$17.2 Billion in Local School TaxesAverage 2003 Total School Tax Rate Is $1.55 per $100 of Value
Texas independent school districts (ISDs) reported to the Comptroller's Property Tax Division (PTD) a total of more than $17.2 billion in 2003 school property taxes. This $858 million increase was 5 percent more than the 2002 total school taxes of $16.4 billion.
The 2003 average statewide tax rate increased almost 2 cents above the 2002 average rate. About 17 percent of Texas school districts reduced their local adopted tax rates, 43 percent kept the same rate and the remaining 40 percent of the districts increased their rates.
The 2003 school property value reports are for 1,031 Texas school districts, two less than in 2002. Allison and Fort Elliott ISDs in Wheeler County consolidated to form the Fort Elliott Consolidated ISD. Goree and Munday ISDs in Knox County consolidated to form the Munday Consolidated ISD.
The ISD reports do not include local school taxes by special county equalization districts and South Texas ISD, a school district that operates tuition free magnet schools for students in a three-county area. Tax rates reported are per $100 of property value.
Largest districts
The state's 10 largest urban districts accounted for 28 percent of the total 2003 school taxes. While Houston ISD's 2003 rate remained the same as its 2002 tax rate at $1.58, its total tax levy rose almost 5 percent to exceed $1 billion. Dallas ISD gained almost 2 percent, or $914 million, in 2003 taxes, while raising the tax rate about 3 percent.
Cypress-Fairbanks ISD in Harris County saw the largest increase (of the largest 10 districts) in total taxes at more than 9 percent. The school board adopted the same 2002 tax rate of $1.79 to generate $326 million in 2003 taxes.
The other seven largest districts—Austin, Plano, Arlington, Lewisville, Northeast, Fort Worth and Northside ISDs—saw their tax levies rise from 1 to 7 percent.
The 50 largest ISDs—or about 5 percent of all districts—accounted for more than 59 percent of the total 2003 school taxes.
For the third year in a row, the largest percentage increase in taxes for the 50 largest ISDs went to Frisco ISD in Collin County. Frisco ISD raised its tax rate a little more than 1 percent, but generated about 21 percent more in taxes. Keller ISD in Tarrant County was second with a tax rate increase of almost 1.5 percent to gain about 15 percent in total taxes.
Average tax rate
The 2003 average statewide tax rate was $1.552 per $100 of value, almost a 2-cent increase above 2002’s average rate. The 2002 average statewide tax rate was $1.534 per $100 of value, a 5-cent increase above 2001’s average rate. Table 1 shows the history of the average school tax rate since 1985.
Table 1
School Tax Rate History from 1985 to 2003The average school tax rate in Texas has increased by more than $0.74 from 1985 to 2003. Shown to the right are average school tax rates per $100 of property value for the last 19 years. These rates were computed by dividing the total of all rates by the number of school districts. Tax years 1991 and 1992 are the combined average tax rates for ISDs and the county education districts (CEDs) operating at that time.
* Combined ISD and CED rates
Source: Carole Keeton Strayhorn, Texas Comptroller of Public Accounts, Property Tax Division
This simple average rate calculation uses the adopted tax rates divided by the number of ISDs reporting. This average does not consider any overall tax value or levy changes resulting in tax rate increases or decreases.
The 2003 School Tax Rates and Taxes show the 2003 adopted tax rates and taxes of 1,031 ISDs as reported to the Comptroller. The list includes the percentage change in rates and levies for each district compared to tax year 2002.
Range of rates
The adopted 2003 ISD tax rates ranged from a low of $0.8998 per $100 of value in Nursery ISD in Victoria County to a high of $1.98 in McKinney ISD in Collin County. In 2002, Spurger ISD had the highest tax rate at $2.00, while Mirando City ISD in Webb County had the lowest rate at $0.54.
Only four districts had adopted tax rates of less than $1.00, compared to seven districts for tax year 2002.
About 41 percent of the districts—or 425—had combined rates between $1.00 and $1.50 per $100 of value. The remaining 602 districts, or 58 percent, had rates range from above $1.50 to the high of $1.98. Table 2 provides a range breakdown of 2003 tax rates.
