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Denton ISD staff warn tax‑rate choices and new exemptions leave district with a $15.2M structural gap
Summary
Denton ISD officials told trustees that state increases to homestead and senior exemptions compressed certified property values, leaving only modest growth (about 1.76%) and a projected $15.2 million deficit despite roughly $19.2 million in new state funding designated for teacher raises.
Denton ISD trustees heard a budget briefing on July 29 that tied recent state exemptions and new funding to a still‑sizeable district shortfall.
Jennifer (district budget staff) walked the board through the certified values the district received July 15 and explained how two legislative changes — an increase in the homestead exemption from $100,000 to $140,000 and an increase in the 65+/disabled exemption from $10,000 to $60,000 — materially lowered local taxable values. "We actually grew less than 2% at 1.76%," she told trustees, comparing the current certified values with the district’s prior growth assumptions.
She said Denton ISD had modeled $19.2 million in new funding under HB2, and that roughly $10.6 million of those dollars will be used to fund teacher pay raises (the state will cover those raises). "What they're not gonna pay for is the benefit costs that are associated with giving those raises to teachers and support staff," she added, noting the district must fund the related benefits.
After accounting for compensation obligations and previously adopted raises, staff said the district would have about $4.3 million in discretionary funding left but still face a structural deficit around $15.2 million for the fiscal year. Staff emphasized available local options are limited: increasing revenue would require either growing student enrollment (ADA) or asking voters to approve additional Tier‑2 M&O pennies in an election.
The presentation also reviewed the district’s historic tax‑rate compression and peer comparisons, noted Denton ISD is close to the bottom of its peer group on Tier‑2 levies, and walked trustees through the district’s recurring choice to use average daily attendance credits should the district be designated for recapture under chapter 49 (formerly known as Robin Hood). Staff said there was no immediate action required tonight but that a new business item related to average daily attendance credits would appear at the next meeting.
Why it matters: the briefing framed how recent state policy choices and earmarked state funding change the district’s budget calculus — the state’s pay raises reduce the district’s direct compensation burden but not related benefits or other local obligations. Trustees asked staff for follow‑up modeling if a November election to increase Tier‑2 pennies were considered.
What’s next: staff said they will return with additional scenarios and noted the board will consider a new business item in early August to select the district’s option should TEA estimate recapture obligations.
