This rate decrease is a result of House Bill 3, a new school finance law Gov. Greg Abbott signed in June. Under the new law, GCISD will receive less state and local funding from property taxes, but it will also be required to pay less back to the state in recapture payments.
Overall, HB 3 will result in a yield of about $3 million in new funding for GCISD, according to previous reports by Community Impact Newspaper. All of it will go to required teacher and staff pay increases.
Based on an average home value of $375,663, the newly adopted tax rate would save GCISD homeowners about $263 in taxes annually, GCISD Chief Financial Officer DaiAnn Mooney said during a tax rate presentation. Homeowners, then, would pay about $4,984 in taxes to the school district rather than $5,247.
A portion of property tax revenue is used for maintaining and operating the school; another is used to pay for voter-approved bond projects, Mooney said.
This means $2,444 of the projected $4,984 in annual individual property tax would be used for daily operational costs for the district, such as salaries, security and transportation, according to Mooney’s tax rate presentation. About $1,340 would be used to pay for bonds, and the remaining dollars would be sent back to the state.
Meanwhile, because of the district’s strategic debt management, it recently received a bond rating upgrade—to an AA+ score—from Standard and Poor’s rating system, Mooney said.
“GCISD is one of only 21 Texas school districts that have this rating,” she said. “It’s also the highest rating that S&P offers Texas school districts.”
An AA+ rating indicates to investors the school district is a low-risk investment and provides lower interest rates, Mooney said. This means millions of dollars in interest savings for the district and taxpayers.
“The most important thing, I think, is just the assurance to our community that we have strong financial stability and management,” Mooney said.