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School districts across Texas are starting their new school year. Many districts are also looking to raise property taxes to pay for budgeted spending increases — but they’ll need voter approval.

Several school boards in the Dallas-Fort Worth Metroplex are asking for increases in their districts’ maintenance and operations (M&O) tax rates. Any proposed M&O tax rate above $1.04 per $100 of assessed property value triggers a tax ratification election (TRE).

The maximum M&O rate allowed by state law is $1.17 for most districts, and that’s the rate districts are asking voters to approve. Any rate increases will be on top of skyrocketing property values.

District officials are relying on local taxpayers to generate as much revenue as possible to fund their schools’ operating budgets. Salaries for teachers and staff consume the largest percentage of districts’ M&O budgets, which also include day-to-day expenses such as utilities, transportation, and supplies.

Debt service on outstanding bonds is paid for with separate funds generated by the interest and sinking (I&S) component of school taxes. The maximum allowed I&S rate is $0.50, yielding a total school property tax rate limit of $1.67.

Several districts have proposed tax rate “swaps” in which the M&O rate is increased by the maximum amount of 13 cents, while the I&S rate is decreased by the same amount (a “penny swap”) or more (a “swap and drop”), so the overall tax rate stays the same or drops by one or two cents.

Officials in six of nine districts holding TREs chose low-turnout special election dates in August and September, rather than the uniform November election date when voter turnout is higher and the cost to district taxpayers is lower.

Early voting is underway through September 4 in five districts holding September 8 elections: Azle, Cedar Hill, Duncanville, Ennis, and Keller.

Below are Metroplex-area school districts holding elections on M&O tax rate increases for 2018 (property taxes are paid in arrears) to finance increased spending in 2018-19 and beyond. Rates are per $100 of assessed taxable property value.

 

Azle ISD

Current Rate: $1.33

Proposed Rate: $1.33

M&O Rate Increase: 13 cents (from $1.04 to $1.17)

Additional Annual Revenue: $2.5 million

TRE Date: September 8

District TRE Info: https://spark.adobe.com/page/nG7Lgqw8H3rqR/

Taxpayer TRE Info: https://www.facebook.com/voteNOonAzleISDTax/

Notes: Azle ISD’s proposed “penny swap” would move 13 cents from the I&S rate to the M&O rate, keeping the total tax rate the same. But with higher property values, the same rate results in a tax increase and higher tax bills. The swap is also a backdoor tax increase that raises the district’s total tax limit to $1.67. Trustees say they’d collect more money for operating expenses and still be able to pay off debt. AISD just raised its I&S rate 13 cents after voters approved nearly $100 million in bond debt principal and interest in 2016.

 

Cedar Hill ISD

Current Rate: $1.51

Proposed Rate: $1.50

M&O Rate Increase: 13 cents (from $1.04 to $1.17)

Additional Annual Revenue: $5 million

TRE Date: September 8

District TRE Info: https://www.chisd.net/Page/11526

Taxpayer TRE Info: https://www.cedarhilltxtaxes.org/

Notes: Cedar Hill ISD is billing its TRE as a “Swap-ortunity” or “swap and drop” in which the 13-cent M&O increase is offset by a 14-cent I&S decrease, dropping the total tax rate for 2018 by a penny. If voters elect to maximize the operating rate this year via a swap, the district will have the opportunity to increase taxpayers’ total property tax rate to $1.67.

 

Dallas ISD

Current Rate: $1.28

Proposed Rate: $1.41

M&O Rate Increase: 13 cents (from $1.04 to $1.17)

Additional Annual Revenue: $126 million

TRE Date: November 6 (general election)

District TRE Info: https://www.dallasisd.org/tre

Taxpayer TRE Info: n/a

Notes: After trying and failing twice before, Dallas ISD trustees approved a 13-cent M&O rate increase in August, triggering a November TRE. In June, the board approved a budget for 2018-19 that includes $1.5 billion in operating spending; $32 million earmarked for pay increases is dependent on voters’ approval of the rate hike. With or without the rate change, DISD is now subject to recapture under the state’s Chapter 41 Wealth Equalization program, also known as “Robin Hood.”

 

Duncanville ISD

Current Rate: $1.52

Proposed Rate: $1.52

M&O Rate Increase: 13 cents (from $1.04 to $1.17)

Additional Annual Revenue: $5 million

TRE Date: September 8

District TRE Info: https://www.duncanvilleisd.org/pennyswap

Taxpayer TRE Info: n/a

Notes: Duncanville ISD’s “penny swap” would increase the M&O rate by 13 cents and lower the I&S rate by 13 cents, leaving the overall tax rate at $1.52. District officials say they would use the additional operating revenue to pay for increased security, technology upgrades, and new buses.

