A North Texas school district is looking at a budget gap, but has to send the state millions of dollars. It has to do with Texas’ Recapture Law, which says districts that are “property rich” have to give their extra tax revenue to the state to be redistributed to others who need it. NBC 5’s Tahera Rahman reports how it will impact Arlington ISD.
The Arlington Independent School District says it must return about $6.5 million to the state after falling into recapture for the third straight year.
It has to do with Texas' recapture law, which is intended to take extra revenue from "property-rich" districts and redistribute it to others who need the money.
"The way we find ourselves in recapture is when our student enrollment goes down and our taxable values go up," explained Darla Moss, the district's chief financial officer.
At a recent board meeting, trustee Melody Fowler said more than 70% of the student body was economically disadvantaged, and the Arlington ISD also needed the money.
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"So, to me, I don’t understand. We have such need in this district, to help our families and help our students. But yet, the state says, ‘No, Arlington makes a lot of money so we’re going to take more and give you less for you to use in your schools. There’s such a disconnect there. I just don’t understand why they can take more money when you can prove that we need the money," Fowler said.
Each district is only entitled to a certain revenue. The state's formula determines the amount each district receives, which considers many factors, including demographics and attendance rates.
Moss said those allotments, though, haven't changed in years, which also explains why they're looking at a budget deficit.
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"That goes back to our basic allotment that the state has not changed since 2019. We've not received any additional funding or that basic allotment has not been increased since 2019," she said.
"So, there's one statute that says recapture is calculated based on a certain formula. We have a formula that says, 'OK, here's your basic allotment.' The two are calculated differently and those calculations have not changed," Moss added.
The board voted to purchase attendance credits, which is one way school districts can pay back their recapture amount.
Moss explained it means the state will reduce the amount of funding they send to the school district by the recapture amount, instead of, for example, the school paying the district in installments, or electing to make payments to partner school districts.
This is the third year that AISD has fallen into recapture. Moss said it may continue unless the state changes its cap or AISD sees an increase in student enrollment.
She said about 300 school districts are in recapture.
“Our city works so hard to bring in new business, and so we can, our economy can thrive, but yet, to me, we’re almost like we’re being punished because we have a lot of money, so they make us give it back,” Fowler said. “It’s a very flawed system.”
