Presenter: disaster "pennies" keep $916,000 for Mercedes ISD; board would need resolution or voter election to make it permanent

Dr. Magallanes of Estrella Ne Horsa told the Mercedes Independent School District Board of Trustees that the district can preserve roughly $916,000 in combined local and state aid for 2025–26 by keeping three disaster-related “copper” pennies in its maintenance and operations (M&O) tax rate.

Why it matters: the pennies produce about $234,000 in local revenue and the state provides roughly $682,000 to match that levy; without a disaster declaration or a voter-approved tax-rate election the district’s budget would be reduced by about $916,000, a presenter said.

The presentation, given during a special workshop, explained that a property-tax bill shown to homeowners is actually a combination of multiple components. “Maintenance and operations … is used for your daily operations to pay for teacher salaries,” Dr. Magallanes said. He described the M&O rate components (a state-mandated compressed rate and tier‑2 “golden” and “copper” pennies) and said the three remaining pennies sit in the copper category and yield about $49 per penny per weighted average daily attendance (WADA).

Dr. Magallanes said the district has relied on annual disaster relief in recent years after events such as last year’s hurricane and more recent flooding. He explained the process: to use the most recent flooding for 2026–27 the governor must declare a disaster and federal assistance (FEMA) must be awarded; for the 2025–26 budget the district is using relief tied to the 2024 hurricane because that event already satisfied the governor and FEMA steps.

He told trustees that disaster declarations are temporary, typically applied for a single year, and that a permanent option is a voter-approved tax-rate election. “A voter approved tax rate election is not new to the district,” he said, noting a prior election roughly 10 years ago that covered the full 17¢ of tier‑2 pennies. If voters approve the election, those pennies become a permanent part of the tax rate; otherwise maintaining the pennies from year to year requires a board resolution tied to an eligible disaster.

Board members asked timing questions. A board member noted the board had previously passed a disaster declaration and asked how long it remains available. Dr. Magallanes answered that a resolution must be approved before the board sets the tax rate (typically in August) and that the tax-code timing means the most recent flooding would apply to the 2026–27 year; the district is using the 2024 hurricane for the 2025–26 budget.

The presentation included an example of homeowner impact using Hidalgo County appraisal district figures: with the proposed tax rate staying at about $1.12 and the current average taxable home value, a homeowner with a homestead exemption would pay roughly $242 for Mercedes ISD taxes; if a proposed increase in the homestead exemption (to $140,000) passes in November, that same average home (projected market value $143,000) would have taxable value of about $3,500 and pay roughly $39 for the district—a $202 reduction even with the tax rate unchanged.

No formal board action on disaster declaration or a voter election took place during the workshop; the presenter said a disaster-declaration resolution would need board approval in the future before the tax rate is adopted.