Reduced funds from the state leave Denton ISD in a predicted $15 million budget shortage, despite additional funding.
Texas Property Tax Relief Bills Impact Denton ISD Budget
The Texas Legislature recently passed two bills, Senate Bill 4 and Senate Bill 23, aimed at increasing property tax breaks for Texans. These bills, along with increased homestead exemptions, primarily reduce school property tax revenues for school districts in Texas, including Denton ISD.
The property tax relief created by SB 4 and SB 23 lowers local revenue from property taxes, which typically form a significant portion of a district’s funding. Increased homestead exemptions similarly reduce taxable property values. This structural shift forces districts like Denton ISD to rely more on state funding mechanisms and can contribute to budgetary pressures, especially if state compensation lags behind revenue losses.
In the specific case of Denton ISD, the budget for 2025-26 includes a deficit of $19.5 million. While direct search results do not provide detailed budget impact figures, the effects can be inferred based on broader statewide impacts.
The state will provide $19.2 million in House Bill 2 new funding to Denton ISD to offset some losses. However, this may not fully replace local revenue, creating budget gaps. Additionally, the costs of providing benefits put the budget deficit at $15 million.
To compensate for the revenue losses, Denton ISD is considering increasing enrollment or having a voter-approved tax ratification election to raise funds. The homestead exemptions actually cut the growth in property values to 1.76% for Denton ISD.
The compensation plan for teacher and support staff raises in Denton ISD will cost $10.6 million. Early projections show an increase of 2 cents in the tax rate could lower the average property owner’s school district taxes. Lt. Gov. Dan Patrick called the bills a win for aging Texans, stating that school property taxes would be effectively eliminated for the average homeowner over age 65 with the combined $200,000 homestead exemption.
Denton ISD's executive budget director, Jennifer Stewart, stated that they had prepared for the coming year's budget based on what they’ve been calling "old law," because the team knew lawmakers were considering property tax relief again. School board President Barbara Burns stated that the public believes the "teacher raises" funds will be distributed to all staff.
When combined, Senate Bills 4 and 23 could exempt up to $200,000 of a homestead’s property valuation from taxes for seniors and disabled Texans. The number of properties that were granted a homestead exemption in 2025 increased by 1,214 in Denton ISD.
It's important to note that while House Bill 2 brings an $8.4 billion increase in state funding aimed at improving educator pay and fixed costs, some stakeholders view funding changes as insufficient compared to rising costs and voucher programs like Senate Bill 2, which divert public funds to private education options and may reduce public school enrollments and budgets indirectly.
In conclusion, the legislative changes collectively represent a significant shift of fiscal responsibility away from local property taxpayers toward the state, affecting Denton ISD’s budget flexibility and funding security. Denton ISD must navigate a more complex financial environment with a growing reliance on state funding increases to balance budget shortfalls caused by property tax relief policies.
- The news regarding Texas Property Tax Relief Bills has an impact on Denton ISD's budget, as these bills, along with increased homestead exemptions, significantly reduce the district's property tax revenues.
- As a result of the property tax relief created by SB 4 and SB 23, Denton ISD's budget for 2025-26 includes a deficit of $19.5 million, forcing the district to rely more on state funding mechanisms and education-and-self-development resources for compensation.
- Business strategies such as increasing enrollment or holding a voter-approved tax ratification election are being considered by Denton ISD to offset the revenue losses caused by the property tax relief and the homestead exemptions, which have cut the growth in property values for the district.
