Did You Know: Allen ISD is at risk of losing approximately $3.03 Billion of its tax base on May 1, 2021?
Allen ISD will hold a special election, known as an Attendance Credit Election, on May 1 seeking voter approval for the district to pay recapture by purchasing attendance credit from the State with local tax revenue. An attendance credit is simply the name given for a district to equalize its wealth through recapture payments.
The district has paid recapture funds by purchasing attendance credit from the Texas Education Agency (TEA). Until this year, the district has used a state exemption to have recapture funds taken out of its annual state funding without the need for a special election.
The special election is required by the state due to changes by Texas House Bill 3 in the 2019 legislative session. Allen ISD will only have to hold this election one time.
What is Recapture (AKA Robin Hood Payments)?
Texas law requires school districts that have a high property wealth per student to give a portion of local tax revenue back to the state. Those funds are then shared with school districts showing low property wealth per student. The law, which is commonly referred to as the “Robin Hood law,” has designated Allen ISD as a Chapter 49 or property wealthy district based on our property values. Therefore, a portion of Allen ISD property taxes are subject to recapture by the state for redistribution.
Can Allen ISD End Recapture?
Area districts such as Plano and Frisco ISD have been returning funds for more than fifteen years. In Allen ISD, tax revenue has been subject to recapture since 2011. Currently, AISD pays $1.2 million in recapture to be able to receive $4.9 million in revenue.
For AISD to be able to stop paying recapture, the district would need to lower the M&O tax rate by approximately $0.0389. As a consequence of removing $4.9 million from its budget (which is comprised of more than 82% of personnel salaries), Allen ISD would have to eliminate teacher and support positions throughout the district, leaving many of the district’s essential programs at risk of losing funding.
Therefore, it is not feasible for Allen ISD to end recapture.
What Happens if the Election Fails?
If the Attendance Credit Election is not approved by Allen ISD voters, the TEA will begin a "Detachment of Territory" procedure to remove $3.03 Billion worth of commercial property from Allen ISD's property values. This detachment would be a permanent loss of local control in our school district.
The above chart lists the Top 10 Taxpayers in Allen ISD. This total represents nearly $943 million in commercial taxable value, meaning that the TEA would still need to detach an additional $2.1 Billion to collect its necessary recapture amount. Please note that the actual list of detached properties would be determined by the TEA.
As a Taxpayer in Allen ISD, What Does This Mean to Me if the Election Fails?
If the election fails, taxes will rise on a median single-family home.
The main impact of Allen ISD losing $3.03 billion in property tax value to detachment of territory is AISD would need to raise the I&S tax rate by approximately 9 Cents in order to continue to service the district’s current debt schedule. This increase would equate to a $337.50 yearly tax increase per average AISD single-family home ($375,000).
What Happens if the Election is Approved?
Allen ISD has paid its recapture payment using attendance credit since 2011. A vote "for" the election allows Allen ISD to continue using the same process. Other items to note if the election is approved by voters:
- The total tax rate will not change.
- The district will continue to use “Purchasing Attendance Credit,” which is the most cost-effective method of recapture payment.
- AISD will be able to continue providing the quality education and resources currently delivered by our teachers in modern, well-maintained facilities.
If Allen ISD has Used the Attendance Credit Option Since 2011, Why is a Vote Now Required?
Under previous law, the State would remove, or net, the recapture payment amount from the funding it sent our district. Under the new House Bill 3 law passed by the legislature in 2019, the state can no longer net the payment, and districts must now send a check directly to the state. In order for the district to have permission to send this check, a one-time voter approval process is necessary.
Several Texas school districts, including McKinney ISD, will also be holding special attendance credit elections this year. Many larger property wealthy school districts such as Plano and Frisco ISD held elections when they were first designated as recapture districts.
How Can I Vote in the Election?
The Attendance Credit Election will be held in conjunction with the Allen ISD Board of Trustee and Allen City Council elections on May 1, 2021. Early voting begins on April 19.
Early voting will take place at the City of Allen Municipal Courts Building (301 Century), and Election Day voting will take place at the Municipal Courts Building and the Allen ISD Service Center (1451 N. Watters). More information about specific dates and times will be posted as they become available from the Collin County Elections Office.