Montgomery ISD has been ordered to pay $3.1 million for fiscal year 2022-23 under the state’s excess local revenue—or recapture—law, district leaders announced Oct. 17.

What’s happening?

Under Section 48.257 of the Texas Education Code, Texas school districts can be required to “share their local tax revenue” with others in the state, according to the Texas Education Agency’s website. MISD has paid about $9.6 million in recaptured funds to the state under this law since 2013, according to an Oct. 17 presentation from Justin Marino, MISD’s chief of staff and communications.

A school district is required to pay recaptured funds when they are considered “property wealthy” by the state, Marino said.
  • Since 2013, MISD’s net appraised property value has more than doubled from $4.16 billion to $8.89 billion, according to Marino’s presentation.
“Three million dollars [in recaptured funds] is a lot of money for our budget,” Marino said. “We have a budget of $78 million. Three million dollars is ... nearly a 4% raise for our employees.”

Even if a school district were to refuse to pay recapture funds, the state would detach the district’s commercial properties and “annex them to a neighboring district,” Marino said.

Put in perspective

According to Marino’s presentation:
  • MISD’s allotted amount per student has increased about 13%—from $5,926 to $6,688 per student—since 2013.
  • The highest amount of recaptured funds MISD has paid since FY 2013-14 was $3.6 million for FY 2018-19.
  • About $5 billion per year is collected statewide through recapture.
What trustees are saying

On Oct. 17, trustees approved the district’s recommendation to buy attendance credits—the method used for districts to pay recaptured funds, Marino said. However, the motion passed 5-1 with trustee Matt Fuller dissenting and trustee Trey Kirby absent.

“We as the taxpayers have no clue where that money went,” Fuller said. “We don't know if it went ... to the poor districts to help a kid that really need[ed] it, right? ... As you can tell, I'm a little irritated by this. This is my open call to lawmakers to act to the same level of accountability that they hold us to.”

Trustees who voted in favor of the district’s recommendation also expressed concern about the state’s recapture laws, including Vice President Nate Robb.

“This is ridiculous,” Robb said.

What the district is saying

“There's a lot of work that we put into [having] conversations with our lawmakers about addressing the items that have negatively impacted MISD,” Marino said. “From a per-student funding standpoint, recapture is certainly one of those.”