Arlington ISD trustees cut more than a penny off the district’s property tax rate, but homeowners likely will pay more in district taxes because of higher home values.

The school board voted unanimously for the new rate, while blaming the state’s property tax formulas for anticipated revenue losses.

The district’s new tax rate will be $1.1035 per $100 valuation — 1.2 cents lower than the district’s 2023-24 rate.

In a rare occurrence, trustees adopted a rate lower than Arlington ISD’s no-new-revenue tax rate of $1.1409. School boards typically have to adopt the no-new-revenue rate to bring in the same amount of revenue as the previous year. 

The difference reflects a 3.74-cent decrease in the tax rate, but the drop does not mean a lower Arlington ISD property tax bill.

Two smaller rates form the overall property tax: the maintenance-and-operations rate and debt service rate. The maintenance-and-operations rate funds day-to-day operations, including instruction, curriculum, teachers and staff compensation. The debt service rate is used to pay off debts, such as the district’s bond program.

Arlington ISD’s debt service rate stayed at 29.07 cents for the second year in a row. The district’s maintenance-and-operations rate, which is effectively in the hands of the Texas Education Agency, decreased to 81.28 cents.

That drop will result in about a $8.1 million loss in what the district will make to fund day-to-day operations, according to district estimates.

Texas saw property values increase an estimated 2.87%, while Arlington ISD saw property values increase 4.8%.

The district expects property tax revenue to drop $62.4 million to $435.3 million for the 2024-25 school year. 

“It is what it is, we are cutting taxes and we’re bringing in less revenue,” said school board President Justin Chapa at the meeting.

As trustees adopted the new tax, they had questions about how the rate cut relates to the district’s 2024-25 budget, which passed in June with a $25.1 million deficit.

Darla Moss, the district’s chief financial officer, told trustees she had factored the cut into the district’s revenue forecasts when the school board approved the budget. Adopting the lower tax rate will not lead to the district receiving less revenue than it anticipated in the budget, Moss said.

Moss’s June presentation showed that the tax rate would see no change. At the Sept. 5 meeting, she told trustees that when the district publishes public notices ahead of budget adoptions, it defaults to presenting the unchanged tax rate from the previous year.

Arlington ISD officials do not use the public notice figures in their revenue forecasts.

A budget amendment will be presented to the school board later in the school year to reflect adjustments, including the updated property tax information, she said. The district approves a budget amendment every year, and the changed tax rate will not have a significant impact on the amendment.

Trustees blame state for underfunding

Trustees expressed frustration that the district’s maintenance-and-operations rate, which is calculated by the Texas Education Agency, led them to adopt a rate lower than the no-new-revenue rate. 

TEA calculates the maximum rate a district can levy based on the statewide increase in average property values and the district’s average property value increase. For Arlington ISD, TEA determined the maximum rate at 64.28 cents. 

School districts can exceed that cap with either voter approval or a majority vote of the school board to collect up to an extra 17 cents, according to the Texas Education Agency.

Trustee David Wilbanks said he thinks Arlington ISD’s situation points to a flaw in the system that’s outside of the district’s control. Chapa echoed that sentiment. 

“It’s a bit like if my family were going further in debt and I decided to go take a lower paying job at the same time and bring in less revenue,” Chapa said. “That seems to be the position that we have been put in.”

Earlier this year, the state notified Arlington ISD of its new “property rich” status, meaning the district’s revenue from local property taxes exceeds what Texas determines the district needs to operate. Under the 30-year-old Robin Hood law, Arlington ISD will send some excess property tax revenue to Texas for the government to redistribute to property poor districts.

Arlington ISD estimates its current excess revenue falls around $6.5 million and included that amount in its 2024-25 school year budget, Moss stated in an August email to the Report. TEA will determine the year’s final Robin Hood payment amount in September 2025.

Drew Shaw is a reporting fellow for the Arlington Report. Contact him at drew.shaw@fortworthreport.org or @shawlings601.

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