EDUCATION Pflugerville ISD facing financial woes due to property values
A GROWING TAX BASE Rising values of new and existing properties mean Pflugerville ISD collects more taxes each year. From 2011 to 2021, the district saw an approximately 131% increase in tax revenue collected.
$261.8M*
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Recapture When a school district reaches a certain threshold of property value per student, it enters what is called recapture, according to PfISD Chief Financial Officer Jennifer Land. When in recapture, rather than receiving money from the state, a dis- trict must send its excess tax revenue to the state. Money sent to the state via recap- ture is purportedly used to assist less property-wealthy school districts, earning the program the nickname “Robin Hood,” according to the Texas Education Agency. Land said PfISD is what is called a “gap district,” a district that is considered property wealthy but does not quite meet the requirements for recapture. She said she expects PfISD to enter recapture within the next two to five years. Land said it is difficult to predict the precise impact entering recapture would have, but the state would likely take between 2%-10% of the district’s tax revenue. “If we look 20-30 years out, I think … over half of the school districts in Texas would be in recapture if nothing changes,” Land said. Killian identified two potential sources of relief for the district. The first is through a voter approval tax ratification election, or VATRE. A VATRE would allow the district to convert some of its tax revenue to maintenance and operations tax, which is not subject to recapture. According to Killian, however, a more lasting solution will have to take place at the state level. Killian said he would like to see an increase in the amount of funding per student a district is allowed to raise before going into recapture as well as a change to determine the allotment based on enrollment instead of attendance. Attendance has diminished over the last two years because of COVID-19, and Killian said the district is taking a financial hit for encouraging sick students to stay home. “The system is very antiquated,” Killian said. “Especially in light of a pandemic, it doesn’t work.”
BY CARSON GANONG
$200M
With local property values on the rise and more development coming by the day, Pflugerville ISD’s tax base is larger than ever—but officials said the district may not be better off finan- cially because of it. According to the Travis County Appraisal District, the median taxable value of a home in Pflugerville ISD went up from $257,557 in 2021 to $287,944 in 2022, an 11.8% increase. However, PfISD Superintendent Doug Killian said the rising property values have created more problems for the district than they have solved. “[High property values have] exactly the opposite effect of what you’d think for our school finance,” Killian said. “The more property wealthy we are, the less state aid we receive—we just collect more of it local.” This is because of the way school finances work in Texas: Each district is allocated a set amount of funding based primarily on its attendance, and the state provides funding to make up the difference after property tax revenue. Since PfISD’s enrollment is not increasing at the same rate as its prop- erty values, Killian said the district does not have much more money to work with than it did before—it just has to cover more expenditures using its own property taxes. “If we don’t see a large number of students as well, …we won’t get any wealthier,” Killian said. “We won’t have any extra money to do pay raises or anything.” Several other factors present financial challenges for the district as well, including ongoing staffing shortages, the failure of its tax ratifi- cation election last November and the general financial stresses that come with inflation. All those factors together account for the nearly $10 million shortfall projected in the district’s budget for the upcoming fiscal year, he said. However, Killian said if the trend of property value growth outpacing enrollment growth continues, the district is headed toward another challenge: recapture.
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$104.19M
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2014 2015 2012 2013 2016 2017 2011
2018 2019 2020 2021 2022* *Budgeted
SOURCE: PFLUGERVILLE ISD/COMMUNITY IMPACT NEWSPAPER
Terms to know
Many factors play a role in school finance. Officials at Pflugerville ISD say the district is facing a financial situation that could put it into recapture. Here are a few key terms to know: • Basic allotment: The amount of money per student a district is allowed to raise. For districts that do not raise their full allotment via property taxes, the state makes up the difference. The allotment for districts is $6,160 for each student in average daily attendance.
• Average daily attendance: A district’s attendance is used to determine its funding cap. It is equal to the sum of attendance counts divided by days of instruction. • Recapture: Chapter 49 of the Texas Education Code, also known as “Robin Hood,” states when a district raises more property taxes than its allotment, the state takes the excess revenue to fund other districts. • Tax ratification election: An election a school district must hold to raise its tax rate above the voter-approval rate.
SOURCE: TEXAS EDUCATION AGENCY/COMMUNITY IMPACT NEWSPAPER
RISING PROPERTY VALUES Both the median market value, or the estimated price a home can sell for, and the median taxable value, or the value at which property owners pay taxes, in Travis County has steadily increased over the last several years. Median market value of a home in Travis County Median taxable value
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2018
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2020
2021
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0
$100K $200K
$300K
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$500K $600K $700K
SOURCE: TRAVIS COUNTY APPRAISAL DISTRICT/COMMUNITY IMPACT NEWSPAPER
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PFLUGERVILLE - HUTTO EDITION • MAY 2022
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