Midlothian Taxes & COVID-19 Impact

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Taxes – Revenue and Expense – How they affect Citizens and Governments

Part Two of a three part series on Midlothian

Taxes are not a fun subject for citizens or elected officials. Unfortunately, however, it is a necessary part of life, both for residents and for elected officials. Without taxes, there can be no local services such as police, fire, schools, teachers, libraries, parks, and other benefits citizens need, but often take for granted. Elected officials tend to view them from the opposite side of the spectrum as citizens. Taxpayers would prefer that every tax dollar they spend would provide three dollars worth of services, while elected officials usually find it is difficult to provide even a dollar’s worth of services for each tax dollar received.

The catch comes in trying to come as close as possible to a perfect balancing act – something that is always difficult, but even more so in a period such as this, with Covid-19 impacting all sides. Many citizens find themselves underemployed or unemployed and already unable to pay their bills at a time when they need the most assistance. Government officials, on the other hand, are being asked to provide more goods and services with fewer funds because less taxes are coming in.

When asked how Midlothian is faring in funds, both Councilman Justin Coffman and Midlothian ISD Member Andrea Walton said the greatest impact has yet to come. The city is currently operating on sales and property tax revenues that came in before Covid-19 struck. Schools only receive property taxes, although there is an amount of revenue-sharing from the state depending on how many students attend school on a regular basis. Both the city and the school system are living on budgets formed last year as well as living on revenues projected at that time.

The Impact Of COVID-19

Councilman Coffman said that the first quarter’s sales tax revenues were only slightly affected by Covid-19. There is a lot that is unknown concerning future sales tax numbers. The complete impact of Covid-19 is not yet known. Councilman Coffman relates: “We are praying for the best but preparing for a potential downturn as well.”

The school system has been significantly impacted with all students having their spring break extended by a week, and then having school resume only on a virtual basis for the entire remainder of the spring term. While all parents feel the impact of this directly because they have now become “hall monitor, disciplinarian, and principal,” the teachers and administrators in the school system truly had to move mountains to completely put together the remainder of the spring semester so it could be taught on a virtual basis.

While some expenses decline to a degree with the “virtual learning” system, others do not, which means the spring semester will be somewhat close to a wash in terms of costs and revenues. The fall, and next year, however, will be a different story.

Board Member Andrea Walton points out that Jim Norris, Chief Financial Officer of Midlothian ISD has projected that the district should actually be able to bring in 11 percent of the 15 percent increase in Ellis County property tax valuations that had been expected this coming year. She continued that it is complicated because projections need to be completed in June but actual property tax numbers don’t come in until July and aren’t finalized until August, so even under ideal conditions it is a guessing game. She notes that Mr. Norris has spent 50 years in Midlothian education accounting, and she places a great deal of confidence in his calculations.

See Part 3, The Fall Semester in Midlothian ISD -What to Expect
To be continued next Sunday ……