After state funding changes to education, Round Rock ISD budgets $0 for recapture payments

The school district expects to not have to pay any funds to the state for recapture after legislative changes this year.

The school district expects to not have to pay any funds to the state for recapture after legislative changes this year.

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The funding formula
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How House Bill 3 affects local school districts
Ahead of state lawmakers convening in downtown Austin last spring, Round Rock ISD documents show the district estimated it was likely on the hook to pay more than $58 million back to the state in property taxes in the 2019-20 school year under Texas’ public education funding formula—otherwise known as recapture.

After Gov. Greg Abbott signed House Bill 3 into law June 11, though, the school district has since budgeted its recapture payments at a much lower sum: zero dollars. RRISD now states it will not have to send recapture funds back to the state until at least when the Texas Legislature reconvenes in 2021.

HB 3 is one of the largest education funding overhauls in the state’s history, state lawmakers said.

“I am proud to sign into law transformative legislation to fix our school finance system,” Abbott said June 11 at a signing ceremony for the bill.

The Texas Education Agency states on its website HB 3 allocates additional money to Texas classrooms, increases teacher compensation and cuts recapture payments.

The state is reducing recapture by amending the public education funding formula it has had in place since 1993. Previously, Chapter 41 districts—now Chapter 49—which the TEA designates as those that must share their local property tax revenue, paid recapture if property wealth per student exceeded $319,500 and if a district’s maintenance and operations tax rate rose above $1.06, or if property wealth per student exceeded $514,000 regardless of the tax rate.

After HB 3, the new recapture formula is based on local revenue “in excess of entitlement instead of equalized wealth levels,” the TEA said in a July 25 letter to school administrators. The TEA estimates that recapture payments will be reduced from $3.6 billion to $2 billion total for the 2019-20 school year.

The TEA on its website states HB 3 has increased allotments for school districts, resulting in fewer total collections.

Many school districts, including RRISD and Pflugerville ISD, have praised the bill for serving immediate district needs. But Austin ISD—historically, the largest remunerator of Chapter 49 funds throughout the state—is still scheduled to be on the hook for hundreds of millions of dollars in recapture, regardless of the new bill.
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