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2023 LOCAL VOTER GUIDE
An attendance credit election is required by the Texas Education Agency when a school district is receiving property tax revenue in excess of its funding needs. The TEA then takes the excess money and distributes it to other school districts in need of funding. Understanding recapture
Terms to know
What happens after the vote? The Texas Constitution requires matters of taxation to be put before the voters. However, a vote against it could mean the TEA would “detach” property from the district, decreasing the tax base and causing the interest and sinking portion of the property tax rate to increase.
Property Tax Revenue The amount of funding accumulated from the collection of property taxes in the school district Recapture Refers to the payments a school district must turn over to the state when property tax revenue exceeds the threshold of student funding beyond the district’s overall attendance rate Detachment The process by which property is removed from a school district by the TEA, thus lowering the overall tax base of a district Interest and sinking rate The portion of the tax rate that pays down debt from bonds and capital projects School districts are responsible for setting and maintaining their budgets and tax rates. The following are key terms to understand.
Funding for students
$6,160* per student
Student body
Total funding for the district
X
=
If the vote passes
Funding structure
SMCISD would “sell” its excess revenue to the TEA to distribute to other districts.
Combined revenue This basic allotment per student must be met by both district and TEA funding.
Excess local revenue When a district has more property tax revenue than it needs for funding, the TEA recaptures it.
If the vote fails
The debt services tax rate would potentially go up due to the tax base decreasing. If property is removed from the tax base, the I&S rate would need to pay o bonds and other debt in a timely manner.
Property tax revenue The TEA takes excess revenue from the district and redistributes it to poorer districts
TOTAL FUNDING NEEDED
TEA contribution
Property tax revenue
*THIS AMOUNT INCREASES OR DECREASES DEPENDING ON ATTENDANCE FIGURES, SPECIAL EDUCATION NEEDS AND MANY OTHER FACTORS.
Detaching property
SOURCE: TEXAS SCHOOL COALITION COMMUNITY IMPACT
SOURCES: SAN MARCOS CISD, TEXAS EDUCATION AGENCY COMMUNITY IMPACT
These are the highest-valued commercial properties that could be detached.
Rome, executive director of the Texas School Coalition. “85% of their stu- dents are economically disadvantaged, because the parents who are sending their children to school there are not the people who own the resort hotels. They’re the people who clean the resort hotels.” Proposition A on the May 6 bal- lot will ask SMCISD voters whether to purchase attendance credits with local tax revenues from Texas, adding the district as one more of the roughly 160 school districts in the state that already have entered recapture. Excess tax dollars According to the U.S. Census Bureau’s 2020 ve-year estimate of earnings in SMCISD, the median household income is $44,500, and more than half of its student body is considered economically disadvan- taged. But property values—especially from large commercial developments in recent years, such as the Amazon Commercial Services warehouse—and rising values on single-family homes put the district on notice that entitle- ment payments from the TEA would be reduced, according to Michael Doyle, the executive director of business and nance for SMCISD. “We fell into the ‘recapture’ cate- gory in 2017, but the way we were able to cover our payment that was due back was a reduction. It was called
revenues, it is not as simple as a vote for or against payment, Rome said. “Essentially, a community is asked to take this election for constitutional reasons because it is their tax,” Rome said, adding that the TEA could remove property from the district’s boundaries should the election fail and move that revenue elsewhere. “They’re going to get the money one way or another.” Rome cited Houston ISD: When it began the recapture process, voters initially voted the measure down. The TEA began spelling out what proper- ties it would detach from the district and allowed the district once to hold another vote—which passed. “If Prop A does not pass, then SMCISD would need to increase the interest and sinking tax rate in order to pay for current debt obligations. The interest and sinking rates are what we use for projects that are too expensive to fund out of the regular budget,” SMCISD Superintendent Michael Car- dona said. That increase in the tax rate would be due to the loss of property from the tax base, requiring the district to recal- culate the tax rate for debt payments. Doyle said the actual amount is uncertain because the district does not know exactly what property TEA would detach nor at what value, though it is estimated a total of $700 million in commercial property would be detached from the school district.
netting. We were able to net by seeing a reduction from the state,” Doyle said. “The state would say, ‘We don’t need to pay you as much because your glass is full. And if we were to give you any more money, you would then exceed your glass and have to pay back.’” Chapter 49 of the Texas Education Code de nes this as “local revenue in excess of entitlement.” As the district’s property values—and therefore local tax revenues—increased over the past few years, payments to the district from the TEA were reduced, Doyle said. Now, the district has sur- passed the state’s funding formula per student—which is roughly $6,160 per student, though that amount increases and decreases depending on atten- dance, special education needs and many other factors. The TEA expects the district to hand over its excess rev- enue to reallocate it to other districts. “There are a number of urban dis- tricts in Texas that we nd in that phenomenon where they have a large degree of economically disadvantaged students yet a high enough degree of property wealth that they have to share their wealth with other schools who have less economically disadvan-
Amazon Commercial Services Highlander San Marcos One H-E-B Grocery Co. Tanger San Marcos
$193.64M
$164.26M
$153.2M $96.8M $80.5M $67.51M
San Marcos Factory Stores
Carma Paso Robles Carson Diversi ed Properties 3 Relp Ind. San Marcos
$65.3M
$61M
Prime Outlets at San Marcos II
$49.3M
Total
$931.51M*
Voting in favor of Proposition A is the best way voters can protect them- selves, Cardona said. “One hundred percent of Texas school districts who have faced this situation have voted in favor of pass- ing their propositions in order to make their required recapture payment and not negatively a ect the taxpayers and existing bond debt obligations,” Cardona said. *FIGURES ARE 2022 PROPERTY VALUE, NOT TAX REVENUE. SOURCES: SAN MARCOS CISD, TEXAS SCHOOL COALITION, HAYS CENTRAL APPRAISAL DISTRICT COMMUNITY IMPACT
taged students,” Rome said. Recapture any way you vote
While Proposition A asks voters to decide whether to purchase attendance credits from the state with local tax
For more information, visit communityimpact.com .
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SAN MARCOS BUDA KYLE EDITION • APRIL 2023
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