Beginning today, voters will encounter many hard decisions up and down long ballots necessary for the unprecedented Nov. 3 general election.
For voters and taxpayers in College of the Mainland’s jurisdiction, however, there’s one question that strikes us as a given — whether to support Proposition A.
That’s a clear yes.
Although it’s easy to get lost in the background and to be a little misled, perhaps, by the gummy prose of ballot questions, this one, at its core, is simple.
Would taxpayers be willing to save about $4.3 million in debt service payments by refinancing some maintenance tax notes at a much lower interest rate?
The proposition calls for issuing general obligation bonds to pay off the maintenance tax notes. The college, actually the taxpayers who support it, are paying 4.2 percent interest on about $15 million in maintenance tax debt remaining from $20 million issued in 2017 to make immediate repairs and upgrades to facilities and infrastructure.
The college’s financial officers estimate they could sell the $15 million or so in general obligation bonds needed to retire that debt at an interest rate of about 1 percent, maybe lower.
The situation is similar to a canny homeowner taking advantage of the historically low interest rates available now to save a lot of money over the life of a mortgage; it’s a smart move.
By approving Proposition A, voters also 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 would free up about $1.2 million a year to help pay for the district’s operations, officials said.
College Trustee Donald Gartman recently argued in a letter to the editor that supporting Proposition A is a no-brainer, and we agree.
Here’s where people might hang up, though, and what worries college leaders.
The ballot language asks voters to approve “ ... levying and imposition of taxes sufficient to pay the principal of an interest on bonds ... .”
They worry people will see that, read tax increase and vote no without giving the choice much thought.
That would be a shortsighted and unfortunate thing to do.
The proposition would result in a debt service tax rate increase of about 1 cent on every $100 of taxable value, college officials said.
That would cost the owner of a $200,000 house about $16 a year, which breaks down to about $1.33 a month, officials said.
It’s fair to ask, if the debt service rate must increase after shifting the bond expense, why the maintenance and operations tax rate isn’t going down slightly.
College officials argue the benefit to the organization and its students in keeping that rate the same and applying the $1.2 million freed up in the move to operations outweighs the fractional benefit of a slight tax cut.
The college already has one of the lowest maintenance and operation tax rates among Texas community colleges. It also offers students one of the least expensive paths to higher education and career development.
At no time in recent history have the services offered by community colleges been more important. The same forces responsible for those very low interest rates have put millions of Americans and thousands of Galveston County residents out of work. Many of them will turn to community colleges for retraining in hope of returning to gainful employment.
That $1.2 million will help the college expand its course offerings to include a bachelor of science degree in nursing, an accelerated associate degree program, dental hygiene programs and mechanical and chemical engineering programs, along with surgical and radiological technician programs, to name a few, without increasing tuition costs.
Any reasonable thing we can do to assist in that will benefit the community, and the college’s plan is more than simply reasonable; it’s an example of sound fiscal management.
The core question is whether to save $4.3 million in interest payments and invest $1.2 million in the future of Galveston County’s workforce.
We say yes 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.