Keller ISD: The Bellwether of School Finance

by Dr. Jerry R. Burkett
Originally Published on: Jun 18, 2011

JUNE 19, 2011 UPDATE:
Keller voters elected to not raise local school taxes in their area in the TRE held on Saturday, June 18. The tax rate would have been an average of $260 per year to the current property tax rate. In anticipation of the TRE not passing the voters, the Keller ISD has proposed a list of cuts that are now likely to occur due to the shortfall the district will experience. You can view a list of these cuts here:

This shortfall was caused by the structural tax deficit that was imposed in 2006 by the Texas state legislature.  Since a majority of school funds come from state contributions and not local contributions, Keller was simply trying to raise local revenue to make up for the cuts the state was imposing. Please understand, the issue for school funding is rooted in this structural tax deficit and not in the recession on in the necessity to “tighten our belts”. If the tax deficit was addressed, Keller would not be in this position.  As such, Keller will experience a $16 million shortfall each year till the next biennial legislature is in session.  That amounts in just under $31 million over the next two years. Keller ISD is in an area that not only includes Keller but also North Fort Worth, Haslet, and Watauga; all cities that have experienced major housing growth in the last 5 years.

This week I was able to present at a conference in Austin for campus principals on team building.  At the end of the presentation, a principal from San Antonio walked up to me and asked me what people were saying about the school funding crisis in North Texas.  I told her that many of our school districts are facing the same issues as districts in Houston, Austin, and San Antonio but that each were working through the crisis in their own way based on their own budgets and student needs. She said that this was the problem for school districts, because each district has to “do their own thing”, it makes the issues that much more complicated and hard to explain. She went on to say that she has spent a lot of time trying to explain to parents, teachers, and community members that the solutions to the school funding crisis are not as simple as cutting budgets, layoffs, and furloughs; it’s really all about the funding from the state and that is the hardest to explain.

And, as we struggle to understand school finance, districts are working to solve the crisis locally.  One way they will do this will be through Tax Rate Elections (TRE), one of which will occur today for Keller ISD.

Keller Independent School District who, after already conducting teacher layoffs and budget cuts, still needs to increase their funding to manage the day-to-day operations of their district.  The district called for the TRE nearly 6 weeks ago and it has been met with both support and opposition.

However, it is the opposition that bothers me the most.  It’s fine if you do not want your taxes raised, that is certainly your perogative. However, for those who openly oppose the TRE, seem to do so without a true understanding of the financial need that Keller ISD is plainly stating to the public.

Bottom Line:  $31 million shortfall. If this money is not generated through the TRE, there will be more layoffs, more program cuts, and cuts to bus service.

Yes, the district may not be able to afford to bus their students to and from school.

Keller ISD Growth: Their Achilles Heel

Keller, Texas was once a small farming community nestled to the north of Fort Worth, tucked away as a stop in the road for people travelling to Denton.  Over time, this small town exploded into a bustling suburban community. The 1980 Census calculated Keller’s population at 4,555; today, about 40,000 residents call Keller home. Keller ISD built 10 new schools to accommodate growth since 2002 and needed 3 separate bond elections to meet building demands.  Keller adds approximately 2,000 residents a year into an area that Money magazine rated as one of the top 10 “Best Places to Live” in the United States for 2009.

Despite the tremendous growth, it serves as a financial detriment in the eyes of the state of Texas. When the school funding formulas were recalculated in the tax restructure overhaul in 2006, Keller was given a per student target rate of $5,039 because it was assumed that Keller could generate enough local revenue to make up the difference to educate their students.  Plus, at that time, Keller ISD had fewer bilingual, economically disadvantaged, and special education students, which are weighted higher by the state, and districts receive more funds to educate those types of students.

However, Keller has obviously continued to grow since 2006 and in that growth has not only received more students to educate but they have also received more students with higher needs, such as special education and English as a Second Language students, which require different personnel, equipment, etc…, to meet these students needs.

In addition, an unexpected housing market crash and foreclosure crisis occurred which resulted in lost tax revenue for the district. So, as the state assumed that Keller could generate revenue from their local tax dollars to make up the funding differences, the foreclosure bust only created a larger gap in the budget making it more difficult to payoff bond debt and generate budget revenue.

Now, in 2011, Keller is still growing but is capped in their ability to build schools and much less able to staff those schools with a $31 million shortfall. To simply operate at their current level, with current student population and staffing, Keller ISD needs to generate more revenue as the state is going to cut their funds.  These funds will need to come from the local tax base, hence the need for the TRE.

Keller has their TRE on the ballot today. We will watch with curiosity to see if those who are in favor of “fiscal responsibility” (as they have been openly opposed to the TRE with advertisements on the roadside) will win their cause

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