Residents of Northwest ISD will soon have to decide whether to raise the tax rate or allow the school district to fall even deeper into a financial hole.

During their Aug. 13 meeting, Northwest ISD trustees unanimously voted to put a 3-cent increase in the district’s maintenance and operations tax rate before voters on their November ballot. The voter-approved tax increase would generate nearly $16 million in additional revenue and cover an expected $15.8 million budget deficit, officials said.

“Nobody up here really wants to do that,” said county board chairman Steve Sprowls.

Two tax rates make up the total property tax of the district:

• The maintenance and operation tax rate is used to finance daily operations.
• The debt service rate is used to repay debt.

The proposed increase in the maintenance and operations tax rate from $0.6669 to $0.6969 would result in a total tax rate of $1.1179 per $100 of assessed property value. Collecting that rate would fund important district operations such as competitive employee salaries and student programs, officials said.

“I keep thinking we have a $16 million deficit. If that passes at the ballot box, we’ll be back to almost $0,” said Superintendent Mark Foust. “If our voters approve that, we’ll be almost back to the starting block.”

And none of it would be subject to state clawback, officials said. Clawback is a mechanism that requires counties deemed by the state to be wealth-rich to return a portion of their local tax revenue to the state to support wealth-poor counties. The measure is often referred to as the Robin Hood Law.

In the 2023-24 school year, Northwest ISD transferred $19.5 million in tax revenue to the state. If this tax increase is approved, all resulting revenue will stay in the district.

“We are forced to act,” Sprowls said. “We can only sustain our budget deficits for so long before we have to start making drastic changes.”

The financial strain on Northwest ISD, which serves 30,100 students in Haslet, Justin and parts of north Fort Worth, has been exacerbated by stagnant state funding since 2019, officials said. That was the last time the state increased its per-pupil funding allotment. For each student, the state provides what is known as a base allotment of $6,160 per year.

Northwest ISD is not alone in its economic challenges. School districts across Tarrant County are facing rising operating costs due to inflation, and nearby districts like Fort Worth ISD and Crowley ISD have also passed or plan to pass deficit budgets for the 2024-25 school year.

School superintendents and school board members across North Texas have voiced their criticism of Texas lawmakers who have not approved an increase in funding for public schools in 2023 amid a heated debate over an education voucher program.

“Texas is sitting on a surplus of funds, and because (lawmakers) allowed the private school voucher policy to be rolled into public school funding, the funds were never approved,” Sprowls said during a May meeting.

The problem is further compounded by recent policy changes from the Tarrant Appraisal District, which Northwest ISD officials say could further reduce school funding. On Aug. 9, the appraisal district voted to switch to biennial reassessments of residential properties and set a 5% threshold for increases in property values, potentially leading to stagnant growth in the district’s property tax revenue.

Now, high-growth districts like Northwest ISD will likely struggle to finance projects under bonds approved by voters, officials said. Northwest ISD voters approved a $2 billion bond in 2023.

In July, the district announced its $15.8 million deficit, which currently must be covered by the district’s reserve fund. Covering the deficit with reserves will reduce the expected fund balance to approximately $92 million, or 27.4% of the district’s budget.

The state recommends that school districts maintain at least three months of operating expenses or 25% of their budget in their funds.

This is now the second year in a row that Northwest ISD has had to operate on a deficit budget, with the board passing a $2.9 million deficit budget for 2023. Sprowls stressed to voters that without a tax increase, the district faces tough decisions such as increasing class sizes or cutting educational programs.

Even with a possible three-cent increase, the tax rate would remain at its lowest level since at least 1993, Jonathan Pastusek, the district’s chief financial officer, told trustees during the Aug. 13 meeting.

In 2023, the average home in Northwest ISD had an assessed value of $552,605, according to the district. However, only $420,208 of that value was used for taxes, resulting in an average property tax bill for Northwest ISD residents of $4,571.44.

In 2024, the average home in Northwest ISD had a market value of $527,881 and a net taxable value of $393,911, according to the district. If voters approve the proposed tax increase, the new average property tax bill would be $4,403.53.

This would represent a reduction of $167.91 from the previous year’s tax burden, as property values ​​have declined on average across the district.

But applying the proposed tax rate to last year’s assessed figures as a reference, the average property tax bill for Northwest ISD with the approved tax increase would have been $4,697.50 – $126 more than what the average homeowner paid in 2023.

Ultimately, the district’s voters have the final say, as early voting begins on October 21. Election Day is November 5.

Matthew Sgroi is an education reporter for the Fort Worth Report. Reach him at [email protected] or @MatthewSgroi1. At The Fort Worth Report, news decisions are made independently of our board members and financial supporters. Read more about our editorial independence policy Here.

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