Frisco ISD trustees adopted a 2017-18 tax rate Monday that is below what is needed to maintain the same level of revenue per student as the 2016-17 school year.
The combined tax rate will remain at the current rate, $1.46 per $100 valuation. The rate has not changed since 2012, though FISD lost a total of $105 million in state funding from 2011 to 2016. View tax rate history.
A combined tax rate of $1.50 would be needed to maintain the same level of maintenance and operations (M&O) revenue and debt service as last year. By law, FISD cannot raise the portion of the tax rate that pays for day-to-day school operations without the approval of voters.
Even with the same tax rate, Frisco ISD residents will pay more in taxes due to rising property values. The taxable value of the average home in FISD is expected to rise from $347,932 to $381,046, resulting in an average tax increase of $483. Total taxable values in the District are estimated to climb from $30.3 billion to as high as $35.2 billion, before factoring in property value protests this summer. View full tax rate notice.
Rising property values have allowed Frisco ISD to keep the tax rate that pays off debt eight cents below the state maximum over the last several years, while adding thousands of new students and opening new 17 new schools since 2012. FISD currently has a debt obligation of $1.9 billion in outstanding principal from selling bonds to build new schools to keep up with enrollment growth and fund other projects. Learn more about FISD bond programs.
Though rising property values do benefit the interest and sinking (I&S) fund, Frisco ISD does not retain additional funds from rising property values to support the operating budget, more than 80 percent of which goes toward staff salaries. Local residents will just pay a larger portion of the funds necessary to satisfy the budget next year, while the state reduces its share proportionally.
“The 85th Legislature did not make meaningful reforms to the school finance system, and despite funding enrollment growth across Texas, the two-year budget actually reduces state funding for schools by more than a billion dollars,” said Chief Financial Officer Kimberly Pickens. “Lawmakers continue to rely on property value growth in districts like FISD to fund education and balance the state budget, with local taxpayers picking up more and more of the tab.”
The approved budget does include an update to the state’s equalized funding formula based on the amount of property wealth per student in Austin ISD. This adjustment, which reflects more current property values in Austin ISD, will eliminate a projected deficit for Frisco ISD in 2017-18, but is not meaningful enough to address the District’s long-term funding challenges.
FISD’s proposed budget for next school year includes dozens of recommendations to trim spending and generate additional revenue, based on months of work by employees, trustees, parents and citizens who shared their ideas and input on possible funding solutions.
The School Board will consider adoption of the 2017-18 budget during the regular School Board meeting on June 19. A public hearing on the budget will also be held at that time. Learn more about development of the budget at www.friscoisd.org/budget.