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Soaring housing costs bump up payments Central Texas school districts must send to the state

A Texas flag and a U.S. flag in a school classroom
Patricia Lim
Austin ISD pays millions into the state's recapture program each year. The money goes to school districts in areas with less property wealth.

As property values in Central Texas continue to rise, Austin ISD will pay almost $50 million more than expected next school year into the state's recapture system.

Under the system, “property rich” school districts send back some of their locally raised taxes to the state. The idea is to help fund other districts that don’t have as much money brought in from property taxes.

In the proposed budget for next school year, AISD included a $798 million recapture payment — more than half the entire budget.

But Travis County told AISD this week that property values were appraised much higher than the district anticipated.

“In our estimates, we were projecting an 8% property value growth, which is the highest we’ve ever had,” Ed Ramos, the district's CFO, said. “This past week we did receive our actual preliminary numbers from the county … and our numbers are actually at 18% growth.”

The district is now expected to have to pay $846 million back to the state. AISD's proposed budget will change to reflect that and show the deficit rising from around $6 million to $26 million.

AISD pays more in recapture than any other district in the state — by far. But the city's popularity, and the rising housing costs that come with it, is affecting other school districts as well. As Austin grows, the population of surrounding communities grows, too, and with that comes increasing home values.

The Round Rock Independent School District, for example, has not had to pay into recapture the last couple of years. It estimates it will send back $40 million to the state next school year and around $70 million the year after that.

When the recapture program started, only a handful of school districts in wealthier areas paid into the system. Now, any district could find itself chipping in, even if by other measures it’s not a “rich” area.

“Our property values are going up in our district just like everywhere else in the Austin area,” said Tim Savoy, the spokesperson for Hays CISD, which serves students in Kyle and Buda.

The district doesn't pay into the system yet, but it's "getting there," he said. "We'll just take it a year or two at a time on that."

AISD is advocating for a change to the formula, so districts aren’t spending so much money on recapture when they have their own financial needs.

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Claire McInerny is a former education reporter for KUT.
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