School board trustees discussed three different options for the property tax rate at their Oct. 3 work session and will make their final decision at the Oct. 7 board meeting.
The options
CFISD’s finance team presented three property tax rate options Oct. 3. Community Impact previously reported the current tax rate of $1.0811 per $100 valuation was the lowest adopted rate in 37 years.
The state’s public school funding system allows school districts to access additional “disaster pennies” in the year following a disaster declaration to help cover costs incurred by events such as hurricanes and floods.
These pennies are only available for one year, but they allow the district to bring in more property tax revenue without holding a tax rate election, CFISD Chief Financial Officer Karen Smith said.
The National Weather Service reported a tornado hit southeast Harris County on the afternoon of Jan. 24, 2023. While CFISD didn’t have extensive damage from this event, Smith said the district incurred additional insurance costs.
- Insurance premiums increased 39% for the district.
- The district’s windstorm deductible went from $100,000 per building to 3% of the building’s value.
“Just like homeowners, these recent disasters have impacted our premiums and our deductibles,” Smith said.
Remember this?
The board unanimously approved a $1.16 billion budget for FY 2024-25 in June. This included a $77.5 million shortfall even after the district eliminated hundreds of positions and cut back on transportation services.
CFISD also offers a local optional homestead exemption of 20% of the appraised value of a home. While this saves the owner of a home valued at $350,000 about $761 in taxes each year, the overall impact of this exemption results in $63 million in lost revenue to the district annually, Smith said.
Community Impact previously reported state lawmakers passed a law last year prohibiting districts from removing local optional homestead exemptions until 2028.
Over the past several years, the Texas Legislature has passed laws to provide property tax relief to homeowners by compressing school district tax rates.
District administration is recommending the $1.0869 per $100 valuation tax rate option for FY 2024-25. Superintendent Doug Killian said the additional $33.9 million officials expect this would bring in would offset the budget shortfall and help the district avoid further budget cuts in FY 2025-26.
“I just would caution [trustees] about not going ahead and doing the disaster pennies because it will set us up to where we potentially don’t have to make cuts next year,” he said. “We can use some of our fund balance, and then if it doesn’t happen then we’re going to have make some decisions in [20]25-26 during that school year about what we’re going to do because we won’t have a legislative session coming up.”
In the meantime, Killian said the district would be advocating at the next legislative session starting in January for:
- The district to not be penalized for offering a 20% local optional homestead exemption
- The Texas Legislature to help close funding gaps in underfunded areas such as special education, safety and security, and transportation
“I’m concerned, obviously, about taxing our neighbors and our community to put anything on them,” trustee Christine Kalmbach said. “I know it’s a very difficult and awkward position that we are in. I’m concerned about raising taxes on our community.”
Looking ahead
The board will vote of the FY 2024-25 property tax rate Oct. 7. The meeting starts at 6 p.m. at the Mark Henry Administration Building, 11440 Matzke Road, Cypress.
