Taxpayers in College of the Mainland’s jurisdiction have another opportunity to save themselves a little more than $4 million over the next several years by supporting ballot Proposition A.

The proposition calls for issuing general obligation bonds to refinance maintenance tax debt remaining from $20 million issued in 2017 to make immediate repairs and upgrades to facilities and infrastructure at the college campus off Amburn Road.

Taxpayers supporting the college are paying 4.2 percent interest on about $14 million remaining of that debt.

The college’s financial officers estimate they could sell the $14 million or so in general obligation bonds needed to retire the maintenance tax debt at an interest rate of about 1 percent, maybe lower.

Shaving three or more percentage points off the interest rate will save taxpayers as much as $4.3 million over the life of the loan, college officials estimate.

The situation is similar to a canny homeowner taking advantage of the historically low interest rates available now to save much money over the life of a mortgage; it’s a smart move.

It is, in fact, a no-brainer.

Unfortunately, that’s no guarantee Proposition A will pass. It might not unless people can read past the murky, misleading prose of the ballot language to comprehend what they stand to gain from voting yes.

The proposition, which taxpayers can begin weighing in on when early voting begins Monday, is similar to one they rejected during the November general election.

Whether it resulted from opaque ballot language or just the odd dynamics of that election, failure of the measure in November was a classic example of taxpayers voting against their own best interest.

By rejecting the November proposition, voters decided it would be better to give $4.3 million to the hedge funds, massive retirement funds, foreign governments and others who buy and sell public debt than to keep the money in their own community.

And although the Proposition A on May 1 ballots is similar to the failed November proposition, it’s different in one crucial way.

College leaders before the November referendum planned to spend the $250,000 or so they would save each year through refinancing on academic operations.

This time, they intend to return that money to taxpayers through a cut in the maintenance and operations tax rate.

It works like this.

By approving Proposition A, voters would allow the college to shift the debt service costs, the periodical payments made to pay off the original debt and interest, from the maintenance and operations tax rate to the debt service rate.

That shift requires increasing the debt service rate to accommodate the general obligation bonds. Because of that, the ballot language says — “levying and imposition of taxes sufficient to pay the principal of and interest on the bonds and the costs of any credit agreements. This is a property tax increase.”

What the ballot language doesn’t say is by agreeing to a slight increase in the debt service rate, taxpayers are voting themselves a decrease in the maintenance and operations tax rate.

If the proposition is approved, there would be an overall decrease to your property tax rate, according to the college. “Based on projected numbers, if the refinancing measure is approved, the new tax rate would be an estimated $0.287747 per $100 valuation versus $0.290364 per $100 valuation if the measure does not pass.”

The bottom line is approving Proposition A will allow the college to save about $4.3 million and pass those savings back to taxpayers.

The rest is just bookkeeping and half-true legalese, which in this case obscures what’s clearly in the public’s best interest.

The college’s plan is more than simply reasonable; it’s an example of sound, proactive fiscal management.

We say yes to Proposition A and urge voters in the Dickinson, Hitchcock, Santa Fe and Texas City school districts, all of which are in the college’s jurisdiction, to do the same.

• Michael A. Smith

Editor’s note: The Daily News, which owns and operates a printing plant in Texas City, pays substantial property taxes to College of the Mainland.

Michael A. Smith: 409-683-5206; michael.smith@galvnews.com​.

Recommended for you

(11) comments

Keith Gray

“Based on projected numbers, if the refinancing measure is approved, the new tax rate would be an estimated $0.287747 per $100 valuation versus $0.290364 per $100 valuation if the measure does not pass.”

We all know they could pony up more reduction to the tax rate... the Galveston CAD will just jack the heck out of our home/business evaluations/assessments for the College to get their desired dollars.

Gary Scoggin

COM has nothing to do with CAD evaluations. And CAD evaluations are not influenced by COM's taxing rate.

Keith Gray

Gary you should do your homework

Gary Scoggin

Keith, can you explain, please?

Keith Gray

Every year our county commissioners cut our taxes, yet due to the CAD I pay more in taxes. There doesn’t have to be any direct relations with any taxing entity and the CAD... I still pay more taxes. Methods matter and results hurt the middle class

Gary Scoggin

Let's hope this sensible measure passes this time around.

Jose' Boix

Michael Smith's Editorial few closing statements - to me clearly wraps the reasons to vote YES for COM's Proposition A: "The bottom line is approving Proposition A will allow the college to save about $4.3 million and pass those savings back to taxpayers.

The rest is just bookkeeping and half-true legalese, which in this case obscures what’s clearly in the public’s best interest.

The college’s plan is more than simply reasonable; it’s an example of sound, proactive fiscal management.

We say yes to Proposition A and urge voters in the Dickinson, Hitchcock, Santa Fe and Texas City school districts, all of which are in the college’s jurisdiction, to do the same."

Stephanie Martin

I will be voting FOR the Proposition.

Jose' Boix

Please get out to vote FOR COM's Prop. A. Also check the TCISD Trustee At-Large elections and consider supporting the incumbent, Dr. Nelson Juarez. Below the links to Voting Information and accessing "My Sample Ballot." Early voting starts Monday, April 19 at 8:00 AM.

https://www.galvestonvotes.org/election/may-2021-entity-elections/

https://sites.omniballot.us/48167/app/home

David Floyd

This is a simple no - brainer. The taxpayers will gain on this proposition. Great management from COM and the Trustees.

Its just like refinancing your home at a lower rate. But getting the difference in costs in your pocket.

The problem with this is there are not many other items on the ballot in some of the areas. In Dickinson, I think this is the only thing on the ballot. Voters have to turn out.

Vote YES!

Keith Gray

So I just received my new evaluation from the CAD... I will protest it, but being successful is getting more difficult. Under my old evaluation I would gain about $7 a year for voting yes. Under my new evaluation, I will pay $88.32 more… if it fails, I will pay $95.39 more. COM you can afford to give more than .002617 of my tax dollars back.

Welcome to the discussion.

Real Names required. No pseudonyms or partial names allowed. Stand behind what you post.
Keep it Clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
Don't Threaten. Threats of harming another person will not be tolerated.
Be Truthful. Don't knowingly lie about anyone or anything.
Be Nice. No racism, sexism or any sort of -ism that is degrading to another person.
Be Proactive. Use the 'Report' link on each comment to let us know of abusive posts.

Thank you for reading!

Please log in, or sign up for a new account and purchase a subscription to read or post comments.