With budget talks officially starting this week, the Amarillo Independent School District Board of Trustees is weighing possible increases to its property tax rate.
Trustees on Monday explored a 5-cent and 9-cent rate increase as they brace for a potential shortfall in state funding in what is shaping up to be a tight year for lawmakers in Austin.
And school choice legislation, which could use public education dollars to send students to private schools, also has the district concerned.
“If the state doesn’t come through to give us the aid we need, we have to keep our options open,” said Amarillo ISD Chief Financial Officer Pati Buchenau, who supplied trustees with budget projections.
A 5-cent hike would translate to $3.7 million extra tax revenue for the district next year, according to their projections. It would also increase the annual property tax bill for a home with a $100,000 taxable value by $50.
A 9-cent increase brings in $6.7 million and raises the tax bill for a $100,000 home by $90.
Right now, district residents pay $1.189 per $100 of taxable property value, and the district’s current operating budget is $280 million.
The board began building the 2017-18 budget this week and will continue to work on it though the summer. Trustees are expected to pass a budget in June and approve a tax rate to support the spending plan before the end of August.
Board approval of either tax increase automatically triggers a tax ratification election. Amarillo residents will then vote to approve the rate. If the vote fails, then the tax rate rolls back to its current level.
Trustees are also eyeing the tax increases as a way to afford future cost-of-living raises for employees.
“The lion’s share of what we spend is on payroll, and we’ve got to have good teachers and good staff at all levels to deliver a good product for the kids,” board President Jim Austin said.
The district struggles to compete with large metropolitan areas, like Dallas-Fort Worth, when hiring faculty.
Austin, though, seemed most worried about protecting the district from insufficient state funding.
“Without the increase we’ve had in the past, it puts us on a pretty perilous road,” he said.
Trustees are staring at a projected $3.7 million deficit in 2018-19 if they do not raise taxes this year and the state does not change its school finance system or inject new money into public education.
Buchenau anticipated Amarillo ISD won’t get a full picture of its funding situation until June.
Public schools are fighting for more funding this legislative session, especially after the Texas Supreme Court last year said the state’s method of funding schools, while minimally constitutional, was flawed.
But past tax cuts and an economy cooled by low oil prices has hurt state revenue and left lawmakers looking for places to cut.
House Speaker Joe Straus, R-San Antonio, has expressed a desire to dip into the state’s $10 billion “rainy day” savings account to bolster education funding.
“If we pursue a cuts-only approach, there will be no new per-student resources for public education,” Straus recently said in a Dallas Morning News op-ed. “The burden for funding education will shift further toward local property taxes.”
Lt. Gov. Dan Patrick, a Houston Republican who leads the Senate, has pushed back, saying the fund is not for ongoing expenses.