Judge rules for plaintiffs in KISD tax suit

Ruling: District was out-of-bounds when it dropped exemption in 2015

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Kilgore ISD officials violated state tax codes in 2015 when they dropped the district's homestead exemption, a Gregg County judge ruled Thursday.

Multiple plaintiffs are suing the school after KISD dropped its 2014 local option homestead property tax exemption in June 2015, an effort trustees said was aimed at retaining local control over the 20 percent tax break.

The 5-2 vote that summer fell two weeks after Texas Gov. Gregg Abbott signed the 84th Legislature's Senate Bill 1 into law, changing codes to prevent taxing entities from reducing or repealing the 2014 exemption. Months later, voters statewide approved the constitutional amendment, adopting the tax change retroactively to Jan. 1, 2015.

Judge Vincent Dulweber of Gregg County Court of Law No. 2 issued a ruling Dec. 7 in Darlene Axberg. et al v. Kilgore ISD, et al, granting a motion for summary judgment by the three plaintiffs.

“On June 29, 2015, Defendants rescinded the School District's Homestead Exemption that had been adopted by the School District for the 2014 tax year,” Dulweber wrote. “The Court further finds, as a matter of law, that Texas Tax Code Section 11.13 (n-1) precluded Defendants from rescinding the School District's Homestead Exemption on June 29, 2015.”

On the defendants counterclaim that the claims of plaintiffs (and intervenor) are frivolous, Dulweber ruled in favor of the plaintiffs.

“The Motion for Summary Judgment of Plaintiffs and Intervenor is hereby Granted as to the effective date of SB 1 and Texas Tax Code Section 11.13 (n-1),” Dulweber concluded.

Learning of the ruling Thursday afternoon, Kilgore ISD Chief Financial Officer Revard Pfeffer had no immediate response to the news.

“The district is reviewing the decision and will discuss its options at the next board meeting,” Pfeffer said via email.

After dropping the exemption and facing the lawsuit, the school district ultimately set the related tax revenues aside – pending the resolution of the dispute.

From those collections to date, “The number that was given to the board at last month's board meeting in the capital needs discussion was $4,324,973,” Pfeffer noted via email Thursday afternoon.

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