Some McKinney ISD homeowners can expect an almost $700 decrease on their yearly tax bill with the district’s new tax rate.

The MISD board of trustees approved the lower tax rate for fiscal year 2023-24 in a 6-1 vote Aug. 28. Trustee Chad Green voted against the resolution.

The new tax rate is $1.1275 per $100 valuation, according to the board’s resolution. The FY 2022-23 rate was $1.3129.

“That is an 18.5-cent reduction per $100 valuation, which should make the taxpayers very happy,” MISD Chief Financial Officer Marlene Harbeson said during the meeting.

The overview

The tax rate is split into two categories.
  • The maintenance and operations rate covers the district’s operational expenses, such as payroll. This rate is $0.7575 per $100 valuation.
  • The debt service, sometimes referred to as interest and sinking, goes toward paying a district’s principal and interest on debts. The district's debt service rate is $0.37 per $100 valuation.
The background

MISD homeowners will see a reduction in their tax bill thanks to an $18 billion tax relief plan from the Texas Legislature.

Senate Bill 2, passed during a special legislative session this summer as part of the package, increased the homestead exemption to $100,000 for homeowners under age 65 and to $110,000 for homeowners over age 65. This means residents whose homes are worth $100,000 or less will not pay any property taxes to their local school districts.

The district received its certified property values from the Collin Central Appraisal District on July 24, Harbeson said.

The average single-family home in McKinney has increased about $74,000 to around $567,500 in 2023, according to the meeting presentation. With the tax compression, Harbeson said the owner of an average family home can expect their tax bill to decrease by $683.

“SB 2 was significant in the way it impacted our rate,” she said. “It set that floor even lower so that there would be even more tax compression, which is the equivalent of a reset, essentially.”

What else?

With SB 2 decreasing local property tax revenue for the district, Harbeson said the district can expect its recapture payment to decrease from $15 million to $5 million. Recapture, also called Robin Hood, redistributes property tax dollars from property-wealthy districts to those considered property-poor by the Texas Education Agency.

“There are some bonuses [of Senate Bill 2], that’s for sure,” Harbeson said.