Frisco ISD has approved the lowest tax rate in at least 20 years, Chief Financial Officer Kimberly Smith said Monday.
During a special Monday evening meeting, the Frisco ISD Board of Trustees approved a combined tax rate of $1.3102 per $100 of appraised value.
The approved rate falls below both the calculated no-new-revenue rate and the rate to maintain revenue, Smith said. This is the third straight year that the district has lowered its tax rate, and the 2020 rate is projected to result in a $92 tax bill reduction for the average district taxpayer.
Smith said while FISD usually receives its taxable values in July, the certified and finalized values for this year were received about two weeks prior to Monday’s meeting.
The district’s total adjusted values for 2020 come in at about $43.6 billion, a 6.2% increase from the previous year, Smith said.
Most of that increase is due to new value, Smith said. Year-over-year appreciation of existing property values increased by 1.02% in Collin County and by about 2.65% in Denton County.
When the district approved its 2020-21 budget in June, it had been working with a projected 5% increase in taxable value. At the time, FISD anticipated a $1.3158 tax rate, according to a previous statement from the district.
The updated increase means the district’s tax rate must be compressed more than originally expected going by House Bill 3 (HB 3), a school finance bill passed by the Texas Legislature in 2019.
Smith said the district will see a roughly $3.8 million loss in revenue as a result of the higher-than-expected taxable value. The revenue loss will result in a hit on a budgeted surplus that the district had prepared in the face of unknown costs in the midst of the COVID-19 pandemic, she said.
“We just felt it was reasonable to keep a nice cushion in there, and so this just kind of erodes some of that surplus that we projected,” Smith said.
With a requirement that a portion of the tax rate be compressed in connection with property value growth, Smith said this will likely not be the last time the district sees a compression in part of its property tax rate.
“There is an expectation that we will probably have to decrease our (maintenance and operations) tax rate again next year,” she said. “I am not sure if it will be by the same amount, more, less. It really just depends on how property values do statewide over the next year.”