ATTENDANCE CREDIT ELECTION FAQ (QUESTIONS & ANSWERS)
This FAQ is a working document. New Q&A are listed at the bottom of this page.
Why is Allen ISD holding a special election?
In short, new state legislation is requiring Allen ISD to gain voter approval for a process to send excess local tax revenues back to the state under the Robin Hood law.
The ballot measure, called an attendance credit election, is required due to changes brought about by Texas House Bill 3 this past year. AISD is considered a high property wealth school district by the state. An exemption allowed the district to "net" its recapture against the state aid without a local election to obtain voter's approval. As a result, the state recaptures a portion of the school district’s local tax revenue. Those funds are ultimately redistributed to low property wealth school districts through legislation commonly referred to as the Robin Hood law.
Since 2011, Allen ISD has been making the payments by purchasing attendance credits from the state. This means that the state reduced its funding to the school district by the amount owed under recapture. Under the new law, the exemption is removed. In order to continue purchasing attendance credits to pay recapture, Allen ISD must seek approval from voters in a one-time special election on May 2, 2020. The election will be held in conjunction with the scheduled school district, city and county elections.
What is recapture?
Texas law put into place in 1993 established a system to equalize school finance in the state by taking funds from high property wealth school districts and redistributing those funds to low property wealth school districts. School districts with high property wealth per student are required by law to give a percentage of local tax revenue back to the state. Those recaptured 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 is subject to recapture by the state for redistribution. Allen ISD tax revenue has been subject to recapture since 2011.
Read more here: (Texas Tribune article on Robin Hood Law)
How much money is recaptured from Allen ISD tax revenues?
Allen ISD is projected to lose approximately $1 million in tax revenue through recapture in 2020. Last year (2018-2019), the district returned $3,718,422. The significant drop in recapture is due to state funding changes from HB3 in the 2018 Texas Legislature. Allen ISD has been making recapture payments using the attendance credit process since 2011. Click here for a complete list of Allen ISD recapture payments.
Are other Texas school districts required to hold attendance credit elections?
Before 2006, school districts classified as property wealthy were required to hold an election to pay using attendance credits. Since 2006, school districts have been able to file for exemptions so that an election was not necessary. Allen ISD became a property wealthy school district in 2011, which is why no election has been held to this point. Now the new law eliminates the exemptions and school districts such as Allen that did not hold an earlier election must conduct a one-time attendance credit election.
If voters approve the ballot measure, will it change the tax rate or the amount of property taxes Allen residents pay?
If approved by voters, Allen ISD will continue to make payments using attendance credits. A yes vote does not change the total tax rate or the amount of property taxes Allen residents pay. It also does not change the amount of state revenue Allen ISD receives.
If voters reject the ballot measure, will it change the tax rate or the amount of property taxes Allen residents pay?
If rejected by voters, Allen ISD would not be able to pay the state using attendance credits. The district tax rate would not change and the amount of property taxes Allen residents pay would not immediately change. Allen ISD, however, would still be responsible for the amount of recapture funds. The legislation dictates that the State of Texas would detach property from the district valued in the amount owed to the state. That property would be deeded by the state to another school district. If the school district were to lose commercial taxable property, it could impact future property taxes.
Does this election change the amount Allen ISD pays in recapture funds?
Regardless of the election outcome, Allen ISD is still required to reimburse the state for recapture funds. If residents approve the measure, Allen ISD would continue to pay using attendance credits. If voters reject the measure, the state is authorized to detach (remove) commercial property from Allen ISD and attach it to another school district. The property would not be returned to Allen ISD in the future, meaning that Allen ISD's total property wealth would be permanently reduced.
Does the new HB3 law require Allen ISD to hold an attendance credit election each year?
No. The law states that the school district must hold a one-time election to continue purchasing attendance credits.
What occurs if voters reject the ballot proposal?
If voters reject the measure, the school district cannot pay using attendance credits. Instead, the state is authorized to detach (remove) commercial property from Allen ISD and annex it to another school district. The property would not be returned to Allen ISD in the future, meaning that Allen ISD's total property wealth would be permanently reduced.
Why is it called an attendance credit election?
Allen ISD's special election is called an Attendance Credit election because that is the method our school district selects to pay recapture funds to the state. By paying the state to purchase attendance credits, the state adjusts the district's weighted average daily attendance of students (WADA) with recapture (Robin Hood). The formula adjustment lowers the district's wealth level to the maximum allowed.
Why doesn't AISD reduce our tax rate so we do not have to pay recapture or reduce the amount owed? (added Jan. 28).
For the year 2019-2020, the taxation process is already determined and the recapture must be addressed by the District. Potentially reducing the tax rate to eliminate recapture (excess local revenue) is a question for future years.
Voting against the use of Option 3 does not eliminate our recapture requirement for the year 2019-2020. It will still be owed by the District and the State Education Commissioner has authority to permanently detach property from the District and annex it to another school district to address our recapture requirement.
For future years, the Maintenance & Operations tax rate would need to be lowered by 3.89 pennies (2019-2020 tax rate = $1.0489) to eliminate our excess local revenue. For 2019-2020, these pennies of tax effort provide $5 million in Maintenance & Operations revenue to the District’s annual budget. This amount is projected to increase the next several years as student enrollment continues to increase. The Allen ISD School Board annually approves a M&O tax rate with these 3.89 pennies included in order to remain competitive with teacher / staff salaries, maintain strong academic programs for students, and support operating the District.
What options do school districts have to pay recapture? (added Feb. 18)
State law provides five options to pay recapture. Allen ISD has been using Option 3 since 2011. That is the same option this election is requesting approval for. The five options are:
1) Consolidate with another school district (creates a single district and results in loss of local control)
2) Detachment of property (permanent loss of taxable commercial property - approx. $2.2 billion for Allen ISD)
3) Purchase of attendance credit (pays recapture directly to the state but now requires election)
4) Education of non-resident students (pay recapture to property poor school district - requires election)
5) Tax base consolidation with another school district ( permanently combines M&O taxation & funding - lose local control)