Saturday, January 18, 2025
AZLE — Azle Independent School District trustees are worried the district could lose out on funding by no fault of its own.
The district and five others were highlighted at a Nov. 8 Tarrant Appraisal District board meeting for being at risk of state funding cuts in 2026. Due to a rapidly changing property market, lowered interest rates and other factors officials are concerned the district could fail an upcoming Property Value Study by the Texas Comptroller’s office.
At least once every two years, the state comptroller estimates taxable property values in each school district to ensure local appraisal districts are assessing home prices at market value in an attempt to promote equality in school funding. In theory, districts that raise more money in local property taxes receive less funding from the state, while those that raise less receive more. Districts that generate more funding through local property taxes than the per student allotment determined by the state are subject to recapture and may be required to send some of their funds to the state.
Discrepancies between the values found by county appraisal districts and the state can cause schools to miss out on critical funding. In instances where local districts and the state differ by more than 5%, schools may be granted a two-year grace period before losing funding if they also pass an additional Methods and Assistance Program Review along with other legal requirements. If the difference in values exceeds a 14.5% threshold, or 85.5%, schools may lose state funding altogether without a grace period. Preliminary figures presented by Chief Appraiser Joe Don Bobbitt have trustees and administrators worried that one of these scenarios may be possible.
This intersection of modern property tax law and state funding for schools is the result of about 50 years of legal back-and-forth between districts and the state. It has been contested, taken to court and altered numerous times, with many school boards protesting its most current iterations for a variety of reasons.
The number of school districts that have failed the PVS has nearly doubled in the last few years. Last year, 106 school districts across Texas were assigned invalid values compared to just 59 in 2021. Schools have lost more than $120 million in funding as a result.
TAD has seen no shortage of changes to policy since the expansion of the board to include three new elected members in May. In July, the board voted to transition from reappraising property values every year to every other year instead, not unlike Parker County. It also approved a soft 5% threshold limiting appraisal increases for a property’s market value. In August, the TAD board approved additional significant changes to its reappraisal plan in an effort to further slow property value increases. In a Dec. 13 meeting, the TAD board voted to not renew its membership with the Texas Association of Appraisal Districts over disagreements about the frequency with which it is required to reappraise property values.
While homeowners may wind up paying less in taxes, some district administrators and trustees feel they’ve been left holding the bag. For Azle ISD, this only adds to the uncertainty on the future of its funding. At a Dec. 16 board meeting, trustees decried possible factors that may have impacted the district’s ability to pass a PVS.
“This is something we can get penalized for, but we have absolutely no control,” board secretary Sarah Bennett said.
Another possible problem raised by trustees is the different times of year that appraisal districts and the state comptroller evaluate the property market. Appraisal districts are required to appraise property using historical Jan. 1 to Dec. 31 market values while the PVS uses sales from a time frame of six months from June to January or from January to July. Board of trustees president Bill Lane said It’s like comparing apples to oranges and that the process is too confusing for most to make sense of.
“Could anybody come up with a more convoluted way to determine those values?” Lane asked. “They’re making it harder than it already is.”
During the November meeting, Bobbit joked that the only one who really understood the math behind most of these processes was former Texas Education Agency finance expert Omar Garcia.
After a promise of additional funding stalled out in 2023 Texas legislative sessions, many districts have been hurting for cash. According to recent surveys, most Tarrant County school districts have adopted deficit budgets for the 2024-25 school year. While Azle ISD has passed a balanced budget, tensions run high in talks about future funding. In further discussion, Superintendent Todd Smith highlighted the impact inflation has had on school spending with its cost for insurance, fuel, utilities and employee compensation having increased by 179%, 73%, 29% and 14% respectively.
The exact funds available are determined by a statewide basic allotment per student plus additional funds based on district population, poverty level and other characteristics of families in local schools. The state’s basic allotment has been set at $6,160 per student since 2019.
“Sometimes out there in the general public, they think, well, your values are increasing, the district's growing, you must be getting more money,” Assistant Superintendent of Finance and Operations Matt Adams said. “Well, if we, if we generate $6,000 of that $10,000 locally, then all the state does is lower their contribution to $4,000 and we're still just getting that $10,000 per student.”
Azle ISD has joined many other districts across the state urging for an increase in the basic allotment. In a presentation, Smith said the allotment would need to increase by $1,340 in order to catch up to inflation since 2020. In 2024, Smith said district costs exceeded state funding in several critical areas including special education, security and transportation to the tune of a combined $7 million.
In the event that Azle ISD fails the study, it will have a chance to file an appeal and argue about the accuracy of the state’s values. In the November meeting, TAD board member Gary Losada attempted to reassure school officials, saying the reappraisal plan’s management review process gives the board the power to amend the plan in the event that district seems certain to fail the PVS.
While it can speculate using current and future data, the appraisal district and schools will not know the final outcome of the next PVS on funding until January 2026. This leaves districts unsure about how to plan ahead and leaves a chance it might not receive critical funding halfway through the school year.
“The thing about this, there's no way to recapture or recuperate this funding once it's lost,” Adams said. “We have no way to get it back the next year or at any point in the future, really.”
