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Plano ISD proposes lowering property taxes for the fourth year in a row

City of Plano
Plano ISD is proposing a lower tax rate for the upcoming fiscal year.

Plano ISD is proposing a lower property tax rate for its district despite the impact of inflation on its budget.

The school district has proposed lowering property tax rates for the upcoming fiscal year by 4.14 cents based on an estimate from the district’s chief appraiser, making the total tax rate about $1.28 per $100 for properties in the area.

The Plano ISD board of trustees will have a public hearing to discuss the proposed property tax rate at its meeting at 6 p.m. on Tuesday.

The current tax rate is about $1.32. This would be the fourth year in a row that PISD has lowered its tax rates even though there has been a budget deficit the past couple of years.

Still, raising property tax rates for the district wouldn’t put more money in the district’s pocket. Christy Rome, the executive director of the Texas School Coalition, said that’s a common misconception.

“They think that when they pay more in property taxes that their school receives more funding, and that’s just simply not the case,” Rome said.

Public schools in Texas are funded by local property taxes and money from the state, as well as some federal dollars. The state calculates how much state funding a district receives based on how many students the district has and how much it collects in local property taxes. If a district collects more money in property taxes than the state has decided it’s entitled to, the state collects that excess money and redistributes it to school districts in Texas with less property wealth.

Known as recapture, the state redistributes property tax wealth to help equalize education funding in Texas because of a 1993 lawsuit. Since then, Plano ISD has paid more than $2.4 billion to the state in the form of recapture.

Of the 160 school districts in the state’s 1,022 districts that pay recapture, Plano ISD paid the third highest amount this past year, behind Houston and Austin ISDs. Johnny Hill, the Plano ISD deputy superintendent for business and employee services, said 36% of every tax dollar the district collects goes to the state.

Property values in Plano are going up. Student enrollment is down, which means the district get less money from the state that’s based on daily enrollment. That all contributes to the district’s increasing recapture payments.

But the cost of running Plano schools is also going up because of inflation. Hill said the state hasn’t adjusted the amount of funds school districts get from the state for inflation.

“As costs increase, we’re still getting the same amount of money that we received four years ago,” he said.

The district will receive certified estimates on property values from the chief appraiser on July 25. If the district determines the tax rate needs to increase based on those estimates, that would have to be approved by voters. Otherwise, the new tax rate will be adopted on Aug. 16.

The Texas Legislature passed recapture reform in 2019 through House Bill 3, which invested more state funding in public education and required districts to lower property tax rates. Those changes decreased the amount of money recaptured that year from $3.6 billion to $2 billion, according to the Texas Education Agency.

Still, Rome said the funding formula set by House Bill 3 hasn’t caught up with inflation and that recapture is rising more than the state anticipated. Tarrah Lantz, the outgoing president of the Plano ISD council of PTAs, said recapture is still a problem.

“We really thought we had seen the highest payment going out from Plano ISD to the state, but it keeps getting larger,” Lantz said. “Whatever they tried to solve isn’t working.”

The state collected more in recapture payments in 2021 than it anticipated. Rather than increasing school funding, Rome said that cash ended up in the state’s savings. In 2021, recapture was the state’s third highest revenue source, according to the Texas School Coalition.

Hill said an unexpected rise in property values benefits the state’s budget.

“It means that they can decrease what they have to contribute,” he said.

Hill said Plano ISD is meticulous with its budget to insulate teachers and students from being affected by recapture and inflation. Every dollar spent must be justified, he said, and that helps protect school programs and salaries – which the district recently raised.

Still, Lantz said the district can’t run on a budget deficit much longer.

“At some point soon, we’ll get to the point where tougher decisions need to be made,” Lantz said.

Got a tip? Caroline Love is a Report For America corps member for KERA News. Email Caroline at You can follow Caroline on Twitter @carolinelove37.

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Caroline Love covers Collin County for KERA and is a member of the Report for America corps. Previously, Caroline covered daily news at Houston Public Media. She has a master's degree from Northwestern University with an emphasis on investigative social justice journalism. During grad school, she reported three feature stories for KERA. She also has a bachelor's degree in journalism from Texas Christian University and interned with KERA's Think in 2019.