A Sense of Balance:
GISD Tax Rate
Understanding the difference between M&O and I&S
Just like in your own household, managing a school district’s budget takes both dollars and sense. The local tax rate is divided into two main parts, each with its own purpose—and its own rules for how the money can be used.
Maintenance & Operations (M&O)
is the portion of the budget that funds day-to-day needs. These dollars keep the district running—paying for staff salaries, classroom supplies, utilities, and student transportation. It’s similar to the part of your personal budget that covers groceries, gas, and monthly bills.
M&O keeps the district operating smoothly each day. I&S helps us invest in the future. Both funds are essential, but they aren’t interchangeable—and understanding the difference helps make sense of how school dollars are spent.
The only real way to increase the M&O side of the budget is to improve attendance, increase enrollment or call a Voter-Approval Tax Ratification Election.
Interest & Sinking (I&S)
is reserved for long-term investments like building schools, renovating facilities, or making major safety improvements. These dollars come from bonds approved by voters and can only be used to repay that debt. Think of it like a home loan: the money you borrow to build or renovate your home can’t be used to pay for everyday expenses.
I&S tax collections cannot be used to pay staff salaries or cover daily operating expenses. Most districts in Texas don’t have enough money in their M&O budget to cover construction and capital improvement expenses.
The only way to borrow money for larger construction-related capital improvement expenses, is to ask voters to consider a school bond election to incur and pay back debt.
Understanding our Local Tax Rate
Every dollar collected through local property taxes goes into one of two funds—each with a very specific job:
- Maintenance & Operations (M&O) Rate – $0.6757 per $100 of assessed property value. These dollars support everyday expenses like salaries, supplies, and services that keep the district running.
- Interest & Sinking (I&S) Rate – $0.3106 per $100 of assessed property value. These dollars are dedicated to repaying bonds used for construction and major facility improvements.
That adds up to a total tax rate of $0.9863 per $100 of assessed value.
M&O Rate
Maintenance & Operations
$0.6757
per $100 assessed valuation
I&S Rate
Interest & Sinking
$0.3106
per $100 assessed valuation
total tax rate
$0.9863
per $100 assessed valuation
Tax Rate History for Graham ISD
When Property Values Rise, State Funding Falls
Over the past six years, GISD’s total tax rate has dropped by nearly 36 cents—a significant decrease, largely driven by changes in state law. That sounds like good news (and it is), but here’s where sense matters just as much as dollars:
- Even when property values go up, GISD doesn’t automatically receive more funding. In fact, under current Texas school finance laws, as property values increase, we are forced to lower the tax rate.
- Increases in local property values often mean the state reduces its share of funding to the district. So while your property tax bill may rise due to increased property value, those extra dollars don’t stay with your local schools.
- Higher property values don’t mean more money for GISD. Understanding how taxes and funding interact helps explain why more money in one area doesn’t always add up to more resources in the classroom.
