A financial projection for fiscal year 2026-27 shows slowing growth in property tax values for homes within McKinney ISD, which impacts the district’s funding.
The district received certified property tax estimates at the end of April from the Collin Central Appraisal District, McKinney ISD’s Chief Financial Officer Marlene Harbeson said during a presentation at a May 18 meeting.
With the certified property tax estimates, MISD is projecting $277 million in revenue and $281 million in expenses, resulting in a nearly $4 million shortfall.
Zooming in
The certified property tax estimates show a 2.75% increase in property values, Harbeson said. When predicting the district’s revenue for fiscal year 2026-27, Harbeson predicted a 4% increase in property tax values. The 2.75% increase is the lowest the district has seen in the past 10 years, she said.
“The average single-family home is down [in value] a little over $8,000, which is a good thing if you’re a taxpayer,” she said. “Lower values mean a lower tax bill.”
However, local property taxes are a significant source of revenue for the district, according to district documents.
Diving deeper
The district’s tax rate is made up of two parts, maintenance and operations, or M&O, and interest and sinking, or I&S. MISD’s total tax rate has been decreasing over the past five years, per district documents.
“The reduction from the state continues to reduce the M&O tax rate,” Harbeson said. “That’s going to continue to happen each year.”
In addition to a compressed tax rate, the district is predicting a $500,000 increase in recapture, Harbeson said.
MISD is predicting an M&O tax rate of $0.7328 and an I&S tax rate of $0.32 for a total tax rate of $1.0528 per $100 valuation, according to Harbeson’s presentation. While the state dictates the M&O rate, the district sets the I&S rate.
“We are going to be lowering the debt service tax rate, the I&S rate, from $0.37 to $0.32, and make no mistake, this isn’t an accident,” Harbeson said. “It’s due to our prudent and strategic management of our debt.”
What’s next
There are a number of factors that could change the current projections like average daily attendance numbers, decreasing school health and related services revenue, and other legislative decisions, Harbeson said.
The board of trustees will continue budget discussions at its June 29 meeting.
