Why are property taxes so HIGH in Texas?? (Austin, Bowie: sale, homes)

[Trainwreck20]

If that house is worth 1.5 mil, then the annual property taxes would be $16,000+ per year; quite a bit less than the same value house in Austin (~$39,000/yr), but not inconsequential.

[hoffdano]

Originally Posted by Trainwreck20

It is a mess, but really, only AISD is getting royal screwed on it - to the tune of 100s of millions per year now, and increasing. As for lowering the tax rate? Well, if you lower you overall tax rate to decrease the RH outflow, you decrease your own inflow by 5X that or whatever. I.e, if you want to cut 50 million out of the RH, you have to lower your taxes to reduce income (for schools) by 250 mil. That over simplifies it, but the fact remains that you have to pay your own expenses - if you decide to underfund your schools by 25% to eliminate RH outflow, there will be catastrophic effects.

Not sure why you say AISD is the only ISD seriously affected by it.

Eanes ISD returns 47% the property taxes subject to Chapter 41.
Lake Travis ISD loses 35% to Chapter 41
AISD loses 22% to Chapter 41

[hoffdano]

Originally Posted by scm53

92% of the ISDs in the state have a M&O (operations) tax rate of between .90 and 1.00. That is what is potentially recaptured and redistributed. But in 92% of the cases, the difference in rates is no more than 10%.

Building money (I&S) isn't recaptured. A growing district like RRISD can have a large building need, and a large amount of voter approved bonds to meet that need. So the part above $1.00 is all kept locally. It may look like there is a large disparity between the rates, but there really isn't because only a portion is recaptured.

The formula is not this simple. M&O taxes above $1.00 to $1.06 (so-called "golden pennies") is 100% retained locally. Any amount above $1.06 is subject to recapture.

No I&S (debt repayment) funds are subject to recapture. That is legally a separate category and has nothing to do with M&O.

[Trainwreck20]

Well, of the property taxes, yes, then there are a few others with large percentage. I think that Lake Travis, though, has done a good job of 'bond financing', which shelters a huge amount of money from RH. The other difference is the amount of 'at risk' students in AISD vs those two districts. AISD has a very large percent of kids with free/reduced lunches, ESL, etc. whereas Eanes and LT very few. On paper, when they designed the RH program, the idea was to shuffle money from districts with low disadvantaged populations/high property tax income to districts with higher numbers disadvantaged children. AISD is an anomaly. All the other big cities had in-flows of cash from the program.

[hoffdano]

Originally Posted by tom331

Robin Hood is big deal. I have paid premium to get into the nicer school, but some of the premium give to other school districts. The school districts that receive the Robin Hool money might has lower tax rate than what we are being taxed by RRID. I still do not understand why the school districts, that send the money to other school districts, tax the property owners in such a high rate. Why not they set lower tax rate so that they don't need to send the money to other school districts?

You should spend an hour or two to understand how this all works.

The trigger for Chapter 41 is the amount of taxable property wealth per student. It has nothing to do with the actual rates set by a school district. These school districts are "property rich." The % of equalization or recapture for a school district is based on how much higher the taxable property per student is above the threshold.

Lets say a school district needs to collect $0.75 of property taxes to fund its maintenance and operations. Because this school district is property rich, it MUST set tax rates above $0.75 to fund its portion of recapture.

By the way - it looks like RRISD forecasts no Chapter 41 payments for this school fiscal year. If that is true, it means taxable property wealth per student has fallen below the threshold.

From RRISD's own website - a nice explanation:

https://roundrockisd.org/about-rrisd...chool-finance/

The school districts that receive Robin Hood funds by and large cannot raise enough funds locally to fund their schools adequately. These districts are "property poor." Without Robin Hood, they would have to raise their property tax rates far about the legal limit in Texas to operate their schools.

[hoffdano]

Originally Posted by Trainwreck20

Well, of the property taxes, yes, then there are a few others with large percentage. I think that Lake Travis, though, has done a good job of 'bond financing', which shelters a huge amount of money from RH. The other difference is the amount of 'at risk' students in AISD vs those two districts. AISD has a very large percent of kids with free/reduced lunches, ESL, etc. whereas Eanes and LT very few. On paper, when they designed the RH program, the idea was to shuffle money from districts with low disadvantaged populations/high property tax income to districts with higher numbers disadvantaged children. AISD is an anomaly. All the other big cities had in-flows of cash from the program.

