Revised funding formula translates to extra cash for Richardson ISD

Recent legislative changes will bring millions of dollars in additional revenue to Richardson ISD this school year.

House Bill 3, signed into law June 11 by Texas Gov. Greg Abbott, drastically altered the Texas public school funding formula. But some districts fared better than others, RISD Chief Financial Officer David Pate said.

“Any time the state makes legislative changes in the funding formulas, there are winners and losers,” he said. “We benefited; some may have lost.”

Overall, the district’s general fund revenue will increase by $20.6 million, or 6% year over year. This stands in stark contrast to the finances of Plano ISD, which kicked off school year 2019-20 with a $16.2 million deficit.

One primary goal of HB 3 was to reduce recapture payments, or the money property-wealthy districts send to the state each year to subsidize costs incurred by property-poor districts.

RISD owes 92% less in recapture this year than it did in school year 2018-19, Pate said. Neighboring PISD is also projecting a decrease but is still on the hook for $160 million.

Also skewing the budget in RISD’s favor are demographics, which now play a more significant role in determining how much money school districts receive from the state, Pate said.

RISD will see an additional $5.4 million in state funding—a 17% annual increase—for students classified as low-income, according to Pate. It is also poised to receive more money for special education, bilingual and pre-K students.

To free up money for high-need students, the state reallocated funding from other areas. One group the district will now have to pay for in full is its gifted and talented students, Pate said.

“We are still going to serve those students like we always have, and strive to always improve their performance,” he said.

The state also mandates that school districts allot a certain percentage of money toward teacher compensation. RISD has gone above and beyond what is required, Pate said.

The district’s budget includes $7.5 million for compensation of teachers, librarians, counselors and nurses. This reflects a 34% increase over the state requirement, according to district data. “Our district did not want to just reach the mandate,” Pate said. “[The board] cared about what was right for our staff.”

HB 3 was coupled with the state’s effort to provide taxpayer relief. Under the new law, the district’s property tax revenue, combined with funding from the state, cannot push RISD’s annual revenue past 2.5%, Pate said.

To stay within that cap, RISD trustees voted Aug. 27 to lower the district’s maintenance and operations tax rate by just over $0.10 to $1.06835 per $100 valuation. The district estimates this should save the average RISD homeowner about $157 per year.

Residents should continue to see a reduction in the district’s operational tax rate. So long as property values continue to increase, Pate said, “it should only go down.”



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