TIF Funds

Tax Increment Fund (TIF) and Carroll ISD Facilities in Southlake

In Texas, cities can create a Tax Increment Reinvestment Zone (TIRZ) to encourage development and economic growth. A TIRZ captures future property tax growth in a designated area, called the tax increment, and places it in a Tax Increment Fund (TIF) for public improvements such as roads, utilities, sidewalks, and other infrastructure. This approach leverages future growth without raising tax rates and is designed to attract new investment. The City of Southlake established a TIRZ in the late 1990s to support redevelopment in a specific area. Participating taxing entities, including Carroll Independent School District, contribute a portion of incremental property taxes from the zone to the TIF. Four Carroll ISD facilities are included in the TIRZ: Dawson Middle School, Eubanks Intermediate School, Old Union Elementary School, and Dragon Stadium. TIF dollars have been used both for public infrastructure in the zone and for projects that directly benefit the school district.

In 2025, the City of Southlake allocated $1.5 million per year for 2025, 2026, and 2027. Carroll ISD used 2025 funds and then drew down a portion of 2026 funds to complete roof projects at Old Union, Dawson, and Eubanks, resulting in a total expenditure of $2.241 million in 2025. These funds allow Carroll ISD to address major facility needs while leveraging resources primarily intended for economic development. Participating in the TIRZ means Carroll ISD temporarily forgoes a portion of property tax revenue that would otherwise go directly to the state in recapture. Texas law provides state aid to compensate for these contributions, so the district is not permanently impacted. Once the TIRZ expires and development matures, all taxing entities, including the school district, receive full tax revenues from the area. The TIRZ represents a shared investment between the City of Southlake and Carroll ISD, where the city invests in infrastructure to promote growth, and the school district benefits from both improved facilities and an expanded future tax base.