Based on current projections, the District would not need to increase the tax rate regardless of the outcome of this bond election.
More than $600 million of new properties, both commercial and residential, are expected to be added to the tax rolls this year allowing the AISD Board to maintain the tax rate while adding a new bond proposal and paying down the principal on existing bonds.
How Public School Finance Works
A school district’s total tax rate is primarily funded by local property taxes and made up of two parts: Maintenance and Operations (M&O) rate and Interest and Sinking (I&S) rate. Each has a designated purpose and budget.
M&O tax rate vs I&S tax rate?
The M&O budget is used for the daily operations of the district: utilities, salaries, furniture, supplies, food and gas.
The I&S budget is used to repay debt for capital improvements through voter approved bonds: new construction, renovations, HVAC and roofing replacements, land purchase, furniture and technology.
Bond elections only affect the I&S tax rate. Proceeds from a bond CANNOT be used as part of the M&O budget, or to increase salaries.
Under state law, as long as a homestead and over 65 exemption application have been filed with the local appraisal district, the dollar amount of school taxes imposed on the residence homestead of a person 65 years of age or older cannot be increased above the amount paid in the first year after the person turned 65 – regardless of changes in tax rate or property value – unless significant improvements are made to the home, increasing the overall value.
Will my taxes increase?
Property Tax Rate vs. District Tax Rate
Your property taxes are locally assessed taxes determined by numerous taxing units and the county appraisal district.
Various local taxing units (LTU)*, including the school district, establish individual budgets and tax rates which, combined with the appraised value of your home, make up your overall property tax rate amount.
Your home appraisal value typically changes yearly and is set by the Collin County Appraisal District. Allen ISD has no authority on your home appraisal value and cannot raise or lower your appraised value.
*Local taxing units include city, county, school and special services such as community college, hospital and road.
New State Law Requirement
In accordance with new state law, all school ballot propositions must include the following statement: "This is a property tax increase", regardless if there is no expected increase to the school district tax rate. Voters will see this language on all propositions; however, the AISD tax rate is not expected to increase as a result of the bond election.
Based upon the current taxable values of the district and conservative growth assumptions, it is expected that the I&S rate will remain at $0.41 following the election, regardless of outcome.
Comparison of Tax Levy on Average Residence
How do bonds work?
Bond election approval provides authority to Allen ISD Board of Trustees to approve the issuance of bonds, but does not automatically trigger the sale of bonds. Bonds will not be sold immediately.
Based on the timing of the identified bond projects, the bonds will be sold in separate transactions spread over 1 – 5 years. For shorter-life assets (i.e. technology devices), the bond maturities will be closely matched with the life of the assets.
ALLEN ISD FINANCIAL TRANSPARENCY
AISD Annual Budget
The Allen ISD annual budget, approved each fiscal year by the Board of Trustees, includes the general fund (maintenance and operations fund), food service fund and the debt service fund. Local, state and federal funding is anticipated to bring in a total revenue of $205,232,162 which will service the annual budget.
The district’s general fund makes up the majority of the annual budget and supports expenditures for instruction, instructional support services and staff salaries, general administration, facilities and maintenance, district operations, and other expenditures. Below is a breakdown of the Allen ISD 2020-2021 general fund:
The chart below shows the district’s M&O and I&S tax rate history over the past eight years:
Since 2013, the Allen ISD tax rate has been lowered by a total of 21 cents. In 2019, the tax rate was lowered by 9 cents as part of state legislative order (House Bill 3):
How does Allen ISD’s bond debt compare to surrounding districts?
The chart below provides an outlook of each school district's debt (Principal & Interest) to income (Taxable Valuation) ratio. Each district's taxable valuation is based on their tax base of commercial and/or residential properties. The total principal and interest per taxable value shows what percentage of their taxable valuation is outstanding debt.
Allen ISD routinely looks for opportunities to refund or refinance its issued bonds. In the past 10 years, the district has saved taxpayers approximately $79,777,360 through refunding.
In February 2020 alone, the district was able to redeem $28 million in bond principal and $17 million in interest savings.
The chart below shows this savings: