Market Conditions Should Take Care of McKinney ISD TRE increase - TopicsExpress



          

Market Conditions Should Take Care of McKinney ISD TRE increase – No Need for TRE or Cutting Teacher, Support Staff and Programs A McKinney Realtor’s Perspective on the Proposed McKinney ISD TRE Tax Increase: What You Need to Know Before You Vote In the early February 2012 issue of McKinney Living Magazine, the Bright Star Group published an article stating that sales in Collin County were up and inventory was down, indicating the beginning of a seller’s market. True to what we felt in our business as early as October 2011, the market rapidly turned into one of the best markets we have seen in many years. Average McKinney sales prices have indeed been on the rise and according to the Collin County Appraisal District Certified Value Summaries for McKinney ISD, the values for the average 2013 taxable McKinney ISD home have increased over 4% over the 2012 tax year. By now, McKinney ISD residents should have received the McKinney ISD TRE 2013 tax ratification brochure in the mail. According the information published, MISD, will be forced to reduce their budget by $10.7M in 2014/15 school year, as claims made by the ISD that State Funding was cut by $11.2M in 2011/12 and $4.5M in 2012/13 school years. Analysis of the Audited MISD financial statements for years 2010, 2011, and 2012, indicates that State Aid for MISD was $65.2M, $73.7M and $69.8M respectively, indicating an increase of $8.5M from 2010 to 2011 and a decrease of $3.9M in 2011 to 2012. Over the three year period, there was a net increase of State Aid of $4.6M. For more details regarding the Audited Financial Statements, check out the following websites: mckinneyisd.net/information/docs/2011%20final%20signed%20TEA%20from%20Pingleton.pdf mckinneyisd.net/information/docs/2012%20Audit%20Report-FINAL.pdf Also from these statements, there was an increase of net assets (Revenues minus Expenses) of $10.7M that resulted in 2012 thus adding to the overall MISD balance sheet for 2013. According to the MISD proposed budget for 2013/14 the General Fund has a beginning balance of $53.7M, $18.4M for the Debt Service Fund, and $2M for the Food Service Fund. For more details on the proposed budget check out the following site: mckinneyisd.net/information/docs/13-14%20Website%20Proposed%20Budget%20117.pdf What residents may not know, for this 2013 tax year, McKinney ISD will potentially receive about $12M in additional tax revenue over last tax year merely by the fact that market factors have increased sales prices which increases the amount of revenue the ISD will receive. According to the Collin County Appraisal District Certified Reports using their total taxable revenues for McKinney ISD and applying the current tax rate, this number is estimated to be $149M of which $100.9M is estimated going into the general fund for 2013. To view the Certified Summaries see the following website: collincad.org/downloads/viewcategory/45-certified-value-summaries According to the CCAD, a 2013 McKinney ISD home is valued at $222,000. For the previous tax 2012 year, this home was valued at $213,000. At our current rate of 1.54, the home owner is paying a tax increase of about $220. If the TRE passes and the rate increases to 1.67, an additional $269 will be added to the tax bill, raising the total tax increase to $489 for the year over the previous year. It’s important for homeowners to understand in this sellers market, home sales prices have significantly increased, 12.5% over this time last year according to our local MLS. The Collin County Appraisal District has a complex method of establishing home values which includes analyzing our MLS data by neighborhood, which they have access, however, they will also look 3 months the previous calendar year beginning in September and 3 months following the calendar year in March to help determine home values for a given tax year. Since tax year figures are one year in arrears, McKinney homeowners can probably expect another increase in 2014 taxable home market value as for most McKinney residents, historic home sales continued to soar throughout the 2013 calendar year. Using the CCAD average value for a McKinney ISD home, it may not be out-of-line to assume a 5% increase in 2014 assessed home market value; although the taxing authority, by law, can raise assessed value a maximum of 10% each year. In this example, we can expect the average McKinney ISD home value to be $233,000, effectively raising taxes again in 2014 by an additional $286. If you want to know the effects this has on your own tax bill, take your 2013 Notice of Appraised Value tax bill and use the 2013 “taxable” value for McKinney ISD. Divide this number by 100 and multiply this by $0.13. This is the new proposed tax increase for your home. If the TRE passes, you can expect to pay this increase at the end of this calendar year. Since a large portion of funding the ISD’s comes from our property taxes, currently 62.8%, the ISD is asking that this percentage be increased to 64.7%. If this tax ratification passes, it will increase our total taxable rate from 2.4518 to 2.5818, which is the highest property tax rate compared to near-by “sister” cities, assuming that our County Assessor keeps all other tax percentages constant later this fall. Here is how these nearby communities compare: Town ISD ISD Total Population Tax Rate Tax Rate Allen Allen 1.67 2.548 89,640 Fairview Lovejoy 1.535 2.2213 7,914 Frisco Frisco 1.46 2.248 128,176 McKinney McKinney 1.54 2.4518 143,223 McKinney (TRE) 1.67 2.5818 Plano Plano 1.3734 2.1883 272,068 Prosper Prosper 1.67 2.5163 11,729 As indicated in the brochure, some of these ISD’s passed a TRE, but what you don’t see printed are the current tax rates for the ISD’s. Of this list of nearby cities, only Allen and Prosper are at the same rates as proposed by MISD. Other factors, such as the number of homes and business tax base will also affect tax rates. It’s interesting to note McKinney’s population in relation to the total tax rate of other comparable cites as the higher rate can suggest either insufficient number of homes on the ground, more apartment dwellers, more residents per home, a smaller business tax base, insufficient use of funds, to name a few or some combination hereof. As a McKinney ISD resident and Real-Estate Professional, I know the importance of competitive tax rates, good school districts with sufficient programs and materials as well as quality educators. Having all this is a recipe that has attracted many buyers to McKinney over the past few years; as reflected in our high demand and low inventory of homes on the market. With only MISD projections at this point (FYI – actual audited revenues have exceed MISD budgeted amounts by 9.5% in 2011 and 7.4% in 2012), to start messing with this recipe, might end up spelling disaster for residents and business alike in the near future. Bottom Line, the MISD budget will take care of itself due to current market factors alone there should be no need to cut teacher, support staff positions and programs. Filed Under: McKinney ISD
Posted on: Sat, 31 Aug 2013 03:50:29 +0000

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