LP Bond 2023

A school district tax rate is made up of two different tax rates. The first is Maintenance & Operations (M&O) which covers the day-to-day costs of running a school district with most going towards salaries and utilities. The second is Interest & Sinking (I&S) which is solely used for paying down debt. LPISD’s 2022-2023 M&O tax rate is $.9746 and I&S tax rate is $0.2819 for a total tax rate of $1.2565. Our school tax rate is significantly lower than the surrounding districts of Deer Park (1.2822), Goose Creek (1.3574), and Pasadena (1.3353). 

It is important to La Porte ISD and our community stakeholders to find a plan that would not increase the school tax rate. We are working with our financial consultant to determine our bonding capacity ceiling and ensure we stay below that amount that would result in a tax increase.

Since LPISD’s last bond election, the legislature passed a new law requiring school districts to include the language “THIS IS A PROPERTY TAX INCREASE”, even when the district is not expecting a rate increase. This is because the issuance of new bonds increases the term of the debt repayment at the current rate.

La Porte ISD does not set your property values, the Harris County Appraiser determines that. LPISD can only set the school district tax rate and must seek voter approval to increase.

The district does not make more money when property values increase due to two factors: Property Tax Compression: Property Tax Rate Compression was implemented in the 2019 legislative session under HB3 and SB2. As property values go up, the M&O tax rate goes down, resulting in neutral revenue for the district.

Recapture: La Porte ISD is classified as “property wealthy” and subject to the state’s Recapture (”Robin Hood”) Tax. In the 2021-2022 school year, La Porte ISD’s Robin Hood payment was $48 million. This is more than 40% of your locally generated operating tax revenue.

For residents 65-years and older, their school district tax bill will not increase, even if their property values increase (excluding major property improvements) as long as an approved Homestead and Over-65 Exemption application is on file with the Harris County Appraisal District, and the property has been owned as of Jan. 1 of the tax year.

Planning for the district’s current and future needs is one of the fundamental duties of school boards and district administrators. As such, there is a constant evaluation of facilities and other needs considering the age of district-owned structures, changes in technology, and even changes in instruction. When the district determines that it has needs beyond the capacity of the maintenance and operations budget, the Board of Trustees may issue a bond. The maintenance and operations budget covers the day-to-day expenses of the district, where 86% is directed toward staff salaries and benefits.

The Texas Education Agency in the Financial Integrity Ratings System of Texas (Schools FIRST Rating) sets the guidelines for school districts to have three months of operating expenditures in fund balance. Maintaining the required fund balance as well as the operational needs of the district (with limited state funding) may restrict districts from building adequate savings to fund facilities and infrastructure needs to accommodate construction costs of building a new facility or repairing and renovating an older one.