Public school taxes involve two figures, which divide the school district budget into two “buckets.” The first bucket is the Maintenance and Operations budget (M&O), also known as General Fund, which is used for daily costs and recurring or consumable expenditures such as teacher and staff salaries, supplies, utilities, etc. Approximately 83 percent of the district’s M&O budget goes to personnel salaries and related costs. The second bucket is the Interest and Sinking budget (I&S), also known as Debt Service, and that is used to repay debt for longer-term capital improvements approved by voters through bond elections.
Proceeds from a bond issue can be used for the construction and renovation of facilities, the acquisition of land and the purchase of capital items such as equipment, technology and transportation. I&S funds cannot by law be used to pay M&O expenses, which means that voter-approved bonds cannot be used to increase teacher salaries or pay rising costs for utilities and services.
Currently, the Killeen ISD M&O tax rate is $0.97 and its I&S tax rate is $0.1911 for a total tax rate of $1.1611.
KISD TAX RATE HISTORY
The current KISD tax rate is 10 cents lower than it was in 2018 following the 2018 bond election. House Bill 3, a school finance bill passed by the 86th Texas Legislature that provided additional state funding for our schools and aimed to provide property tax relief to Texans, reduced the district’s M&O property tax rate by $0.07 cents per $100 valuation this year and potentially more over the next two years. In addition, the Board was able to lower the I&S rate by 3 cents, taking it from 22 cents to 19 cents, for fiscal year 2020 due to property value growth and favorable market conditions.
ESTIMATED TAX IMPACT
If approved, the estimated tax impact of this bond is anticipated to be a maximum of 9.13 cents for a total tax rate of $1.2524 per $100 valuation. This equates to an increase of approximately $9.81 a month for the average taxable home valued at $129,000.
If only Proposition A is approved, the estimated tax impact is anticipated to be a maximum of 7.13 cents, equating to an increase of approximately $7.66 for the average home. If only Proposition B is approved, the estimated tax impact is anticipated to be a maximum of 2.0 cents, equating to an increase of approximately $2.15 a month for the average home.
EXEMPTION FOR AGE 65 AND OVER AND DISABLED VETERANS
State law freezes the dollar amount of school taxes for homeowners 65 years of age and older and disabled veterans who have filed their Homestead Exemption. This bond proposal will not affect taxes for residents who meet that criteria.