Taxpayers can see three troubling trends at work in this year’s $1.3 billion Austin school district budget.
There will be 1,300 fewer students expected as the district’s enrollment declines for the fourth consecutive year.
Property tax bills for schools will likely surpass $4,000 for the owner of an average-value home, as appraised home values continue to grow.
And the district will give $406 million in Austin property tax revenue to the state in its annual recapture payment, the most local revenue being forfeited by any district in Texas under the state’s controversial school finance system.
The school district’s spending plan for the 2016-2017 fiscal year is a 12-percent increase over current year. Yet because the revenue the district is forced to give back to the state is going up, the operations budget is only rising by less than 2 percent. But the budget does make room for a 3-percent raise for the district’s teachers and other employees.
The drop in enrollment doesn’t come as a surprise to district leaders, as the latest demographic report projected student enrollment to decline annually, with Austin losing more than 6,100 students in the next decade.
Despite enacting countermeasures, including adding prekindergarten for 3-year-olds and launching a marketing campaign to attract and retain students, the district has already lost more than 2,500 students in the past three years. The declines have come as enrollment in neighboring school districts and local charter schools have seen steady increases.
The student loss costs the school district millions in state funding. And because the state’s complex school finance system is tied in part to the attendance of students, fewer students means the district must give more to the state to help fund property-poor school districts.
The Austin school district has made small tax rate decreases, including those needed to avoid exceeding the rollback tax rate and therefore an election on the tax increase. But the average homeowner continues to pay more as property values rise.
The tax rate has decreased about five cents since 2013-14 to the estimated $1.192 per $100 of assessed property value that is proposed for next year’s budget. The average taxpayer is already paying more than $700 more since 2013. Last year, the average homeowner paid $3,900 in school taxes. While the 2016-17 home values have not been released, taxes are expected to go up as preliminary appraisal values are projecting an increase of 14.9 percent.
The Austin district expects to pay the state an additional $133.3 million next year in a recapture payment required of property wealthy districts to subsidize poor districts elsewhere in Texas, a near 50 percent increase.
Austin is considered property-wealthy. As property values rise and enrollment continues to decline, greater percentages of the district’s tax revenue will go to the state.
Advocates for property-poor districts have said Austin is not unfairly burdened by recapture because the district has more to spend per student.
After handing over the money to the state, the district’s operating budget is expected to increase by $4.6 million.
Raises for teachers
The preliminary budget gives employees a three percent across-the-board salary increase, which will cost $15 million, and lifts hourly employees to $13 per hour, a $1.4 million expense.
Other changes to the budget include a projected $3.9 million decrease to payroll as fewer teachers and staff are needed because of the loss in student enrollment, and increases that include utilities and insurance costs, and the addition of 15 full-time employees to the campus-based technology team, among other things.
The school board is scheduled to adopt the budget June 20.
The Austin school district has made small tax rate decreases, but not enough to keep the average homeowner from paying more as property values rise.
Year | Tax Rate | Taxable Average Home Value | Taxes
2012-13 | 1.242 | $255,632 | $3,174
2013-14 | 1.242 | $278,271 |$3,455
2014-15 | 1.222 | $307,194 | $3,754
2015-16 | 1.202 | $328,281 | $3,913
2016-17 | 1.192* | unknown | unknown
*projected, appraisals not yet certified but are projected to increase
source: Austin school district, Travis County Appraisal District