Taxparency and Plano ISD
What is Taxparency?
Taxparency is a grassroots effort by Texas public school districts to provide the public with transparency into how their tax dollars are being spent on public school education, and raise awareness to the public school funding crisis.
Who funds public schools in Texas?
Funding public schools is a shared responsibility between local property tax payers and the state, with some funding (less than 10%) from federal sources.
While local funds come from primarily one source, school district property taxes, state funds include a combination of sources comprising general revenue, lottery proceeds and recapture or “Robin Hood” payments.
This video from Raise Your Hand Texas provides a great overview of how Texas schools are funded.
What share of school funding does the state pay?
The burden for school funding has shifted from the state to the local taxpayer. The state’s share for funding education is 12% less in 2019 than in 2008, and the state has benefited from local property tax increases, driven by year-over-year rising property values, during that same time.
- School funding in 2008:
- 50% State contribution
- 50% Local contribution
- School funding in 2019:
- 38% State contribution
- 62% Local contribution
- School funding in 2008:
How much has Plano ISD paid to the state since Robin Hood began?
Plano ISD’s total Robin Hood recapture payments will exceed $1.9 billion in 2018-19. In the last four years, the annual payment has increased by 248%.
Doesn't Plano ISD benefit from increased property values?
Many taxpayers are unaware that the additional money they are paying to the local school district as a result of property value increases will benefit the state budget, not Plano ISD. This, in turn, allows the state to decrease its share of funding public education. In fact, the state's funding per student is less today than it was a decade ago, despite an increase in students’ needs.
How much of Plano ISD's property taxes go to the state?
34% (or $208 million in aggregate) of your property taxes designated for Plano ISD operations goes to the state. That equates to $3,918 per Plano ISD student or:
- $11.0M per senior high school
- $4.6M per high school
- $3.7M per middle school
- $2M per elementary school
Even with no increase to the Plano ISD tax rate, property values continue to rise and the state continues to take more. In 2019, Plano ISD will collect $46 million more in property taxes than the previous year. However, that entire increase and then some (117%) will be sent to the state.
Can't Plano ISD afford to pay more?
The increased recapture (or Robin Hood) payments are not without impact. This year, Plano ISD adopted a deficit budget, having to resort to using savings to fund the budget shortfall due to Robin Hood.
Does Plano ISD's Robin Hood tax help other school districts?
The state's current system of funding education does not require that all of this money be used to help other school districts. Rather, it simply allows the state to reduce its own contribution to the education budget.
What will happen if school finance isn't sufficiently addressed and the current Robin Hood trend continues?
With no change in school funding, Plano ISD's Robin Hood payments will continue to increase, along with the amount of savings (i.e., fund balance) the district will have to spend each year. While this year's transfer from savings will be $6,700,000, the amounts projected for subsequent years would be:
- 2019-20: $23,950,000
- 2020-21: $24,950,000
- 2021-22: $41,700,000
This totals $97,300,000 over four years, fully depleting the district’s savings, a pace Plano ISD could not sustain without cutting programs and salaries.
What about the school district tax rate?
The total Plano ISD tax rate = $1.439, and comprises:
- M&O tax rate: $1.17
The maintenance and operations (or M&O) tax rate funds operations such as teacher salaries, fuel for buses to transport students to school, utilities to run buildings, school supplies, etc.
- I&S tax rate: 26.9¢
The interest and sinking (or I&S) tax rate provides funds for payments on the debt that finances the district's facilities, buses and technology.
- Recapture (Robin Hood): -39.4¢ (subtracted from M&O taxes)
Recapture is the amount local taxpayers send back to the state. It was originally intended to equalize property wealth across districts in Texas. More and more, it permits the state to reduce its share of funding for public education.
- Plano ISD retains only 77.6¢ of M&O taxes collected ($1.17 – 39.4¢) to fund its operations after paying Robin Hood tax back to the state.
- The Robin Hood tax is more than the amount to fund bond payments (I&S) in Plano ISD.
- The 77.6¢ net M&O tax rate does not cover the growth in the district’s operating costs due to inflation, such as providing raises to teachers or covering increasing fuel costs.
- Robin Hood is why school districts are different from citties or counties, who may adopt an effective tax rate, which means they can lower tax rates when property values increase. School districts' hands are tied by Robin Hood.
The tax rate is applied to every $100 of assessed property value in the school district, or:
assessed property value / $100 * tax rate = estimated taxes
- M&O tax rate: $1.17