Waco Independent School District homeowners are likely to see tax bills shrink by hundreds of dollars after the school board this week signaled it would cut the tax rate by more than 21 cents per $100 valuation.
That cut comes on top of a $100,000 school homestead exemption the state of Texas has approved and is awaiting voter approval in November.
Trustees on Thursday voted 6-0 to declare their intent to adopt a tax rate of $1.029 per $100 in valuation, with Jeremy Davis absent from the vote.
The new rate, a decrease from the 2022-23 rate of $1.242, would help fund a $161.7 million budget for the new fiscal year. A vote and public hearing on both scheduled for Aug. 24.
The district’s tax base rose 11% to $9.1 billion this year, according to the McLennan Central Appraisal District, continuing several years of double-digit increases.
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The board last year voted to keep the tax rate virtually unchanged, but rising valuations meant higher taxes for many taxpayers.
An $18 billion tax relief package signed last month by Gov. Greg Abbott uses state funding to lower school property tax rates, and pending voter approval, increases the school homestead exemption from $40,000 to $100,000.
With the new homestead exemption, the average homeowner in Waco ISD would see taxable value drop from $132,282 in 2022 to $96,185, according to the appraisal district.
Based on those numbers and the proposed tax rate, the average homeowner would see a tax cut of $653.20.
An increase of some $2.4 million in state funding to Waco ISD will largely offset the loss of property tax revenue for the district, Chief Financial Officer Sheryl Davis told trustees at their budget meeting Thursday.
More crucial in determining state revenue is the district’s student enrollment and attendance levels, and Davis cautioned the board that the district’s downward trend in both will shrink the state’s share of funding.
Despite a recent uptick of 38 students in the district’s average daily attendance, which Davis termed “a great gain,” the finance officer built the administration’s proposed $161.7 million budget on a projected enrollment of 13,698 students and estimated ADA of 11,816, both down from last year and continuing a multi-year decline.
While the state’s basic allotment of $6,106 per student remains unchanged, this year’s proposed budget includes nearly $4 million in teacher and salary increases, more than $456,000 in higher utility costs, some $549,000 in additional security costs required by the state and a mandated $1.3 million for special education.
Expenditures exceed revenues by $4.6 million in this year’s proposed budget, which will cause the district to dip into its fund balance to cover the shortfall, Davis said.
The district also faces growing financial pressures in higher teacher and staff salaries to remain competitive, as well as rising health care costs for employees and the need to replace and upgrade capital assets such as buses, Davis said. She also warned trustees this is the last year for federal funding for pandemic relief, which now covers $6.3 million in personnel salaries as well as an appreciable amount of the district’s technology funding.
Superintendent Susan Kincannon also saw darkening clouds without more financial support from the state.
“We have some significant challenges ahead,” she said. “I hope the Legislature will help if they meet (in special session) in October, but the politics don’t seem to be in our favor.”
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