Stack of cash

Residents in Little Elm ISD have a say as to how the district sends money back to the state.

Districts in Texas are subject to recapture if the property value in their district surpasses a certain threshold. Little Elm ISD has traditionally been a property wealthy district, meaning it is subject to recapture.

In the past, districts in Texas could purchase attendance credits from the state and have those funds withheld from their state allotment. But per House Bill 3, which passed at the 86th Texas Legislature in 2019, recapture districts must now have an election to purchase those credits.

Districts have other options to send payments to the state, but in September the LEISD Board of Trustees voted to purchase average daily attendance credits. The measure is Proposition A on this year’s ballot.

In a video message to the community posted last week Superintendent Daniel Gallagher explained the measure.

“It has nothing to do with taxes or the raising of taxes,” Gallagher said. “It’s really about the wealth equalization across the state of Texas so that districts across Texas have the opportunity to share the wealth.”

Besides purchasing attendance credits, other options for districts include consolidating with another school district, detaching property value revenue, contracting for education of non-resident students and having tax base consolidation with another school district.

“If the voters vote for this we basically continue paying the state our share of our wealth equalization that we need to send back to the state,” Gallagher said. “Little Elm ISD is considered a property wealthy district. Some of our tax dollars go back to the state, which is then sent to other districts. No matter what, the state is going to collect that money. So if the voters vote against it we still have to send the money to the state. But what could happen is we consolidate with another district, which would mean a huge change for Little Elm ISD where it might not be Little Elm ISD.”

He said another potential outcome is the state detaching some of the district’s property tax revenue to be sent to another district.

Another result of HB 3 is the payments districts send to the state are no longer tied to a certain level of wealth per weighted average daily attendance. Instead districts must send repayments if their tier one local share of revenue exceeds the district’s entitlement.

District officials said that reduced the amount LEISD has to send to the state. For 2020-21 that amount is expected to be $233,000, whereas without the change it would have been $1.7 million. In the past that amount was approximately $1.2 million.

Little Elm ISD voters can also vote on Place 1 for the Little Elm ISD Board of Trustees where incumbent LeAnna Harding faces Monique Thompson. 

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