26/03/2026
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EPISODE 4: STOP CUTTING TAXES?
“Why are you cutting taxes if you're struggling financially? Why cut taxes when you need more money?”
You’ll hear this question often during election season—and it’s a fair one. But the answer is straightforward once you understand how school district taxes actually work in Texas.
School districts don’t collect a single “school tax.” They collect two separate taxes, and the money from each can only be used for specific purposes:
• Maintenance & Operations (M&O) Tax — This funds day-to-day operations: teacher and staff salaries, utilities, classroom supplies, transportation, and other ongoing expenses needed to run schools every year.
• Interest & Sinking (I&S) Tax — This pays off debt from voter-approved bonds, which finance long-term capital projects like new buildings, roofs, buses, and major renovations.
Key point: Texas law prohibits moving money between these two pots. M&O funds cannot be used to pay debt, and I&S funds cannot be used for daily operations. Transferring between them would be illegal.
So why is GCISD reducing the overall tax rate (for the seventh consecutive year, as of the 2025 adoption) even as some claim the district faces financial challenges?
The simple answer: The reductions are coming from the I&S tax rate, as the district pays down or refinances debt. As bonds are retired or savings are realized (for instance, through refinancing that saved GCISD over $12 million recently), less revenue is needed for debt service. This allows the board to safely lower the I&S rate—returning money directly to taxpayers—without touching the M&O side.
Lowering I&S does not reduce funds available for classrooms, teachers, or operations. Instead, it’s responsible financial stewardship.
When someone says, “They’re cutting taxes while claiming to struggle financially,” the accurate response is: They’re lowering the debt-service portion of your taxes because the district has managed its bonds well and is reducing what it owes. That money was never available for daily operations anyway—so these cuts do not impact the district’s ability to fund schools today.
This is good governance, not mismanagement. It benefits taxpayers without compromising education.
And once again, the person asking you to answer this question is either misinformed or is misleading. No matter which, always question what they say next.
Stay tuned and stay informed!
