Frisco ISD board of trustees will hold a public hearing May 31 to discuss the potential of increasing the district's property tax rate by 13 cents to increase the district's operations budget.

District leaders are proposing raising the maintenance and operations tax rate to $1.17, up from $1.04 now. The interest and sinking rate, which is the rate for debt service, will remain the same at 42 cents.

The discussion to increase the tax rate, which requires voter approval, has been a topic for the district for the past few months as district leaders prepare the 2016-17 budget.

The discussion to raise the tax rate was triggered by the decline in state funding over the last few years. In 2006, the Legislature compressed rates to enact property tax relief. Because FISD's M&O rate was $1.32 instead of the state's maximum of $1.50, the district had to rely on funding from the Additional State Aid for Tax Reduction fund to ensure it could continue to meet its target revenue. The ASATR fund is set to expire in 2017, and FISD is expected to lose $30 million with its expiration.

The state began reducing the ASATR funding in 2011. By the 2017-18 school year, FISD will have lost a projected total of $125 million. To make up for the loss, the district had lower than average raises, lower than average teacher salaries, higher class sizes and lean central administrative and support staff.

For the proposed 2016-17 budget, FISD is considering $471 million for the general fund, a $42 million increase from the current year to help address the the district's fast student growth.

Because the district experiences increased growth every year, it can expect a per-student share of state funding, but it will not be enough to keep up with the needs of the growing student population in the next couple of years at the current tax rate, said FISD CFO Kimberley Pickens.

"We've reached that stage in the life cycle of our district where our growth really necessitates a level of funding that's greater than what we have," Pickens told trustees this week.

Pickens said because FISD has been fiscally responsible, the district has 13 cents of taxing authority available to them with voter approval.

FISD is the only school district in Collin County that has not increased its M&O tax rate to $1.17.

Pickens said the revenue generated by the tax increase would help FISD catch up with the growth.