Cy-Fair ISD board members unanimously voted to approve a tax rate of $1.3555 for 2020-21, a decrease from last year’s $1.37 rate. Because this is one penny higher than the effective tax rate, the district anticipates an increase in revenue over last year despite the lower rate, Chief Financial Officer Karen Smith said.
Originally posted Sept. 10 at 7:18 p.m.
Cy-Fair ISD board members will decide Monday, Sept. 14, whether to decrease the tax rate from last year’s $1.37 per $100 valuation to $1.3555 per $100 valuation for fiscal year 2020-21 as recommended by the district’s finance team.
While this proposed rate is a decrease over the previous year, it is one penny higher than the effective tax rate, or the no-new-revenue tax rate that would produce the same amount as the previous year, Chief Financial Officer Karen Smith said during the Sept. 10 board work session.
“The district will be able to access additional revenue which will ultimately benefit students while decreasing the tax rate for our taxpayers,” she said. “This only really occurs when there’s further compression of the tax rate.”
Following changes passed in the most recent state legislative session through House Bill 3, Smith said the method by which school districts calculate tax rates has become more complex.
The district’s effective tax rate for FY 2020-21 is $1.3455, but Smith said the board has the option to approve the addition of another penny, which would bring in approximately $11 million more in funding if the board unanimously agrees. This funding would be a combination of local property tax revenue and state aid funding, she said.
Smith said this funding would help offset the $39.8 million shortfall projected for the FY 2020-21 budget.
Additionally, she said she expects state funding to decrease in the upcoming legislative session. CFISD saw a $47 million decrease in funding in the aftermath of previous economic downturns, she said.
“Due to the COVID-19 pandemic as well as the oil and gas crisis, districts fully expect during the next legislative session that tough decisions will have to be made,” Smith said.
Trustee Don Ryan said that despite the board approving lower tax rates over time, he still hears feedback from homeowners who end up paying more money each year due to increased property values. Smith noted that the owner of a home valued at $200,000 would see their tax bill go down by an average of $20 this year.
CFISD offers an optional homestead exemption which allows taxpayers to benefit from a 20% reduction in their home value before property taxes are calculated. Smith said because of this optional benefit for local homeowners, the district collects less tax revenue.
The board is expected to vote on the FY 2020-21 tax rate Sept. 14 at 6 p.m. Community members can attend the meeting at 10300 Jones Road, Houston, or tune in live at www.cfisd.net.