Keller ISD officials met June 10 to discuss the effects of House Bill 3 on the 2019-20 school year budget. The school board is set to adopt the budget in a week at its June 17 meeting.
HB 3 is a major school finance reform bill that seeks to direct billions of additional dollars to public education. It was signed by Gov. Greg Abbott’s on June 11.
Based on revenue gains, KISD would be required by HB 3 to spend $4.6 million on pay raises for teachers, nurses, counselors and librarians–the “Fab Four,” KISD Chief Financial Officer Mark Youngs said.
But KISD is going beyond that to spend $8.4 million for raises for the Fab Four, he said. Most of the $8.4 million will go to those who have been at the district for six years or longer.
The budget also includes $1.7 million for pay raises for all other employees.
Another benefit of HB 3 is the school district would send significantly less money back to the state in recapture payments, Youngs said. Recapture payments are meant to benefit property-poor districts. It is referred to as the “Robin Hood” plan.
KISD began sending the state recapture payments two years ago, paying about $5 million, Youngs said. With HB 3, it would only send $168,386 back.
“House Bill 3 was all about reducing recapture [payments],” he said.
KISD residents will see the effects of the bill reflected on their tax bills.
The school district’s total tax rate will be lowered to $1.4084 per $100 taxable value as a result of HB 3, Youngs said. The current tax rate is $1.51 per $100 taxable value. The decrease will come from a drop in the maintenance and operations tax rate.
To help offset the lowered tax rate, KISD would receive $15 million from the state to help them with the transition, according to budget documents.
But this is not a sustained grant, Youngs said. It will last for five years. This presents a challenge as the school district will soon have to contend with a 2.5% cap on property value growth. This will limit the amount of local revenue KISD can collect for its budget. That cap will be implemented in 2021.
“This year, I’ll tell you early that House Bill 3 has been favorable to Keller ISD,” Youngs said. “What is less favorable is looking forward to 2021.”