Frequently Asked Questions
School Finance Frequently Asked Questions

Does my child’s school get as much funding as it did 10 years ago?

The Texas public school finance system provides funding to more than 5.3 million students, 8,700 campuses and 1,200 school districts and charter schools. Funding our school system is a shared responsibility between local tax payers and the state. In the past 10 years, the state’s level of funding per student has decreased $339 per student per year. If adjusted for inflation, Texas spends $795 less per student per year than it did 10 years ago. Local taxpayers are making up for the lost dollars. In 2008, local taxpayers paid 44.8% of the cost for educating Texas students. Now, they pay 55.1%.

Who funds Texas public schools?

The Texas Constitution explains it is the responsibility of the state Legislature to establish and maintain an efficient system. From 1993 to 2008, funding our school system was roughly an equal responsibility between the state and local taxpayers. As property values began to rise, the state gradually put their funding elsewhere, while local taxpayers begin to pay more of a percentage to support and maintain an excellent school system.

My home value continues to rise, and I appear to be paying more school taxes. Why is this happening?

Increases in NISD home values do cause a homeowner’s school taxes to rise; however, the increases do not provide an ongoing benefit to NISD’s operating budget. It actually has the opposite effect. As NISD collects more money from local taxpayers due to increased property values, state funding for NISD decreases. In fact, under recapture (also known as the Robin Hood program) state officials have often used the benefit of additional local tax dollars generated in school districts like NISD to fund other parts of the state budget unrelated to public education. Recapture is discussed more below.

How much has state funding decreased?

The chart below shows a history of the decrease in state funding over the years.

Fiscal Year Local State Total %State Share
2019* $30,723,953,480 $18,843,790,611 $49,567,744,092 38%
2015 $24,431,975,134 $18,779,056,276 $43,211,031,410 43.5%
2010 $20,285,450,102 $17,707,557,502 $37,993,007,604 46.6%
2005 $17,549,000,000 $10,454,000,000 $28,003,000,000 37.3%
2000 $11,717,400,000 $10,391,400,000 $22,108,800,000 47%
1995 $8,743,300,000 $7,283,400,000 $16,026,700,000 45.4%
1990 $5,975,700,000 $5,137,900,000 $11,113,600,000 46.2%
1985 $4,169,000,000 $4,554,800,000 $8,723,800,000 52.2%

*Data for 2019 is estimated

What makes up a school district’s tax rate?

A school tax rate is made up of two components: the Maintenance and Operations (M&O) rate and the Interest and Sinking (I&S) rate.

Tax Rate

The Maintenance and Operations (M&O) rate, currently $.97, is used to fund the day-to-day operations of the district like payroll costs, utilities, and maintenance of schools and facilities; the M&O fund is often referred to as the General Fund.

The Interest and Sinking (I&S) rate, currently $0.45, can only be used to make payments on district bonds that fund construction and other specific items like technology and buses, much like the mortgage on a home. The I&S rate is often referred to as the debt service fund.

Northwest ISD’s combined tax rate is $1.42.

What compromises NISD’s Maintenance and Operations Budget?

More than 77% of Northwest ISD’s maintenance and operations budget is funding personnel. One of NISD’s goals is to recruit, value, and retain an exceptional staff to create a rewarding learning environment. The following chart shows the breakdown of NISD’s M&O budget.

M&O Budget Pie Chart

What is recapture?

Also known as Robin Hood, Recapture or Chapter 49 school districts began in 1993. Chapter 49 school districts are considered to have high property values, according to a methodology set by the State. These districts are required to send more of their own local tax revenue to the State for recapture. Approximately 33 school districts were subject to recapture for a total amount of $130 million. More than 400 school districts across Texas are subject to Robin Hood, and together, those districts send the state more than $1.5 billion per year.

Is NISD a Chapter 49 district?

Yes, NISD is a Chapter 49 school district and has paid more than $280 million to the state in the past 20 years. These funds are not available for the district to use to meet student or any other needs. The district will lose approximately $4 to $5 million to the state this year in recaptured funds and the amount is projected to increase substantially in the future.

Does this mean some of my tax dollars are going to fund other school districts in the state?

Possibly. The state can use recaptured funds collected as Northwest ISD taxes to fund other school districts. However, the state is not required to use recaptured funds on education. The state can use NISD’s recaptured funds to support other parts of the state government that have nothing to do with education or our community.

What can be done to change this system?

As the state enters a Legislative session in January 2019, repairing the broken school finance system remains one of Northwest ISD’s Legislative Priorities. Dollars intended for Northwest ISD schools should stay in Northwest ISD schools. As Superintendent Ryder Warren prepares to talk to state Legislators this winter, the district will update residents and community members of our progress. If residents in Northwest ISD desire to reach out to Legislators, talking points, resources and contact information are found on the Legislative website.

What if the state of Texas school finance doesn’t change? How does this affect NISD?

Northwest ISD has been recognized by the state and nation for more than 15 years for its dedication to preparation of its budget, as well as the ability to execute and maintain a solvent financial system. However, because of the lack of state funding and its status as a Chapter 49 district, NISD is currently in a budget deficit.

The only ways for Northwest ISD to get more revenue per student are to have change the law on school finance or increase the tax rate by calling for a Tax Ratification Election.

Has the NISD school board called for a TRE?

At this time, no. Northwest ISD believes in the full support of the community in planning for the future. Every decision made begins with the question is this best for our kids. Currently, administration is researching every possible scenario including ways to reduce the budget. During this process, the district is working to gain feedback from the community, parents and staff. Financial transparency is important to Northwest ISD and any recommendation will be communicated to all stakeholders.