 

Ennis ISD

Current Rate: $1.54

Proposed Rate: $1.54

M&O Rate Increase: 13 cents (from $1.04 to $1.17)

Additional Annual Revenue: $800,000

TRE Date: September 8

District TRE Info: https://www.ennis.k12.tx.us/tre

Taxpayer TRE Info: https://www.facebook.com/groups/235852310379256/

Notes: Another “penny swap” that reallocates tax revenue from I&S to M&O so the district can spend it on operations instead of debt service. Ennis ISD says “the main reason for the TRE is to maximize the District’s funding from the state. Otherwise, we will be leaving money on the table.”

 

Frisco ISD

Current Rate: $1.46

Proposed Rate: $1.44

M&O Rate Increase: 13 cents (from $1.04 to $1.17)

Additional Annual Revenue: $51 million

TRE Date: November 6 (general election)

District TRE Info: https://www.friscoisd.org/departments/finance/2018-bond-tre/home

Taxpayer TRE Info: n/a

Notes: Frisco ISD’s “swap and drop” would add 13 cents to M&O and subtract 15 cents from I&S, dropping the total tax rate by 2 cents. The district’s last TRE, in August 2016, failed by a 58-42 margin after citizens organized against the 13-cent increase. A $691 million bond package will also be on the November ballot. After taxpayers voiced concerns about the TRE and bond, trustees agreed to shave $4 million in baseball field turf from their original $695 million bond proposal but still plan to spend $43 million on a fine arts center.

 

Keller ISD

Current Rate: $1.52

Proposed Rate: $1.51

M&O Rate Increase: 13 cents (from $1.04 to $1.17)

Additional Annual Revenue: $19 million

TRE Date: September 8

District TRE Info: https://www.kellerisd.net/swapdrop

Taxpayer TRE Info: https://www.facebook.com/KellerISDStandingStrong/

Notes: Another “swap and drop” plan in which Keller ISD’s 13-cent M&O rate increase would be offset by an I&S rate decrease of 14 cents, lowering the total tax rate by a penny for 2018. The district, which has run budget deficits for several years, plans to spend about half the added tax revenue on pay raises. Approving the swap would increase the district’s maximum total tax rate to $1.67 and subject the district to Chapter 41 recapture.

 

Lancaster ISD

Current Rate: $1.54

Approved 2018 Rate: $1.53

M&O Rate Increase: 13 cents (from $1.04 to $1.17)

Additional Annual Revenue: $2 million

TRE Date: August 25 (PASSED)

District TRE Info: https://www.lancasterisd.org/apps/pages/index.jsp?uREC_ID=1209721&type=d&pREC_ID=1446189

Taxpayer TRE Info: https://www.facebook.com/groups/514808282299858/

Notes: Using a slew of controversial tactics, Lancaster ISD passed its “swap and drop,” lowering the total tax rate for 2018 by a penny while increasing the rate for operational spending by 13 cents. District officials set a non-uniform election date to “hide the vote” and used early voting “rolling polling” sites at school campuses. District employees at early voting parties were caught on camera openly advocating for the TRE inside the polling places.

 

Richardson ISD

Current Rate: $1.39

Proposed Rate: $1.52

M&O Rate Increase: 13 cents (from $1.04 to $1.17)

Additional Annual Revenue: $25 million

TRE Date: November 6 (revised from September 4)

District TRE Info: https://www.risd.org/tre2018/

Taxpayer TRE Info: https://www.facebook.com/voteno4RISD/

Notes: Richardson ISD’s proposed 9-percent rate increase would raise the average homeowner’s property tax bill by $296 a year, to $3,467. If voters approve the rate hike, an additional $5.8 million collected from local taxpayers will be lost to Chapter 41 recapture. If the TRE fails, the district says it will not be able to fund salary increases and may implement a hiring freeze.

 

At least 35 districts in the region are currently at the maximum allowable M&O tax rate of $1.17, according to county tax records: Aledo, Anna, Aubrey, Blue Ridge, Burleson, Carrollton-Farmers Branch, Castleberry, Community, Coppell, Crowley, DeSoto, Eagle Mountain-Saginaw, Everman, Farmersville, Ferris, Grand Prairie, Gunter, Irving, Kennedale, Krum, Lake Dallas, Lake Worth, Leonard, Little Elm, Lovejoy, McKinney, Melissa, Pilot Point, Plano, Princeton, Prosper, Royce City, Sanger, Trenton, and Wylie.

Even with flat tax rates, rising property values result in increased tax revenue for school districts and higher property tax bills for taxpayers.

Texas Scorecard will continue reporting on individual districts’ TREs and budgets in the coming weeks and invites comments from local taxpayers.

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