Recapture—also known as the Robin Hood plan—requires property-wealthy districts to make payments to the state, which are then redistributed to property-poor districts.
According to William Wooten, CISD assistant superintendent for financial services, there has been a “systemic recapture reporting error.” He said the district makes payments from its maintenance and operations fund to Southlake’s tax increment financing district. But the district’s finances reported the revenue as earned rather than payments made, resulting in TEA over-collecting recapture funds.
“It is a really good thing,” said Wooten, who joined CISD in August 2020. “That money will potentially eliminate a budgetary deficit.”
Southlake’s tax increment financing district provides a mechanism to fund development in the southeast area of the city and on CISD properties. The financing district also protects a portion of the revenue Carroll ISD earns from property taxes in that area from being used in calculations for recapture payments.
Wooten said he began digging through previous reports after receiving a letter Sept. 27 from TEA stating the district had an outstanding recapture balance of over $2.5 million. Wooten said that did not seem right and eventually discovered the error.
Before the error was discovered, CISD estimated it would pay more than $28.6 million in recapture to the state this school year.
CISD recently received $1.9 million from TEA for the overpayment made in fiscal year 2019-20 and received $72,981 for fiscal year 2020-21. According to TEA, the 2019-20 recapture refund was transferred to the 2020-21 school year’s fund balance. Standard TEA practice allows for corrections only going back three years, while state law allows for revisions up to seven years back, according to TEA.
“TEA said they only want to go back three prior years, but I need for them to go back at least 10 years, so we got a lot of work to do,” Wooten said.
CISD recently approved its budget for fiscal year 2021-22. The board of trustees approved the levy of the fifth golden penny—additional funding from the state that is protected from recapture—in September to bring in additional revenue while lowering the tax rate.