Big Spring Independent School District Board of Trustees President Irene Galan, left, makes a point while board vice president Mike Dawson listens during the trustees' monthly meeting Tuesday evening. (HERALD photo/Steve Reagan)
 

School trustees discussed the very real possibility of a tax hike when they held their monthly meeting in the high school board room Tuesday evening.

District administrators say the tax increase may be possible to help offset decreased debt-service payments from the state.

Chief Financial Officer Sandra Waggoner said the state's annual debt service aid has been dropping as the district's tax valuations increase.

“When (the Texas Education Agency) computes their debt allotment, it is on the assumption that we will collect so much in taxes.”

However, district collections have dropped as a result of the dispute between the Alon USA Refinery and the Howard County Tax Appraisal District. Simply put, the district is collecting less than the state believes it should be, which has led to the decreased debt service payments.

That state aid will decrease from $260,000 in 2007 to $89,000 this year, leaving administrators to plug a $171,000 hole in their new budget.

“We'll probably have to raise taxes by a penny,” Waggoner said. “That won't make up the entire difference, but it will make up most of it ... the remainder will come from our reserve funds.”

Trustees are prohibited from increasing the tax rate for maintenance and operation purposes (unless they call for a rollback election), but this increase would be for debt service purposes, Waggoner said.

Although the budget shortfall could be made up entirely by dipping into reserves, Waggoner was hesitant to recommend that option.

“For one thing, we try to keep maintenance and operation and debt service (budget functions) separate from each other,” she said. “For another thing, it would just be postponing the inevitable ... you can only dip into reserves so much.”