Empire's school board is opening a discussion Thursday about tens of millions of dollars in extra property taxes that homeowners are paying because of a series of financial moves the district adopted since the 1980s.
The so-called Mello-Roos property tax district has collected more than $43.2 million in extra taxes, and it is on track to collect $123 million by 2032.
The added tax burden is to pay off $25.6 million in school construction, which was funded by loans from investors who bought tax-exempt bonds.
Some of those investors were guaranteed they could collect interest on those loans through 2032, so the district cannot reduce its costs by paying off the debt early.
Because bond payments are so high, Empire schools consistently has raised property taxes every year since 1987. Many southeast Modesto homeowners pay an extra $450 per year in school taxes, and that tax rate keeps climbing.
Empire's enrollment, meanwhile, has plummeted back to what it was in 1987, before the bonds were sold and the debt incurred. The district built three schools with those extra taxes, but now it doesn't need all its campuses.
School district officials who supported measures to create the tax district and issue school construction bonds were unaware of the total costs to taxpayers until The Bee earlier this month published a story detailing the financial burden Empire's Mello-Roos district has caused.
The Empire board meets at 6:30 p.m. Thursday in the district office, 116 N. McClure Road, Modesto.
Bee staff writer J.N. Sbranti can be reached at jsbranti@modbee.com or 578-2196.
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