Penny swap or dime increase?

There is a problem with the “penny swap” that the voters approved for EPISD.

Quite simply there is not enough money now being generated by the interest and sinking fund (I&S) rate to pay EPISD’s debts.

Last year the voters approved reducing the I&S rate by 10 cents per hundred dollars of property valuation and increasing the maintenance and operations rate the same amount (M&O) thus leaving the combined rate the same as the previous year.

Then since the district did not have enough money to make their bond payments (I&S) they took money out of an existing fund balance.  In short they took our I&S money over a period of years and did not pay down all of the debt they could, thus creating a fund and increasing our borrowing costs.

You can see that the new I&S tax rate only generated $29 million.  They needed $40.1 million to pay their debt payments.

What they did was reduce their fund balance from $30 million to $18.9 million.  They can probably do this again next year but then they will run out of money.

They cannot take the money from their maintenance and operations fund.

The Texas attorney general ruled last year that:

“Districts do not have authority to increase the maintenance and operations tax rate to create a surplus to pay debt service
with maintenance and operations tax revenue. See TEX. TAX CODE § 26.012(16) (defining “maintenance and operations” as “any lawful purpose other than debt service for which a taxing unit may spend property tax revenues” (emphasis added)).”

The net result is that the district will have to raise the I&S rate either this year or next.

The voters got hoodwinked.

We deserve better

Brutus

 

 

 

9 Responses to Penny swap or dime increase?

  1. Anonymous says:

    Those of us smart enough to vote no didn’t get hoodwinked. I do believe we were told that the pennies could be swapped back if needed for debt service, when many of us warned against this. Let’s see if they lied about that too.

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  2. Rico Suave says:

    “SOONER OR LATER YOU RUN OUT OF OTHER PEOPLES MONEY”

    Like

  3. Anonymous says:

    So it is quite possible that Cabrera is kicking a can of problems down the road just far enough to get himself out in time before everything collapses. EPISD tax payers are going to be on the hook for a lot of money over the next couple decades. We are bleeding out under his self-centered leadership. Sadly, our children may not have the education to deal with these problems they will inherit! It’s funny how a district with fewer students needs to spend more money than ever before.

    The new board will have their hands full dealing with the problems created by Cabrera and someone might just realize that the first step toward recovery is to call this clown out and remove him. His backdoor dealings with a club of so called educational reformers who are really just fellow carpet baggers enriching themselves on our tax money, his first class flights, his $30K monthly car rentals, or his $1000 monthly cell phone stipends and consulting gigs with his buddies all have got to end before we start down the road to recovery. EPISD was his first administrative job in education and he has probably learned a lot through his mistakes. Now we have to pay for them. We need someone who understands education and who will stay in town and roll up their sleeves and get to work educating our children.

    EPISD was destroyed by TEA when they appointed a group of corrupt local politicians to re-shape our district. Sometimes I think the only thing worst than EPISD politicians are the EPISD voters who let this happen. Loweree still got hundreds of votes even after being publicly humiliated for being dishonest. (At least she lost). Most voters in EPISD seem very comfortable being victimized.

    But let’s hope that the new board with fresh trustees takes a more skeptical approach to the status quo. Maybe trust but verify (at least)? Getting the old corrupt region out before the start of next year should be a goal of our newly elected trustees. Through proper governance they could earn our respect for a lifetime.

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    • Truthteller says:

      Your first sentence is spot on. Same goes for the fuzzy math lady.

      Like

    • Fed Up says:

      Cabrera has a contract that guarantees his absurd compensation and all of those perks. His perks alone are greater than the average income for an El Paso resident. Bottom line: taxpayers have been f***ed again and again. When you vote in the next mayoral election, remember which candidate was responsible for Cabrera’s hiring.

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  4. chico says:

    Would be a good time for Tim Holt (err Deputy Dawg) to explain this to us? After all, he was a penny swap advocate … living in Canutillo.

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  5. Sparky says:

    Cabrera is a lawyer not an educator. He’s probably a bad lawyer, which is why he is now trying to be an educator. He knows he’s not a very good public speaker. I can just imagine his sorry press team of professional long nosed fibbers explaining to us sometime next year why EPISD needs to go down the path of bankruptcy due to declining enrollment. He would have loved to have conned someone like Hatch or Fenenbock into being the stooges that had to break the bankruptcy news to the public! I’m sure him and his friends can make a killing off representing the district through bankruptcy. He will keep milking the taxpayers until we demand change.

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