Cy-Fair ISD Adopts Lowest Tax Rate in Nearly Four Decades While Weighing Legislative Changes and Funding Realities
The Cypress-Fairbanks Independent School District Board of Trustees has adopted its lowest property tax rate in nearly 40 years. Approved during a special-called meeting on October 28, 2025, the $1.0669 rate per $100 of property valuation reflects a two-cent decrease from last year, and continues the district’s trend of offering meaningful relief to homeowners.
The total rate includes $0.6669 for Maintenance & Operations (M&O) and $0.40 for Interest & Sinking (I&S), the latter of which remains stable thanks to favorable bond refundings and careful long-term financial planning. The district’s M&O rate decreased by two cents from the prior year, in part due to the expiration of temporary “disaster pennies” used in 2024.
CFISD has also maintained a 20% local optional homestead exemption, in addition to the $100,000 state exemption. For an average home valued at $350,000 in the district, this means taxes are assessed on just $180,000 of value, saving many homeowners hundreds of dollars annually. An additional $15,000 exemption is available for residents over 65 or with disabilities.
Two state constitutional amendments—Proposition 13 and Proposition 11—on the November 4, 2025 ballot could expand these exemptions further. If passed, they would raise the state homestead exemption to $140,000 and increase the exemption for seniors and disabled individuals to $60,000, respectively. District staff noted that, for some longtime homeowners over 65, these changes could reduce their school property tax bills to zero.
Mobile Sidebar Ad
Behind the Lower Rate: A Complex Funding Equation
Although the 2025 rate is lower than in years past, CFISD’s financial team emphasized during the meeting that the district is required to use specific language under Texas “truth-in-taxation” laws. Because the adopted rate exceeds the state-calculated “no-new-revenue” rate of $1.00402, it is technically labeled an increase—even though the actual rate has gone down. This distinction is driven by rising home values and adjustments to the taxable base following the expanded exemptions.
District leaders noted that these exemptions come with a tradeoff. Offering tax relief means less local revenue to fund operations. In CFISD’s case, the 20% local homestead exemption alone reduces M&O revenue by an estimated $65 million annually, as the state does not reimburse districts for voluntary exemptions.
In addition, as local property tax revenue grows, state funding typically declines. Under Texas Education Agency (TEA) rules, when a district raises more through local taxes than its entitlement allows, the state reduces its contribution proportionally. This “recapture” mechanism is intended to ensure equitable funding across school districts, but it can limit the financial benefit of increased local values for districts like CFISD.
New Legislation Brings Additional Uncertainty
Changes to school finance policy in the 88th and 89th legislative sessions also play a role in shaping CFISD’s tax strategy. One new law, Senate Bill 1453, redefines how districts calculate the I&S tax rate to ensure they are not collecting more than needed for debt service. While CFISD’s current rate of 40 cents is sufficient and stable, administrators noted the lack of state guidance has added uncertainty to how future debt planning will be handled.
Officials also explained that a number of variables—from ongoing property protests and value appeals to potential state-level tax policy changes—make projecting long-term revenue difficult. The board acknowledged that while property tax compression helps residents, it can put strain on operational funding if state contributions do not increase to match.
Looking Ahead
With the 2025 tax rate now approved and ballots cast in November likely to determine additional exemptions, CFISD enters the next budget cycle facing both relief and risk. Residents will see some short-term savings, but the broader challenge of balancing taxpayer relief with sustained funding for student services remains.
Mobile Sidebar Ad
The board emphasized the importance of clear communication with the community as these financial dynamics evolve, especially when state-required language may not reflect the practical impact of local decisions.
For additional information, residents can visit the CFISD Tax Office website or the Texas Education Agency.
Tiffany Krenek has been on the My Neighborhood News team since August 2021. She is passionate about curating and sharing content that enriches the lives of our readers in a personal, meaningful way. A loving mother and wife, Tiffany and her family live in the West Houston/Cypress region.
