In the Nov. 5 election, voters may cast their ballots for or against Proposition B, which would allow LHISD to purchase attendance credits needed to make recapture payments. The attendance credit election accompanies a voter-approval tax rate election to raise its tax rate through Proposition A.
How it works
Each year, the Texas Education Agency calculates how much local revenue a school district is entitled to through a series of complex formulas. Districts must then pay the state any local property tax revenue exceeding their entitlement.
LHISD is asking voters to approve a maintenance and operations tax rate of $0.7269 per $100 valuation that would require the district to begin paying recapture, Chief Financial Officer Rosanna Guerrero said. LHISD would still need to hold an attendance credit election and begin paying recapture by 2026 if it did not call a VATRE this year, Guerrero said.
If voters do not approve Proposition B, the state could seize property values in LHISD and redirect those property tax dollars to other school districts, Guerrero said. Approving the proposition would allow LHISD to maintain local control of its property values, she said.
The impact
The district is projected to pay around $618,000 in recapture for FY 2024-25. LHISD is anticipating these payments could increase each school year as they have historically done so across other districts, Guerrero said.
Paying recapture could pose challenges for LHISD by limiting the amount of local funding it can put toward maintenance and operations expenses, which are growing alongside student enrollment, she said.
“The recapture system... really impacts the district's ability to maintain the level of programming and education and be able to pay our teachers the salary that they deserve when the state is taking away this revenue,” Guerrero said.
Also of note
Through Prop A, LHISD is seeking to raise its tax rate by almost $0.06 at an additional $253 yearly cost to homeowners. This comes as the district is facing a $7.5 million budget shortfall for fiscal year 2024-25 and is projected to deplete its fund balance in the coming years.
The tax rate increase would result in $6.2 million in additional revenue for the district that could go toward teacher raises and student programs, district officials said.
The backstory
The Texas Legislature established recapture in 1993 as a means to redistribute property tax dollars from property-wealthy districts to property-poor districts.
“The state described it as a Robin Hood, taking from the rich school districts to give to the poorer school districts,” Guerrero said. “However, that's not what has been transpiring.”
Texas school districts pay billions of dollars in recapture each year, however, it is unclear how the state is using these funds, Guerrero said.
Dates to know
Early voting began Oct. 21 and runs through Nov. 1 ahead of Election Day Nov. 5.
Residents can vote at the Liberty Hill ISD gym annex at 301 Forest St., Liberty Hill. Visit the Williamson County website to view more polling locations.
