Brittany Kelley
DRIPPING SPRINGS — The Dripping Springs Board of Trustees approved a lower tax rate than previously anticipated at its Monday, Sept. 28, meeting.
This item follows the board approving the 2026-27 budget in June. The initial proposed tax rate, said Chief Financial Officer Randy Rau, was $1.1052. But after receiving the certified property values in July, along with the Texas Education Agency’s (TEA) final maximum compressed rate (MCR) calculation for the district, the final tax rate is lower than expected, said Rau, at $1.0985.
Maintenance and operations (M&O), which fund’s the day-to-day operations of the district, and interest & sinking (I&S) — strictly for debt repayment — make up the two portions of the tax rate.
The M&O rate also has two components: tier one and tier two, said Rau. According to TEA, tier one, or the MCR, is $0.6102 and is adjusted based on changes in the district’s property values. Tier two is labeled enrichment and provides additional funding after tier one.
Currently, DSISD’s tier two rate is $0.1383, bringing the total M&O rate.
“When you look at the I&S rate, it’s a little bit easier to calculate the I&S rate than the M&O. Essentially, you look at the debt payments that you have in a given year, you take into consideration your property tax values that you received and there’s a calculation that you go through that helps set that rate,” explained Rau, adding that state funding is also taken into consideration and whether the district wants to use its fund balance to lessen the rate.
The new proposed tax rate of $1.0985 is both $0.0067 less than the recommended rate from June and the 2025 tax rate.
This means that the average homeowner with a house value of $562,547 would pay an estimated $6,179.58 in taxes for DSISD.
Trustee Rob McClelland stated that there are several positives to this tax rate, including a modest raise for the teachers, support the programs they have, carry the ability to fully fund the district and the fact that it’s lower than last years.
He also noted that the rate is $0.004389 away from the no-new-revenue tax rate, which is good because “the goal of this board has been to get as close to that rate as possible. We want growth to pay for growth.”
The no-new-revenue tax rate for 2026-27 is $1.094111 and is the benchmark to produce the same amount of taxes for the same properties as the year prior, according to the Texas Comptroller.
“Yes, oceans of work went into this and it’s wonderful for taxpayers, but at the end of the day, we didn’t come close to giving teachers the raise that we wanted to, [yet] we’re still sending millions back [to the state] in recapture. So, to everybody listening, the 90th Legislative Session starts in January, but the interim charges are being formed right now,” said trustee Mary Jane Hetrick. “It seems fundamentally unfair, as it has for so many years in this district, that we send millions back to the state. And I will say that any donations to the [Dripping Springs] Ed[ucation] Foundation, the state can’t touch.”
Hetrick then motioned to set the tax rate at $1.0985 per $100 valuation for the upcoming fiscal year. It passed 7-0.
The Dripping Springs Board of Trustees will meet next Oct. 19.
