Klein ISD voters could be asked to approve a 9-cent tax rate increase in June. At its meeting Tuesday night the KISD board of trustees heard a budget presentation and recommendation for the district to hold an election in June to increase its tax rate to make up for budget shortfalls. The district's tax rate consists of two parts. The larger part funds the district's maintenance and operations, and this rate has been $1.04 per $100 assessment since 2006. In his presentation last night, KISD Chief Financial Officer Dan Schaefer recommended increasing the maintenance and operations rate by 9 cents to $1.13 per $100 assessment. The smaller part of the district's tax rate is the interest and sinking rate, which is currently 39 cents per $100 assessment. Funds generated by this portion of the tax rate can only be used to make payments on bonds that fund construction and other items. The interest and sinking rate will comprise a portion of the tax rate increase, but the district will not know the amount until it receives the appraisals for homes values from the Harris County Appraisal District by the end of April, Schaefer said. State law mandates that school districts can not increase their tax rates above $1.04 without voter approval. The board will vote on wether or not to hold the election at its meeting on May 14. If the board approves the election, it will take place on June 16. The voter registration deadline will be May 17. Election locations have not yet been determined. In his presentation, Schaefer said the tax rate increase is necessary for the district to keep pace with its growth, offset a lack of state funding and fund new security items. Over the past few years KISD used its excess fund balance—which functions as KISD's savings account—to accommodate growth, but this is no longer an option, Schaefer said. The district needs to maintain its fund balance above 25 percent of its total expenditures because that is enough to cover payroll for about two and a half months, which is the amount the Texas Education Agency recommends reserving, he said. The percentage of the district's expenditures the fund balance represents has steadily decreased over the past few years as it has used the funds to operate and maintain new schools. In 2015-16 the percentage was 36 percent and in 2017-18 it is 26 percent, according to district documents.

District growth

The district's student population increased from 42,742 in 2007 to 53,010 in 2017, and it is projected to peak in about 15 years at 65,000 students, according to the district. Officials said in order to accommodate this growth the district opens new schools, funded by bond referendums. However, the staffing and daily operations of the school is funded by KISD's maintenance and operations budget. For example, the district recently opened several schools funded by the $498.1 million bond package approved by voters in 2015. Klein Cain High School opened in 2017, which required an additional $7.5 million in KISD's budget for staffing and operations. Hofius Intermediate School will open in 2018 and will add an additional $3.2 million to the district's budget, according to district documents. As property values increased, the state's share of the district's total revenue has also decreased, according to district documents. For example, in 2013-14 a total of 57.84 percent of the district's revenue came from the state, while 41.06 percent came from local sources—primarily property taxes. However, in 2017-18 a total of 48.01 percent of the district's revenue came from the state, while 50.70 percent came from local sources, according to district documents. While a higher tax rate would increase local funding for the district, it would also require the state to allocate more money to KISD, officials said. Schaefer said when a school district increases its tax rate, the state also increases how much funding it provides. For example, in the current school year the state provides KISD with $3,441 per student. Under the tax rate discussed Tuesday night, the state would provide the district with $3,634 per student in 2018-19. Schaefer said regardless of whether the tax election takes place and the new rate is approved, the district will have to trim money from its budget. If the new tax rate is implemented, the district will need to trim $8 million from its budget over the next three years. However, if the new tax rate is not approved, the district will need to trim $30.2 million from its budget, he said. Editor's note: The story has been updated to clarify that the tax increase proposed is not for maintenance of the fund balance, but is intended to allow the district to keep pace with growth, offset the lack of increase in state aid and to fund security items.