As Plano ISD wraps up its budgetary season, the looming reality that the district will likely send more property tax revenues than ever to the state continues to weigh heavily on the board of trustees' budget discussions.
Trustees agreed on Tuesday to publicly advertise a property tax rate of $1.439 per $100 property valuation for the next fiscal year, a rate unchanged from the previous year. With property appraisals on the rise, revenues collected by the district are expected to climb—but much of that money will go to the state in the form of recapture payments.
Trustees also approved legislative priorities aimed at addressing the state’s recapture policies. The state’s recapture practice was initially adopted to send money from “property wealthy” school districts to poorer districts.
The proposed $1.439 per $100 rate is the same rate adopted in the last three years. That rate is broken down into two categories: $1.17 per $100 valuation for the district’s day-to-day operations, and $0.269 per $100 valuation for the district’s debt-service payments.
The district will adopt its final tax rate in September, according to a district presentation on Tuesday.
Board Vice President David Stolle said the increase in recapture payments is a trend that he said cannot continue.
"When people ask us, ‘Why can’t you just reduce taxes so you are collecting the same amount and spend the same amount that you spent last year?’” Stolle said, "the reason is that the state has a voracious appetite for our tax dollars, and it is not going to stop unless something drastic happens.”
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The maximum rate Texas school districts are allowed to tax for maintenance and operations is $1.17 per $100 valuation, which is PISD’s current rate, PISD Assistant Superintendent for business services Randy McDowell said at Tuesday’s meeting.
As the district’s recapture payments have crept up, PISD has few options but to remain at the maximum allowable tax rate without losing more revenue, McDowell said in a recent interview with Community Impact Newspaper.
“If we can reduce the tax rate and the first thing that came off was recapture … —dollar for dollar that we just send less money to the state—obviously we would do that,” McDowell said in the previous interview.
The board of trustees voted to approve a list of legislative priorities ahead of the 2019 legislative session. One of the priorities was in support of providing school districts flexibility in adjusting its maintenance and operations tax rate, which is the tax rate subject to recapture.
Currently, Texas school districts are allowed to decrease their maintenance and operations tax rate without a tax ratification election, but are required to hold a tax ratification election if they want to increase that tax rate—even if the increase is to the rate previously approved by voters.