Fort Worth ISD expects to send $2 million from local taxpayers to the state of Texas under the so-called Robin Hood law — a first in the district’s history.
Despite more than eight in 10 students coming from low-income families, Fort Worth ISD is now considered property rich in the eyes of a nearly three-decade-old law that requires funds from wealthier districts to be redistributed to poorer districts. The law is often referred to as Robin Hood, or recapture, and examines districts’ taxes to determine whether money is taken or given.
The 2022-23 school year marks the first time that Fort Worth ISD will have to send a recapture payment to the state, according to Texas Education Agency records and district officials. The recapture law went into effect in 1994.
This is just the latest in financial issues that have cropped up for Fort Worth ISD. The district has a $40 million deficit in its general fund budget. A deficit was created when the district decided to dip into its reserves to balance the 2022-23 budget. Additionally, district officials expected a loss of $23.8 million in state funding because of lower enrollment.
Higher property values, lower enrollment explain recapture
District officials pointed to two reasons for why Fort Worth ISD now falls under the recapture law: property values and enrollment.
The total value of all taxable property in Fort Worth ISD increased nearly 10.2% this year, according to the Tarrant Appraisal District. This year, the district’s taxable value is nearly $46.7 billion. Last year, the value was $44.2 billion.
Because of the property value increase, the state compressed the Fort Worth ISD’s maintenance-and-operations tax rate, one of two rates that form the overall tax Fort Worth ISD levies.
In an 8-1 vote, the school board set Fort Worth ISD’s tax rate at $1.2816 per $100 of property valuation for the 2022-23 school year. The new maintenance-and-operations tax rate is 98.96 cents, and the debt service rate is 29.2 cents. The previous rate was $1.3432. This is a 6-cent reduction.
How much does an average Fort Worth ISD owe in property taxes?
Fort Worth ISD’s new property tax rate is $1.2816 per $100 of property valuation.
The average home in Fort Worth ISD has a taxable value of $189,515. That represents a 7% increase from last year’s average value of $177,106.
That homeowner will owe $2,428.82 in property taxes to Fort Worth ISD — a $49.93 increase from last year’s bill of $2,378.89.
This means some property owners in Fort Worth ISD likely will see a higher property tax bill.
The school board would have needed to adopt the no-new-revenue rate of $1.201128 to bring in the same amount of property tax revenue as the 2021-22 school year.
The adopted tax rate also was the highest trustees could adopt before triggering an election for voters to approve the rate.
The state capped Fort Worth ISD’s maintenance-and-operations tax rate at 81.96 cents. School districts can exceed that cap with either voter approval or a majority vote of the school board to collect up to an extra 17 cents, according to the Texas Education Agency. The extra pennies are for enrichment purposes.
Carmen Arrieta-Candelaria, Fort Worth ISD’s chief financial officer, told trustees that administrators anticipated having to pay recapture this year. However, her office’s estimates showed the district paying $900,000 — $1.1 million fewer than what the latest projections show.
Higher property values also means fewer dollars in state funding. The reduced tax rate is still bringing in about $27 million in additional revenue this year. Last year, Fort Worth ISD received about $450 million in property taxes. This year, that number is expected to be $477 million.
As for enrollment, Arrieta-Candelaria told the school board current numbers are coming in below the projection on which the budget is built. She did not disclose the current enrollment.
Fort Worth ISD spokesperson Claudia Garibay declined to disclose the current enrollment figure. She directed the Fort Worth Report to file an open records request for the number.
In May, Arrieta-Candelaria projected the district would have 72,981 students — a nearly 2,000-student drop from the 2021-22 school year.
School board member Camille Rodriguez asked if there is a possibility the district could receive any of that $2 million back at a later date. It depends on enrollment, Arrieta-Candelaria told the trustee.
“If we have less students, then we will have to send less money back,” the CFO said.
The Texas Education Agency notifies districts in July on whether they will have to submit a recapture payment. The notification is based on estimates the state receives from school districts.
TEA did not identify Fort Worth ISD as a recapture district when it sent the notification, according to the agency.
However, the notification comes in the middle of budget season for districts. That could mean districts that weren’t notified could be required to send a recapture payment to the state as they move along through their budget process. Individual districts often know ahead of time that they will fall under the Robin Hood law based on their own estimates, according to TEA.
Districts that do end up owing recapture will be included in the following year’s notification, the agency said.
Attempt to lower recapture payment
During the school board meeting, trustees tried to limit the impact of the $2 million payment. The district has a $820 million general fund budget this year.
“The state is going to take $2 million away from us because our valuations went up on us. Is there a tax rate we can set where they no longer steal the money from the school district?” school board member Michael Ryan asked.
Arrieta-Candelaria and Superintendent Kent Scribner warned any changes to the tax rate could have unintended consequences. Shaving pennies off the tax rate would likely mean losing additional state funding, the CFO said — a fact TEA confirmed to the Report.
“I would be concerned if the tax rate were not adopted at the rate that is being recommended, given the impact on the already declining revenues that we’ll more than likely have because of our declining enrollment,” Arrieta-Candelaria said.
Lowering the tax rate would have endangered the pay increases administrators were planning to give to all employees, Scribner said. Teachers received a 4% raise, paraprofessional and hourly employees got a 6% midpoint increase, and all other employees saw a 4% midpoint bump.
“We made a commitment to our staff, to our faculty and to our employees of significant (pay) increases,” the superintendent said. “To make that change now would put some of those in jeopardy.”
Other districts across state
Scribner put the $2 million recapture payment in a broader context to the trustees. He told them to think about Austin ISD, a similar-sized district. Because of the explosion of commercial and residential growth within Austin ISD, the Central Texas district has to send $800 million to the state.
“Ours is $2 million,” Scribner said. “This is new to us. We have not been in recapture, but as property values increase, particularly in the commercial areas as well, that has a large impact on it.”
Other North Texas districts have sent Robin Hood payments to the state since the law started. Dallas, Plano and Highland Park are among the districts that pay the most into recapture, according to The Dallas Morning News. Despite demographic differences, both Highland Park ISD and Dallas ISD each pay back more than $100 million to the state, and are considered property rich.
Fort Worth ISD will be joining more than 175 districts across Texas that will make a Robin Hood payment.
This year, the state estimates property rich districts could send $3.3 billion in recapture. School officials across the state have expressed frustration over Robin Hood as the state expects to add $14 billion to its growing surplus.
At the recent school board meeting, Ryan, a former educator, voiced that exasperation with a sarcastic comment directed at the state government: “I just love state finance with schools. They just find a way to get it away from you.”
Editor’s note: This story was update Aug. 26, 2022, to clarify the vote on the 2022-23 tax rate for Fort Worth ISD. The vote was 8-1, with trustee Michael Ryan dissenting.
Jacob Sanchez is an enterprise journalist for the Fort Worth Report. Contact him at email@example.com or via Twitter. At the Fort Worth Report, news decisions are made independently of our board members and financial supporters. Read more about our editorial independence policy here.