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MISD Board of Trustees Lowers Property Tax Rate by 18.5 Cents

Shane Mauldin|
Thursday, August 31, 2023

McKinney, Texas – At its monthly meeting on August 28, the McKinney ISD Board of Trustees approved a lower tax rate of $1.1275 per $100 of assessed value for the 2023–2024 fiscal year—a decrease of 18.5 cents from the previous year’s rate of $1.3129.

In her presentation to the board, MISD Chief Financial Officer Marlene Harbeson told the trustees that the new tax rate, combined with tax compression from the state, should result in a $683 decrease for the owner of an average family home in McKinney (currently estimated at $567,500).

Texas public school districts are funded almost entirely by local property taxes and state allocations, and the tax rate is comprised of two parts that serve specific purposes: the Maintenance and Operations (M&O) rate and the Interest and Sinking (I&S) rate. The M&O rate is used to fund the day to day operations of a school district, while the I&S is used to repay debt incurred for capital projects.

The approved MISD M&O tax rate for 2023–2024 is $0.7575 per $100 of assessed value, and the I&S rate is $0.37 per $100 of assessed value, resulting in the approved 2023–2024 total tax rate of $1.1275.

More about public school property taxes…

Maintenance and Operations (M&O) Tax Rate
The M&O tax rate funds the ongoing operational expenses of a school district that cover the day-to-day functioning of schools, including salaries and benefits for teachers and staff, utilities, supplies, maintenance of facilities, transportation, and other essential operational costs. The M&O tax rate is subject to the state’s funding formula for public education, which aims to ensure a baseline level of funding for school districts across the state.

Since schools are primarily people-oriented establishments, a significant portion of M&O funds is allocated to covering personnel-related costs. This includes paying teachers, administrative staff, support staff and other employees involved in the daily operations of schools.

Interest and Sinking (I&S) Tax Rate
The I&S tax rate is specifically designated to fund the repayment of debt incurred by the school district for capital projects. These projects typically include items like the construction of new schools (such as Frazier Elementary), renovating or expanding existing facilities (such as the Slaughter Elementary and Scott Johnson Middle School refresh projects) and major infrastructure upgrades.

When a school district needs to undertake such projects, it may issue bonds to borrow money. The funds raised from these bonds are used to finance capital projects, and the I&S tax rate is established to generate the revenue needed for repaying the borrowed funds, including the principal amount and interest.

It’s important to note that voters within the school district often need to approve bond measures, which authorize the district to issue these bonds and incur the associated debt. Bond elections allow the community to decide whether the school district should take on these financial obligations to fund important capital projects. Bonds are sold as they are needed to fund capital projects.

In May 2021, McKinney ISD voters approved a $275 million bond package to provide funding to update and renovate existing campuses and to accommodate growth through campus expansions and a new school. Funds will also provide additional resources for classroom technology and school security, as well as additional student opportunities in academics, fine arts and athletics. For more information about the 2021 Bond Program please visit the School Building Bond and Technology Bond pages.

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If you need additional assistance with the content on this page, please contact MISD Communications Department team member Shane Mauldin by phone at 469-302-4007 or by email here .

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