed exemption since 2015, which it has placed into a separate account to remain untouched until the litigation has taken its full course and a final decision has been reached.


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