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Lexington ISD faces challenging budget cuts after mine closure

Lexington ISD is struggling with how to balance an anticipated $700,000 budget shortfall. That's the worst-case scenario after a mine outside of Elgin started shutting down this year. (CBS Austin)

Lexington ISD is struggling with how to balance an anticipated $700,000 budget shortfall. That's the worst-case scenario after a mine outside of Elgin started shutting down this year.

The small community, about 40 miles east of Austin, hasn't seen their school district tax rate increase in a decade. However, this year that rate could jump to the state maximum after Luminant -- a major payer on their property tax role -- shuttered their Three Oaks Mine.

"There's been rumors for years that there's the possibility of a closing but it finally came to pass in January," says Lexington ISD Superintendent Tonya Knowlton.

Knowlton says LISD is preparing to lose 10 percent of their budget -- about 700,000 -- next school year.

"In a district this size, the only way you can cut $700,000 is people and programs and we really don't want to do that," she says.

Lexington currently has one of the lowest tax rates in the area at $1.04 compared to surrounding communities like Dimebox, Elgin and Rockdale whose districts set a tax rate of $1.17. Statewide, 508 school districts tax at a higher rate than LISD and 401 of them tax at the state maximum of $1.17. However, even maxing the tax rate out wouldn't solve all of LISD's problems.

"We would still not be at the revenue that we currently have," explains Knowlton.

Monday night, Lexington residents gathered to learn more about the funding challenges facing the district. Taxpayer Ricky Parker doesn't want to see their schools suffer.

"I don't like higher tax and I don't want one, but I feel like that's what's needed. If we can help out more -- instead of relying on maybe the state coming in in two years to try to bail us out-- that'll go a lot further," Parker says.

Other taxpayers expressed frustrations that the city and the district weren't exploring enough options and were too focused on raising the rate as the primary solution.

The typical Lexington homeowner with a $100,000 home would pay about $11 more in taxes per month. That number isn't so small for the area's farmers and ranchers who own large plots of land with tax rates that can't be frozen and aren't eligible for homestead exemptions.

"We're not trying to build anything new. We're not trying to add a new program or do anything new and different. We just want to keep going forward with what we already have in place," adds Knowlton.

In the months ahead, the district will have to figure out a way to make ends meet. Increasing the tax rate would have to be formally proposed by the school board and voted on by Lexington taxpayers.

Luminant, the company closing the Three Oaks Mine, said in a statement:

Luminant is sympathetic to the Lexington ISD's challenges and to the taxing entities and communities around Sandow Plant and Three Oaks Mine. Closing the mine, which supported the Sandow plant, was a difficult but necessary decision given that the plant had been economically challenged for some time.
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