I think there is no doubt LTISD has done a good job with the management of its money. That is one of the reasons its bond rating is so high, which gives it better interest rates on its bonds. I also agree AISD has a very different demographic than LTISD (or Eanes) and it faces different challenges.

But AISD has tons of money, and tons of property to tax. They have excess capacity in campuses - which costs lots of money to operate. They also receive far more revenue from the general category of "disadvantaged" targeted programs, whether federal or other.

[scm53]

Originally Posted by hoffdano

The formula is not this simple. M&O taxes above $1.00 to $1.06 (so-called "golden pennies") is 100% retained locally. Any amount above $1.06 is subject to recapture.

No I&S (debt repayment) funds are subject to recapture. That is legally a separate category and has nothing to do with M&O.

Oh, believe me, I understand all about "golden" and "copper" pennies. I was trying to keep it simple. You did a much better job.

We are in complete agreement about I&S money, which is the bigger point I was trying to make.

[scm53]

Originally Posted by Trainwreck20

The other difference is the amount of 'at risk' students in AISD vs those two districts. AISD has a very large percent of kids with free/reduced lunches, ESL, etc. whereas Eanes and LT very few.

AISD also, unlike most urban districts in the state, has a large number of "not at risk" kids, who effectively subsidize the education of others. From yesterday's AAS:

The district’s commitment to bring equity is most visible in its per pupil spending. The district spends the most on Eastside Memorial High School in East Austin, about $13,674 in 2014. Some of the money is financing consultants from a Johns Hopkins-affiliate hired to turn around the low-performing high school. That compares with per pupil spending at higher-performing Bowie High in Southwest Austin, about $5,280. Likewise, the district spent $8,837 per student on Webb Middle School in 2014 and $4,951 on Gorzycki Middle School. The differences in spending among elementary schools weren’t as wide but still followed similar trends.

The RH per student amount is purely based on ADA. - average daily attendance. It is per student (with some small extra allowances for bilingual, special Ed, gifted & talented - even for kids with parents in a combat zone). Bottom line is, AISD is underspending on some kids and subsidizing others. Hard to have much sympathy.

[tom331]

Originally Posted by scm53

AISD also, unlike most urban districts in the state, has a large number of "not at risk" kids, who effectively subsidize the education of others. From yesterday's AAS:



The RH per student amount is purely based on ADA. - average daily attendance. It is per student (with some small extra allowances for bilingual, special Ed, gifted & talented - even for kids with parents in a combat zone). Bottom line is, AISD is underspending on some kids and subsidizing others. Hard to have much sympathy.

The money spent per student between East Austin and other than East Austin has confirmed that money is not the main reason for the student performance. Many complain that there is no enough money for education, but the fact is that we have spent a lot of money for some students, but the out come is very disppointing. Without support from the family, we will waste more money on education without seeing a better result.

[scm53]

Originally Posted by tom331

The money spent per student between East Austin and other than East Austin has confirmed that money is not the main reason for the student performance. Many complain that there is no enough money for education, but the fact is that we have spent a lot of money for some students, but the out come is very disppointing. Without support from the family, we will waste more money on education without seeing a better result.

I'm not sure if that single data point is causative, or is just correlation. What I do know, is that for the last thirty years, we have chased classroom size as a driver for higher performance. The OECD studied classroom size around the world, and found:

Class size, together with students’ instruction time, teachers’ teaching time and teachers’ salaries, is one of the key variables that policy makers can use to control spending on education. Between 2000 and 2009, many countries invested additional resources to decrease class size; however, student performance has improved in only a few of them.

Reducing class size is not, on its own, a sufficient policy lever to improve the performance of education systems, and is a less efficient measure than increasing the quality of teaching.

Korea and Japan have huge classes compared to us -- between 30-35 kids per secondary classroom, while we have around 23. But on every standardized test, they run circles around us, placing 5th and 7th in the PISA tests, while we are 36th.

I do know that it is a mistake to confuse commitment to spending, with commitment to universal excellence in education. Maybe - like the Japanese and Koreans - we get better results with bigger classes, but a smaller number of excellent teachers?