The Leander ISD school board voted Aug. 28 to keep its property tax rate level, swayed in part by rising property values and worries about increased strain on tax-fatigued landowners. However, the stabilized rate has raised concern about the district's ability to fund future growth. LISD's property tax rate has remained at $1.51187 per $100 of valuation since fiscal year 2012–13. A total of $1.04 per $100 of valuation for maintenance and operations and $0.47187 per $100 of valuation for debt repayment supports the 2014–15 budget, which went into effect Sept. 1. The average LISD residence valued at $271,330 in 2014 will owe the district $4,102.16 per year, or $341.85 per month. During budget and tax rate discussion, board members debated whether to raise the debt service portion of the tax rate to 50 cents, the maximum allowed by the state without penalties. Trustee Will Streit and Vice President Aaron Johnson argued that with a higher total property tax rate of $1.54 per $100 of valuation, LISD could levy an additional $4.4 million to pay off debt ahead of schedule and create more capacity to build in the future. The board ultimately voted 5-2 in favor of the stable tax rate, with Johnson and Streit dissenting. "We are working to manage our debt, but the question is are we doing it enough fast enough so we can continue growing and significantly increase our capacity? Or are we are keeping it low and putting ourselves in a corner?" Johnson said. Increasing values Board members including President Pam Waggoner said they were concerned residents are already feeling a larger tax burden this year because of rising property values in Williamson and Travis counties. According to information from the counties' central appraisal districts, LISD's total property value increased 14.92 percent in 2014—from about $14.5 billion to $16.7 billion—compared with 2013. Even with an unchanged LISD tax rate, many homeowners' 2014 tax bills increased hundreds or even thousands of dollars, Waggoner said. Factoring a 10 percent cap on property tax hikes, which most existing homeowners have through a homestead exemption, the average residence valued at $246,742 in 2013 will see a $339.13 annual LISD tax increase. Higher values also lead to bigger tax bills from other taxing entities, Waggoner said. "Maybe we are not aggressively paying down debt as fast as we can, but we are meeting our debt repayment schedule while still allowing families to afford to live in our district and go to our schools," she said. "I fear if we raise it, the community won't want to work with us in the future. There's a lot of building potential, and if we don't [over] tax them now, it will be easier to present a bond package down the road." Ability to tax and build LISD voters in 2007 approved the district issuing nearly $500 million in bonds for construction, technology and infrastructure. In July the board directed staff to sell the last remaining $22 million in bonds for the completion of Tom Glenn High School by fall 2016 and future construction of Elementary School No. 26. The most recent demographer's report from fall 2013 shows LISD enrollment growth will create a need for another middle school by 2018 and two elementary schools in 2019. With no funding to build future schools, the district may be faced with proposing another bond election or finding alternatives to construction such as using shared classrooms or portables, implementing year-round classes or splitting students into morning and evening cohorts. Ellen Skoviera, assistant superintendent for business and operations, said the school board can tax whatever rate necessary to meet the repayment schedule of the bonds authorized in 2007. However the state penalizes districts if they exceed a debt repayment tax rate of more than 50 cents per $100 of valuation. "If for some reason it had to be [more than 50 cents], the state then says they are going to make [districts] take that out of [their] general fund," she said. "The other thing they do is the next time you go to sell bonds, it's a 45 cent test. So it doesn't affect you until you go back to market and try to get approval for more sales." Though trustees opt to refinance when possible, Streit said new debt added to the district's repayment schedule could send LISD over the 50 cents per $100 of valuation limit. "I can look and see [LISD's anticipated debt tax rate at] 53 cents [per $100 of valuation] in two years, and the only way that doesn't happen is if we don't build," Streit said. Bigger budget The tax rate supports a budget including $258.5 million for LISD operations and an additional $74 million for debt service; the district's $13 million food service budget is self-sustaining. The general fund, or operating budget, is 4.5 percent more than the 2013–14 budget and reflects funding for 1,382 more students. To keep pace with the 3.96 percent enrollment increase, staffers added a net gain of about 67 positions in the 2014–15 budget, including classroom teachers, bus drivers and special education instructional assistants. Other changes compared with the previous year's budget include $1.8 million in capital outlay requests, the consolidation of elementary music and theater arts programs, and salary increases for all staff. An LISD-commissioned demographer is scheduled to present the school board with the most up-to-date enrollment projections on Oct. 9, Skoviera said, at which point the district can further consider options for managing future growth.