The increase means more dollars will come to the school district’s maintenance and operations budget through tax collections. However, this increase is expected to be offset by the increase in recapture payments the district will have to send to the state as well as a decrease in state-allocated dollars.
“As your local values go up, your state funding decreases,” LISD Chief Financial Officer Pete Pape said. “As throughout the state local values go up, the state is the benefactor of those market conditions.”
Recapture is Texas’ tool to remove property tax dollars from certain districts, which are then redistributed to assist in financing all public schools. According to a report by the Texas School Coalition, around $5 billion is taken in recapture from districts per year. At LISD, the money it sends back to the state every year comes from its maintenance and operations funding, and with a projected increase of 9.83% in property value, the district is expecting to pay an additional $9.3 million to the state for a total of $58.3 million.
Meanwhile, projections show recapture payments will continue to increase unless the Texas Legislature makes changes to the law. According to Pape, LISD is projected to pay around $81.9 million in recapture funds in 2024-25 and $109 million in 2025-26.
The latest property value assessments come as LISD is conducting a compensation review. The LISD board of trustees is expected to vote on a potential salary increase for employees in the months ahead.