KISD Lawsuit Doc Image

A years-long lawsuit against Kilgore ISD will head to a local Gregg County court for the next phase of court proceedings Jan. 27. The lawsuit, Axberg vs. Kilgore ISD, was first filed in 2016, alleging the district improperly collected property taxes after repealing their long-standing Local Optional Homestead Exemption. Over the years, the case made its way up the Texas court system, being turned down for consideration by the Texas Supreme Court last year, sending it back to Gregg County.

Kilgore ISD trustees discussed the next phase in a long-running lawsuit against the district in their first board meeting of 2020 Monday evening.

Axberg v. Kilgore ISD, a lawsuit first filed in 2016, alleges KISD improperly repealed their Local Option Homestead Exemption in 2015 and the plaintiffs are suing for property taxes they say were collected when they should have been exempt from taxation.

“We received a notice that this (case) has been remanded back to the district court. Right now, the date is set at Jan. 27 so it’s two weeks from now. The hearing that’s been requested is to just ask for judgment: where are we right now? What do we do, what do we do next? Those kinds of ideas,” said KISD Superintendent Andy Baker, who recently marked his one-year anniversary with the district and has become informed on the legal issue during his time in Kilgore.

The board first discussed this step in the case at a board meeting in November. A mandate issued by the State of Texas Friday, Nov. 8, confirmed the Sixth Court of Appeals has remanded the case to the trial court, Gregg County Court at Law No. 2, for further proceedings. At the time, a date had not yet been set for the hearing and Monday marked the first announcement of the date.

“We are asking for the judge to help us understand,” Baker said to board trustees, school faculty and staff gathered at the meeting.

“This is something that they could change. Even today, our attorney still has not heard from the plaintiff’s attorney. So, right now, the date is still good, it should happen. As I understand it, from our attorney, he is going to let them have a continuance or push the date back if for some reason they cannot make this court date but we have not been able to be in contact with them yet so we’re still rolling with this date of Jan. 27.”

Baker said the district is currently holding steady regarding the lawsuit and awaiting further clarification from the local court before making any further decisions.

“The district itself is not doing anything at this point. There’s nobody being called as a witness or called to speak as our attorney understands it. This is something that he has taken that responsibility for the past many years. Hopefully, this will help us get some better definition as to what our future holds so we can go about what we can do and hopefully put this thing behind us pretty soon.”

The case proceeded up the Texas court system since the lawsuit was first filed and was rejected for consideration by the Texas Supreme Court last year, sending it back to the Gregg County court for further proceedings.

In November, the district issued a statement following the Supreme Court’s decision.

“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.

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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