2023-2024 FY Tax Rate and MCR Template Tool

 

Overall Information

 

Due to timing of legislative decisions (specifically, Senate Bill (SB) 2, 88th Texas Legislature, Second Called Session), the official Local Property Value Survey (LPVS) application will calculate MCRs under Regular session (88^th R) law only. The information below also assumes SB 2 (88^th SS #2) will be signed by the Governor, enacted, and then approved by voters in November.  If voters approve the increased homestead exemption, the state certified "T2" values will reflect the $100,000 exemption and will be incorporated into the Summary of Finances (SOF) reports in February 2024.

 

TY 2023 State MCR: 0.8941 × (1.025 ÷ 1.0443) - 0.0825 = $0.7950 - $0.1070 = $0.6880

 

If SB 2 (88^th SS #2) is signed by the Governor and is enacted, Tier One MCRs for TY 2023 will range from $0.6880 (max) to $0.6192 (90% floor). As a result, the maximum M&O rate for the 2023 tax year would be $0.8580 ($0.6880 + $0.17).

 

Local MCR determinations for tax year 2023 will be calculated in 2 steps

 

Initially, the LPVS will calculate MCRs under regular session law only (88^th R). However, TEA will then make additional calculations prior to publishing the Preliminary MCRs to incorporate the additional tax reduction per SB 2 (88^th SS #2). These additional calculations from SB 2 (88^th SS #2) will not require an action by the ISD (unless the ISD is appealing the MCR), as TEA will automatically calculate them as noted below:

 

1. Districts submit LVPS using HB 1 (88^th R) law prior to August 1.

 

2. After initial LPVS survey submission, TEA will calculate and make available the preliminary maximum compressed tier one tax rates to each school district on or before August 5.

• If TEA does not receive an appeal of a preliminary MCR, the preliminary MCR as determined by TEA automatically becomes a final MCR.
• If TEA receives an appeal of a preliminary MCR, TEA will issue a final determination to the school district no later than August 31.

 

LPVS Submission Process

 

The LPVS for the 2023-2024 school year opens for data submission today, Tuesday, July 18, 2023, and will close at midnight on Tuesday, August 1, 2023. Please ensure that your district completes and submits the LPVS using the online FSP System by Tuesday, August 1, 2023.

 

For purposes of the LPVS submission, districts should enter local district taxable property values (and calculated estimates of district comptroller property values, or “T2” values) for TY 2023 reflecting the $40,000 state homestead exemption (HSE) under current HB 1 (88^th R) law.

 

As a note, the MCR that will be shown in the local property value survey in TEAL will not correctly reflect your district’s final MCR, as determined under Senate Bill 2 (88^th SS #2), since TEA will adjust the LPVS prior to issuing preliminary MCRs. Districts that do not submit their LPVS will receive the lesser of the prior year MCR, or the assumed State compression rate of $0.6880 as their MCR.

 

Tax Rate Adoption

Districts should wait to proceed with tax rate adoption until the TEA publishes preliminary MCRs on or before August 5^th. If an appeal is requested, then districts should wait to receive from TEA a final MCR determination before proceeding with tax rate adoption.

As a reminder, a lower MCR does not impact your district’s total FSP entitlement, but rather shifts funding between the state and local share, as Tier One tax compression does not impact the overall level of funding a district is entitled to. Rather, tax compression only impacts the balance of the state and local share of a school district’s total Tier One entitlement.

MCR Template from TEA

For additional assistance, TEA has posted a new Tax Rate and MCR Template on their TEA State Funding Webpage, under the District & Charter Planning Tools subheading. Please note that the purpose of this template is limited to assistance only and does not anticipate any tax rate increase that the district may be considering, nor is it an official submission of the LPVS. Legal responsibility to adopt a tax rate in accordance with the law remains with the district, which should consult with its own legal counsel.

For more information on submitting the LPVS through the FSP System, including information on applying for specific roles in the system, please see the TEA FSP System web page. For help with accessing the FSP system or submitting the 2023–2024 LPVS, please contact Namrata Parikh by phone at (512) 463-6220 or email taxprograms@tea.texas.gov.