Randy McDowell, Chief Financial Officer, presented on the tax rate for the 2019-20 fiscal year at the Plano ISD board meeting Sept. 3.
The Plano ISD board of trustees adopted a tax rate for the 2019-20 fiscal year at its regular meeting Sept. 3.
The rate for FY 2019-20 will be set at $1.33735 per $100 valuation. The maintenance and operations (M&O) rate will be lowered by 8.69%, reducing taxes on a $300,000 home by roughly $228, lowering the M&O rate $0.10 from the previous year.
This will be the lowest tax rate since 2010, according to Chief Financial Officer Randy McDowell. PISD also has the second-to-lowest tax rate in comparison to 10 other area school districts, McDowell said.
"Last year the $1.439 was costing average residents $5,140 in school taxes," McDowell said. “That number is down even though the values have gone up on the homes."
The 2016 bond’s tax rate is also lower than in previous years, reaching what McDowell calls historic lows.
“Bond rates are very low as you know, so that is working to our advantage,” McDowell said.
House Bill 3 had a role in lowering the tax rate for this year, as it required many districts to compress their maintenance and operation rates to $0.97. The district's property tax is based on the M&O and interest and sinking (I&S) tax rate. These two make up the proposed tax rate.
Another rate is the effective rate, which is the rate needed to produce the same amount of taxes as the previous year from properties tax roll both years. There was little guidance on how to calculate this tax rate due to HB 3’s implementation, McDowell said.
“So some of the tax rates, as we know, it gets real confusing on tax rate and language,” McDowell said.”It got more confusing this year with the implementation of House Bill 3. We were required to still calculate the effective tax rate.”
PISD adopted its amended budget for the 2019-20 school year Aug. 7. The recapture tax will likely be lower due to the tax rate compression, McDowell said. Recapture, also referred to as Robin Hood, is a finance tool in which the state redistributes tax revenue from property-wealthy school districts to districts with lower property values.
The district would have sent an estimated $255 million in recapture payments before the passage of HB3, and it would have faced a $33 million budget deficit. The district currently faces a $16.2 million budget shortfall going into the 2019-20 school year.
Want more from CI? Becoming a CI Patron grants you access to an exclusive weekend newsletter and CI Swag. Your one-time or monthly donation catapults our mission to hire high-quality journalists and provide trusted news in Texas communities.