The Cy-Fair ISD board of trustees unanimously approved a property tax rate of $1.3392 per $100 valuation for fiscal year 2021-22 at its Sept. 13 meeting.
Originally posted at 10:20 a.m. on Sept. 10
Cy-Fair ISD Chief Financial Officer Karen Smith recommended Sept. 9 the board of trustees approve a property tax rate of $1.3392 per $100 valuation for fiscal year 2021-22—a decrease from $1.3555 per $100 valuation in fiscal year 2020-21. The board is slated to approve the official rate at its Sept. 13 meeting.
House Bill 3 passed in 2019 requires school districts to lower their tax rates when they see a 2.5% or more increase in property values year over year. CFISD's proposed tax rate compression is based on a 6% increase in property values, Smith said.
The no-new-revenue tax rate, or the rate that would produce the same amount of revenue as the previous year, would have been $1.3156. Because the proposed rate is higher than the no-new-revenue rate, HB 3 requires the board to adopt its tax rate using language that states they are increasing the rate.
In addition to this required phrase, CFISD’s board last year added language to their motion and resolution clarifying the tax rate itself was decreasing year over year. That same language will be included in the resolution to be approved Monday, Smith said.
“I would not vote to approve this without that addition to the resolution because I find it offensive that the state requires us to make a statement that we are increasing our tax rate when we are in effect decreasing it,” trustee Julie Hinaman said.
Hinaman went on to explain how the state “penalizes” the district for offering property tax relief to local residents through an optional 20% homestead exemption, which saves the average homeowner about $685 annually, according to the district.
Smith confirmed the district loses out on about $118 million in revenue through local property tax exemptions and an additional $17 million in state aid because the state does not account for the optional 20% homestead exemption when calculating its share of funding for public schools.
The board approved a $1.09 billion budget for FY 2021-22 in June, which included an $88.5 million deficit. At the time, district officials projected 41.5% of their revenue would come from the state while 56.5% would come from local property taxes. Superintendent Mark Henry expressed confidence in the state of the district's finances despite this anticipated deficit.
“Even though we have relatively stable revenues, the job that Karen and her team have done to continue to make sure that our budget is balanced is amazing,” Henry said. “Even through a worldwide pandemic where we had a lot of extra expenses, Cy-Fair ISD was able to function with a balanced budget.”