Dripping Springs ISD homeowners may see a slight increase in tax bills despite the district adopting a lower tax rate due to increased home values in the area.
The big picture
The board of trustees adopted an ad valorem tax rate of $1.0985 per $100 of valuation at a Sept. 28 meeting. The total rate includes a maintenance and operations rate of $0.7485 per $100 of valuation and an interest and sinking rate of $0.35.
M&O revenue funds daily operations, including salaries, classroom supplies and transportation. I&S revenue is used to repay bond debt and cannot fund daily operations of the district.
The adopted rate is $0.0067 lower than the previous fiscal year's rate and about $0.0044 higher than the no-new-revenue tax rate, which would raise the same amount in property tax revenue as the previous year.
A closer look
The M&O rate is composed of two parts: Tier 1 and Tier 2. The Tier 1 rate, or the maximum compressed rate, is set by the Texas Education Agency after receiving certified property values.
The maximum compressed rate is the lowest rate a district can adopt and is based on changes in property values in the district. Property value growth can result in tax rate compression, Chief Financial Officer Randy Rau said. If a school district sets the rate below the maximum compressed rate, state law reduces the district's basic allotment.
The local impact
The average taxable value of a residence in Dripping Springs ISD increased from $557,223 in FY 2025-26 to $562,547 in FY 2026-27. This equates to an estimated $21 increase in tax bills for the average owner.
What they're saying
"We're able to fully fund this district, we're able to support the programs that we have, we're able to pass an albeit modest compensation increase for our teachers ... and still bring the tax rate down a little bit," board member Rob McClelland said.
