Three local school districts could send at least half a million dollars of property tax money back to the state this year.
Thanks to a funding mechanism known as recapture, Argyle, Lake Dallas and Pilot Point ISDs are projected to surrender a combined $529,143 of their local tax revenue to the state in an attempt to equalize wealth between school districts. The three schools are among the 217 Texas districts that will send back $2.69 billion in property taxes, according to The Dallas Morning News.
To calculate recapture payments, state officials divide property tax values within a district by the average daily attendance of its students. If a district exceeds a certain threshold of wealth per student, they have to send money back to the state, which is then distributed to poorer districts.
With property values still skyrocketing in Denton County, districts with stagnant or waning enrollments will see less of their local dollars going to their local schools.
Recapture payments are nothing new for Argyle ISD, a district that has sent roughly $6.3 million back to the state since 2004. This year, preliminary projections show Argyle owing $272,830, but the district’s chief financial officer, Elizabeth Stewart, said she expects the payment to hit $450,000 once final numbers are in.
While the payment makes up a small portion of the district’s budget, Argyle Superintendent Telena Wright said she thinks recapture money would be better spent in local schools on things like technology, extra teachers, career and technology programs or building maintenance. She added that recapture could hinder a school’s ability to ask residents for a tax increase in the future.
“It’s very difficult for a taxpayer to vote for a tax ratification election if they know that so much of the increase will go to the state,” she said. “Texas has come to a place where the state is funding a smaller percentage of public education compared to previous years. The burden of paying for local school districts is being pushed to the taxpayers.”
Argyle’s enrollment numbers continue to rise as the district adds between 100 to 200 new students each year. Despite the enrollment growth, Wright said she doesn’t anticipate a break from recapture payments or any changes to the district’s current tax rate.
Conversely, enrollments for Lake Dallas and Pilot Point during the 2016-17 school term hit a five-year low, according to Texas Education Agency data.
In its second consecutive year as a recapture school, Pilot Point is projected to shell out $116,855 for the 2018-19 year. Lake Dallas hit recapture status for the first time this year and is expected to pony up $139,458.
Representatives from either school district did not return requests for comment by press time, but officials in Lake Dallas have previously expressed their concern about the growing charter school movement.
In a joint meeting with Denton ISD and the city of Corinth in December, the Lake Dallas school board and Superintendent Gayle Stinson worried about a loss of funding as more families choose to enroll in charter schools around North Texas. TEA numbers show that more than 1,800 students have transferred from Lake Dallas to a charter school since 2012.
Charter schools aren’t subject to recapture because they don’t receive local funding.
State Rep. Lynn Stucky, R-Denton, said he doesn’t think charter schools impact recapture as much as the growing economy in Texas.
However, he said he agrees with local schools about the need to eliminate the current funding formulas.
“We need to revamp the whole system,” he said. “We tried in the last legislative session, but things went different directions in the different chambers. We have ideas, but we need to make sure that [school finance] is a priority.”
Even schools that don’t have to surrender local funds this year are keeping a close eye on their own situation.
During a March school board meeting, Denton ISD officials projected that the district could be subject to recapture payments by the 2022-23 school year despite a surging enrollment.
“This is about as rosy a picture as you’re going to have at any school district in the state of Texas because we’re growing students and we’re growing property value,” Superintendent Jamie Wilson said during the meeting. “If you’re losing students and losing property value growth, you’re losing employees. You’re losing everything that you have.”