Northeast Tarrant

'Tax rate swap and drop' could go to voters at urging of Keller school officials

Keller Superintendent Rick Westfall talks about plans for a tax rate election to parents and employees at a Feb. 22 "Brown Bag Forum" at North Riverside Elementary School.
Keller Superintendent Rick Westfall talks about plans for a tax rate election to parents and employees at a Feb. 22 "Brown Bag Forum" at North Riverside Elementary School.

Keller school district officials plan to go to voters later this year to request a change in the tax rate, with the goal of raising an additional $19 million a year while lowering the overall rate.

"We're at about an 'F' in revenue per student," Keller Superintendent Rick Westfall said. "We're asking to get to a 'D.'"

At his monthly brown-bag forum Feb. 22 at North Riverside Elementary School, Westfall told a group of parents and employees that Keller schools are in the bottom quartile in the state in per-student funding and in the bottom 10 percent for Tarrant County area districts.

One efficient way to boost revenue and not raise taxes, Westfall said, is through a "tax rate swap and drop."

School district tax rates have two components: a rate for daily operations (M&O) and a rate for bond debt. The total tax rate for Keller schools is $1.52, with $1.04 for M&O and 48 cents for bond debt, also called the interest and sinking fund (I&S).

The district's proposal aims to raise the M&O rate by 13 cents to $1.17 and drop the rate for bond debt to 34 cents. Because of the growth in property values, bond debt can be paid off at the lower rate. The total rate then would be $1.51.

Because the Keller school district is at the state cap for daily operations, the only way to raise that M&O tax rate is through a tax ratification election, or TRE. The last time Keller district officials called a TRE, voters rejected the plan.

That was in 2011, after state legislators cut $4 billion from public education and the economy was still mired in a recession.

There's a big difference in this plan, Westfall said. Last time, taxpayers were asked to cover the increase. This time, officials propose to lower the total tax rate by 1 cent by reducing the levy on the rate for bond debt to offset an increase in the rate for maintenance and operations.

That switch would result in $19 million more a year for Keller schools.

The additional revenue would cover employee raises, student programs, improved security and other rising costs, Westfall said.

While taxpayers pay more when their property values rise, the state doesn't allow school districts to retain that boost on the daily operations side. Instead, the amount of funding they receive from the state goes down, he said.

"You'd think, 'My taxes have gone up, so I don't understand why the schools don't have enough money,'" Westfall said. "The state reduces the amount of revenue they give. They're leaning on higher property values."

A few years ago, Keller schools received 55 percent of their funding for operations from local taxes and 45 percent from the state. This year, 62 percent comes from local taxes and 38 percent from the state.

Districts do benefit in paying off bond debt when property values go up, which makes the switch possible, he said.

With continued conservative growth in values, Keller district officials calculate they can still cover building needs with the lower debt rate.

"If the economy and values tank, we have bigger problems," Westfall said.

Officials are considering a September time frame for an election to change the tax rate.

Parent Jennifer McKeon said she thinks the plan would be a good way to benefit schools without raising the overall tax rate.

Mom Tina Coppinger agreed: "They can use the resources to pay for whatever is needed."