Northwest ISD residents will soon decide between raising the tax rate or allowing the school district to fall into a deeper financial hole.
During their Aug. 13 meeting, Northwest ISD trustees unanimously decided to propose a 3-cent increase in the district’s maintenance-and-operations tax rate to voters on their November ballot. The voter-approved tax rate increase would generate nearly $16 million in additional revenue, covering an expected $15.8 million budget deficit, officials said.
“No one up here really wants to do this,” district board President Steve Sprowls said.
Two rates form the district’s overall property tax:
- The maintenance-and-operations tax rate funds day-to-day operations.
- The debt service rate pays off debt.
The proposed maintenance-and-operations tax rate increase, from $0.6669 to $0.6969, would create a total tax rate of $1.1179 per $100 of assessed property value. Levying that rate would fund essential district operations like competitive staff salaries and student programs, officials said.
“The way I always think of it, we have a $16 million deficit. If this is approved at the polls, we get back to pretty close to $0,” Superintendent Mark Foust said. “We’re almost back to the starting block if our voters approve this.”
And, none of it would be subject to state recapture, officials said. Recapture is a mechanism where districts deemed property-rich by the state must send back a portion of their local tax revenue to the state to support property-poor districts. The measure is often referred to as the Robin Hood law.
During the 2023-24 school year, Northwest ISD sent $19.5 million of tax revenue to the state under recapture. If this rate increase is approved, all the revenue brought from it would stay in the district.
“Our hand has been forced,” Sprowls said. “We can only keep running deficit budgets for so long before we need to start making some drastic changes.”
The financial strain on Northwest ISD, which serves 30,100 students across Haslet, Justin and parts of north Fort Worth, has been compounded by stagnant state funding since 2019, officials said. That was the last time the state increased its funding allotment per student. For each student, the state provides what is known as a basic allotment of $6,160 annually.
Northwest ISD isn’t alone in its economic challenges. School districts across Tarrant County face rising operational costs due to inflation, and nearby districts like Fort Worth ISD and Crowley ISD also adopted or expect to adopt deficit budgets for the 2024-25 school year.
Superintendents and school board trustees across North Texas have been outspoken in their criticism of Texas legislators, who did not approve increased public school funding in 2023 amid contentious debate over a school voucher program.
“Texas is sitting on a surplus of funds, and because (legislators) let the politics of private school vouchers get involved in the mix with public school funding, funding never got passed,” Sprowls said during a May meeting.
Further compounding the issue are recent policy changes by the Tarrant Appraisal District, which Northwest ISD officials have said could further reduce school funding. On Aug. 9, the appraisal district voted to move to two-year residential reappraisals and established a 5% threshold for raising property values, potentially stagnating growth in districts’ property tax revenues.
Now, high-growth districts like Northwest ISD will likely face trouble in funding projects under voter-approved bonds, officials said. Northwest ISD voters approved a $2 billion bond in 2023.
In July, the district adopted its $15.8 million deficit that currently must be covered by the district’s reserve fund. Covering the deficit through reserves will decrease the expected fund balance to about $92 million, representing 27.4% of the district’s budget.
The state recommends school districts maintain at least three months of operating expenses in their fund balances, or 25% of their budgets.
This is now the second year in a row in which Northwest ISD will operate within a deficit budget, with the board adopting a budget with a $2.9 million deficit in 2023. Sprowls has emphasized to voters that, without a tax increase, the district faces harsh choices like increasing class sizes or cutting educational programs.
Even with a potential 3-cent increase, the tax rate would stay the lowest it’s been 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 appraised value of $552,605, according to the district. However, only $420,208 of the value was used for taxes, resulting in an average property tax bill to Northwest ISD residents of $4,571.44.
In 2024, the average home in Northwest ISD had a market value of $527,881, according to the district, with a net taxable value of $393,911. If voters approve the proposed tax rate increase, the new average property tax bill would be $4,403.53.
This would represent a decrease of $167.91 from last year’s tax bill, as property values throughout the district fell on average.
But, in applying the proposed tax rate to last year’s appraisal numbers for reference, the average property tax bill to Northwest ISD would have been $4,697.50 with the approved tax bump — $126 higher than what the average homeowner paid in 2023.
Voters in the district will ultimately have the final say, as early voting starts Oct. 21. Election Day is Nov. 5.
Matthew Sgroi is an education reporter for the Fort Worth Report. Contact him at matthew.sgroi@fortworthreport.org 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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