The state’s annual audit of local appraisal districts concluded that Texas school property is worth about $47 billion more than county appraisers said.
Comptroller Don Huffines certified the final 2025 School District Property Value Study to the commissioner of education on Aug. 27. The study is the state’s yearly check on whether local appraisal districts are valuing property close to what it actually sells for, and it is not an academic exercise: the values certified Aug. 27 are the ones the state now uses to decide how much money each Texas school district gets from Austin.
The mechanism matters to any homeowner in a district whose appraiser comes up short. State aid is calculated on the assumption that a district collects taxes on all the property within it. If the state concludes a district’s property is worth more than the local roll says, the state funds the district as though it were collecting on the higher figure — and the difference falls to local taxpayers.
The study found a gap. Across the state, local appraisal rolls put total taxable school property at $4.117 trillion. The comptroller’s own estimate came to $4.164 trillion, about $47 billion higher. Single-family homes accounted for $28.4 billion of the difference, with local rolls at $2.999 trillion against the state’s $3.027 trillion. Commercial real property accounted for $21.7 billion, a spread of about 2.8 percent. Those two categories more than account for the statewide gap on their own; in several smaller categories the state’s estimate came in below the local roll, pulling the total back down.
But the value the state actually assigned — the number that goes into the funding formula — came to $4.119 trillion. That is only about $1.49 billion above the local total. Roughly 97 percent of the gap the auditors measured never reached a school district’s bottom line.
The reason is Section 403.302(c) of the Government Code, which instructs the comptroller to use “a margin of error that does not exceed five percent” in deciding whether a district’s local values are valid. When local values fall inside that band, the statute says, “the local value is presumed to represent taxable value for the school district.” The state’s estimate is set aside and the county’s number stands. Only when a district falls outside the band does the state value bite.
That five-point cushion is why a study identifying $47 billion in apparent undervaluation produced a $1.49 billion adjustment, and why most districts pass the audit in a year when appraisers statewide ran measurably behind the market.
Three districts did not finish the process at all. The comptroller’s certification notes that Vega, Adrian and Wildorado independent school districts — all in the Panhandle, all served by the same corner of the state — “are not yet certified.” Their state aid calculations remain unsettled. Districts that disagree with a finding may seek an audit of the comptroller’s numbers under a separate section of the same statute.
The certification satisfied Section 403.302(j), which requires the comptroller to certify final findings to the commissioner of education. That subsection sets no date of its own; the timing comes from a memorandum of understanding among the comptroller, the Legislative Budget Board and the commissioner. This year’s landed Aug. 27, ahead of the fall’s first state payments.
The certification lands in the middle of the season when local governments set the rates those values will be taxed at. Taxing units have been posting their rate calculations since early August, and most of the state’s largest jurisdictions adopt final rates in September. A school district that comes up short in the study cannot adjust for it at that point; the appraisal roll is the appraisal roll, and the funding consequence arrives from Austin regardless of what the local board does with its rate.
The certified values now go to work. Commissioner of Education Mike Morath’s agency will apply them to district-by-district funding as the school year’s payments begin, and the districts that fell outside the five percent band will find out what the audit cost them. Vega, Adrian and Wildorado are still waiting to find out anything at all.