Desperate for cash, Dallas’ taxpayer-subsidized school bus agency is raising its tax rate to the highest level allowed.
Dallas County Schools trustees voted at a board meeting on Tuesday to increase the agency’s ad valorem tax rate to the maximum allowed rate of one cent per $100 of taxable value for 2017-2018. (As of close of business Wednesday, no public notices about the 2017 tax rate increase had been posted on the DCS website.)
All Dallas County property tax payers are forced to subsidize the bureaucracy, whether their school districts use DCS bus services or not. Yet the financially mismanaged agency has been hard-pressed to make payments on its existing debt, which exceeds $100 million.
Nine school districts currently contract with DCS for student transportation. Dallas ISD is its largest customer.
Legislation authored by State Sen. Don Huffines (R-Dallas) and signed into law in June requires DCS to hold an election this November allowing voters to decide if the troubled agency will stay open or be shut down in an orderly fashion – before it collapses.
Huffines’ original bill called on lawmakers to shut down DCS directly, saying they had an obligation to protect students and taxpayers from a chaotic collapse of the mismanaged agency. But State Sen. Royce West (D-Dallas) fought for a concession to punt the decision to voters.
Even if the scandal-plagued agency survives the vote to abolish it, Moody’s warned in a report earlier this month that DCS “may yet file for bankruptcy” due to its limited ability to raise cash needed for debt payments.
The additional tax revenue that the rate increase will generate – estimated to equal about $3.50 more a year for the average Dallas County homeowner – is minimal compared to the agency’s debt.
Also on Tuesday, Leatha Mullins stepped down as Interim Superintendent of DCS and was replaced by the agency’s Chief of Police Gary Lindsey, who will reportedly be paid an annual salary of $175,000. Mullins was appointed to the interim position back in March, after then-Superintendent Rick Sorrells was forced to retire in disgrace over the agency’s financial woes and the controversial stop-arm camera ticketing scheme that contributed to them.
The election on abolishing the agency is set for November 7. While its bus drivers have said they’ll campaign with union support to keep their employer operating at taxpayers’ expense, it’s Dallas County voters who will decide whether to shut down DCS.