Table 2
What was the range of 2003 ISD rates in Texas?Total ISD Rate Number of ISDs Percentage of All ISDs Less than $1.00 4 0.4 percent $1.00 to $1.20 15 1.4 percent More than $1.20 to $1.40 99 9.6 percent More than $1.40 to $1.50 311 30.2 percent More than $1.50 to $1.60 261 25.3 percent More than $1.60 341 33.1 percent Total 1,031 100 percent Rates are based on $100 of property value.
Source: Carole Keeton Strayhorn, Texas Comptroller of Public Accounts, Property Tax DivisionUps and downs
School boards in 180 districts—about 17 percent—reduced their school tax rates. Some 439 districts—about 43 percent—kept the same rate as in 2002. Another 412 districts—or 40 percent—saw their tax rates rise from less than 1 percent to nearly 178 percent in 2003. Table 3 shows the number of districts by percentage tax rate change.
Table 3
2003 Rate Changes in Texas School DistrictsPercent Change in Rate from 2002 Number of ISDs Percentage of All ISDs Decreases Less than 1 percent 91 8.8 percent 1 to 10 percent 83 8.1 percent More than 10 percent 6 0.5 percent Subtotal 180 17.4 percent No Change 439 42.6 percent Increases Less than 1 percent 80 7.8 percent 1 to 10 percent 289 28.9 percent More than 10 percent 34 3.3 percent Subtotal 412 40.0 percent Total 1,031 100 percent Source: Carole Keeton Strayhorn, Texas Comptroller of Public Accounts, Property Tax Division In Victoria County, Nursery ISD’s 34-percent tax rate decrease was the greatest of all districts. Even though the school district’s tax rate decreased, total taxes increased about 12 percent for new value in utilities.
Other large decreases in tax rates included Guthrie ISD in King County, 18 percent; New Waverly ISD in Walker County, 12 percent; Tornillo ISD in El Paso County, 12 percent; and Slidell ISD in Wise County, 11 percent.
With an increase of nearly 178 percent in its tax rate, Mirando City ISD in Webb County witnessed the largest rate increase from $0.54 to $1.50 per $100 of value. The ISD’s increased rate raised about 96 percent more in 2003 school taxes—from $565,865 to $1.1 million. In 2002, Mirando City ISD had the largest tax rate decrease at 64 percent, with the addition of new mineral value. The school district had adopted a 2002 tax rate of $1.25, well above its rollback tax rate, but local voters in a rollback election did not ratify that higher rate. The school district’s rollback tax rate of $0.54 became its adopted 2002 rate.
Other districts with substantial rate hikes included Webb Consolidated ISD in Webb County, 50 percent; Fairfield ISD in Freestone County, 42 percent; and Silverton ISD in Briscoe County, 25 percent. All three of these districts also saw their total taxes rise from about 30 to 54 percent.
Operating and debt rates
Property tax rates may consist of two parts: a maintenance and operations (M&O) rate and an interest and sinking fund (I&S) rate. The M&O rate covers general operating costs. The I&S rate, which is usually called the "debt" rate, is used to repay a district's debt.
The state's 2003 simple average M&O rate for ISDs was $1.447, while ISDs’ debt rate averaged $0.106.
State law places a tax rate cap of $1.50 on M&O rates. School boards in 488 ISDs—about 47 percent—adopted an M&O rate at the rate cap, compared to 405 ISDs, or about 39 percent in 2002. Another 32 percent—or 334 districts—have M&O rates between $1.40 and $1.50, compared to 2002 when 350 districts, or 34 percent, had M&O rates in that range.
Seven school districts in Harris County adopted tax rates above the $1.50 cap. These districts have authority by voter election for a higher M&O rate cap. The seven districts were Aldine, Deer Park, Galena Park, North Forest, Pasadena, Spring Branch and Katy ISDs. Katy ISD is located in both Harris and Waller Counties.
About 30 percent—or 307 districts—do not have a 2003 debt rate for repaying debt obligations. Of the 724 ISDs with debt rates, five districts have a debt rate of more than $0.40. McKinney ISD in Collin County set the highest debt rate at $0.48. With a M&O rate of $1.50, the district's total rate was $1.98, the highest adopted 2003 rate of all school districts.
