Fort Worth ISD school board member Quinton Phillips was all in for a trustee-led idea to cut the district’s property tax rate.
Still, he had reservations about lowering the rate even further than the district first proposed.
“I don’t want to be naive and pay the piper later on,” he said.
Phillips was one of eight trustees on Aug. 22 who approved Fort Worth ISD’s lowest property tax rate in 16 years. The lower rate is not expected to affect day-to-day operations, but it could affect how the district manages its debt — including the possibility of a tax rate hike in the future.
The tax rate for the 2023-24 school year is $1.0624 per $100 of valuation. Most of the property tax cuts homeowners will see are because of the Texas Legislature.
Initially, the school board considered setting the rate at $1.0824. However, trustee Kevin Lynch pushed to lower one of the two smaller rates that form the overall property tax:
- The maintenance-and-operations tax rate funds day-to-day operations.
- The debt service rate pays off debt.
Lynch wanted to cut 2 cents off of the proposed debt service rate of 29.2 cents, the same rate the district has levied since 2018. Removing the two pennies cuts around $10.8 million of property tax revenue, according to administrators.
“Our property values in Tarrant County, especially in Fort Worth ISD, have gone up more than expected. Potentially, there is an opportunity to lower this (debt service) rate and do right by a lot of the families who live here and send their kids to school here as well as the taxpayers,” Lynch said.
A taxpayer with the average home would save $18.14 under the new rate compared to the proposed rate. That homeowner would see their bill cut in half from what they paid in 2022.
How does this affect my school taxes?
The average home in Fort Worth ISD has an appraised value of $287,703, according to the Tarrant Appraisal District. However, only $190,673 of the value is used for taxes.
The new homestead exemption allows property owners to take $100,000 off their home’s appraised value. The school district would then tax only $90,673 of a home’s value.
The average property tax bill to Fort Worth ISD would be $963.31 — 50% lower than what the average homeowner paid in 2022.
The proposed rate was $1.0824. Under that, the average property tax bill to Fort Worth ISD would have been $981.45.
Last year, the average home in Fort Worth ISD had an appraised value of $236,832 and only $190,438 was used for taxes. After a $40,000 homestead exemption, the school district taxed $150,438.
In 2022, that homeowner paid $1,928.01 in property taxes to Fort Worth ISD.
School board President Camille Rodriguez was the only dissenting vote. Rodriguez, a doctor of podiatric medicine, compared the proposed rate to her giving a patient a recommendation she believed to be in their best interest. Rodriguez said Chief Financial Officer Carmen Arrieta-Candelaria recommended a debt service rate of 29.2 cents in the best interest of the district.
Arrieta-Candelaria assured the school board she would be able to work with a lower debt service rate. However, she will now have to adjust the timeline for issuing debt to pay for projects in the voter-approved $1.2 billion bond program from 2021, she said.
The bond was proposed with an eye toward maintaining the debt service rate at 29.2 cents, she said.
Arrieta-Candelaria issued a warning to trustees: The district may have to pay more in interest on the bond.
“In the future, we may have to increase the rate,” the CFO said.
The new tax comes in under Fort Worth ISD’s no-new-revenue rate of $1.066205. Typically, school boards would have to adopt the no-new-revenue rate to bring in the same amount of property tax revenue as the previous year.
Regardless of the rate, most taxpayers should see smaller property tax bills because of new laws that cut school district tax rates and give homeowners a $100,000 homestead exemption. Voters still have to approve the new homestead exemption on school taxes in the Nov. 7 constitutional amendment election.
The bottom line for school districts is fewer property tax dollars. State funding will increase to balance out the mandated cuts to the maintenance-and-operations rate. School districts receive state funding based on the number of students attending classes. Districts count students for state numbers in October.
Legislators used nearly $12.6 billion to reduce rates and offset the loss of property tax revenue. They did not provide new funding to schools.
“It’s very complicated,” Arrieta-Candelaria said.
Jacob Sanchez is an enterprise journalist for the Fort Worth Report. Contact him at jacob.sanchez@fortworthreport.org or via Twitter. At the Fort Worth Report, news decisions are made independently of our board members and financial supporters. Read more about our editorial independence policy here.
