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.
Killeen ISD’s tax rate is 1.26.
There are two different state funding assistance programs available to Killeen ISD for debt service financing.
The Instructional Facilities Allotment (IFA) program provides assistance to school districts in making debt service payments on qualifying bond or lease-purchase agreements. For 2017 biennium, local tax values must be below $350,000 per student in average daily attendance (ADA) for the District to receive IFA, paid up to $250 per ADA. KISD local tax value is approximately $175,000 per ADA.
The Existing Debt Allotment (EDA) program provides tax rate equalization for local debt service taxes. Specifically, the program provides a guaranteed yield on interest and sinking fund (I&S) taxes levied by school districts to pay the principal of and interest on eligible bonds.
Currently, the guaranteed yield for EDA provides $35 per student in ADA per penny of tax effort and is eligible for up to 29 cents on the debt service tax rate.
KISD expects to receive 43 cents per $1 in debt service from the state if a potential bond program is approved.