Board Agenda Includes Adoption of Decreased Tax Rate
September 22, 2021
The annual tax rate, which will be presented at the Sept. 27, 2021 Board of Trustees meeting, represents a 2.29-cent decrease from the 2020-21 rate. This compression of the Maintenance and Operations tax rate has resulted from House Bill 3 adopted in 2019 that modified the statewide school funding formula/system. The proposed rate is $1.3103 ($0.9603 Maintenance and Operations/$0.35 Interest and Sinking) per $100 of certified property value. The Maintenance and Operations (M&O) portion covers district operating costs such as salaries and benefits, utility bills, student transportation, and supplies. The Interest and Sinking (I&S) rate generates revenue that is used to pay off bond indebtedness for facilities.
Property tax bills are a product of the tax rate and the property value. If the rate decreases but the property value increases, the actual bill could be higher.
This will mark the third consecutive year that DSISD is decreasing its tax rate. Between 2018-19 and 2019-20, the DSISD tax rate decreased more than 10 cents ($1.52 to $1.4183). Then, between 2019-20 and 2020-21, it dropped another 8.5 cents ($1.4183 to $1.3332). Combined with this year’s additional two-cent decrease, over a three-year period, DSISD’s property tax rate will have decreased by 20.97 cents, or 13.8 percent.
Because of the way that public schools are funded, school districts that are classified as having revenue in excess of entitlement under Chapter 48 of the Texas Education Code do not see increased revenue when higher property values result in increased tax collections. State funding formulas are recalculated so that the district must send more money back to the state. For 2020-21, the district will send $5,630,603 back to the state in recapture. For 2021-22, the recapture payment is estimated to be nearly $7 million, which will represent an increase of approximately 24 percent.
Dripping Springs ISD is a fast-growth district, having doubled in size in the last 10 years. Current enrollment is 8,004, which represents an increase of 9.9 percent from the district’s official annual reporting date in October 2020.