Grappling with declines in property taxes, meager reserves and the prospect of no pay raises next school year, Dallas ISD is considering asking voters to raise taxes for schools.

Local property taxes largely fuel school budgets, and every penny added to DISD's tax rate would raise about $7.1 million, according to district budget documents. The tax rate is applied to the taxable value of property.

If voters were willing to approve an additional 8.5 cents, the district would reap $58.9 million – enough to cover 2 percent pay raises and performance bonuses for teachers, and replenish district fund balances with $26 million, the documents show.

Nothing is certain and the idea is preliminary. Trustees are just beginning their review of a recommended budget for next school year, and are scheduled to discuss the district's tax rate at a board briefing meeting today.

The recommended budget for the district's main operating funds is about $1.251 billion for next school year, compared with $1.248 billion in the current year – an increase of only a quarter of a percent.

Getting people to increase their own taxes is always a tough sell, and some trustees have already expressed concerns about going to voters for more money.

"Not knowing everything, my knee-jerk reaction is always 'no,' " said trustee Nancy Bingham. "I know across the nation school districts are really hurting, and I know a lot of people who have lost their jobs. ... I would be very reluctant to go to the taxpayers and ask them to do a tax hike, especially in these tough economic times."

Trustee Bruce Parrott echoed those comments, saying, "We need to stay within our means, in my opinion. Everyone out there is hurting."

He also referenced DISD's 2008 budget crisis, when the district faced a shortfall as high as $74 million and had to lay off hundreds of teachers. While the final deficit turned out to be $22 million for 2008-09, educators and the public have not easily forgotten the debacle, and a tax-rate election might provoke them further.

"You don't put gas on a fire," Parrott said.

Trustee Edwin Flores said the district should continue to show taxpayers it is increasing student achievement and spending their money wisely before asking for more.

"When you are having a budget discussion, you have to discuss all the options," he said. Putting a tax rate increase before voters "is certainly an option, but it's not a viable option."

Not all trustees are outright opposed to the idea.

"I don't know if it will pass, but I think we definitely ought to have that as an option," said trustee Lew Blackburn. He has been adamant about increasing the district's fund balances, which were used to cover the red ink in 2008-09 and are considered abysmally low. Reserves are currently estimated at $36 million, down by almost $100 million since 2005-06.

Superintendent Michael Hinojosa has said that he expects the fund balances to increase by June 30 – the end of the budget year – though he has declined to say by how much.

DISD's tax rate of 1.27 is lower than the majority of area school districts whose taxes are collected by the Dallas County Tax Office. Based on property with an average tax value of $142,000, the DISD portion of a tax bill would be about $1,805. Adding 8.5 cents to the tax rate would produce a bill of $1,926.

The total tax rate generates money for district operations and maintenance, and paying off debt for school construction and repairs.

Districts are limited in what they can collect from taxpayers, and Dallas ISD is already at the maximum tax rate of $1.04 for maintenance and operations. That's why it would have to ask voters for permission for an increase.

Because of relatively recent changes in school finance law, tax rate elections are a new phenomenon, said Joe Smith, a former Texas school superintendent who is executive director of a website that tracks such elections and other education issues.

Since 2006, about 300 districts have had tax-rate elections – only a small portion of Texas' school districts – and about 70 percent of the tax increases have been approved, Smith said.

Tax rates are applied to the taxable value of property, reaping proceeds for districts to cover expenses for school operations and maintenance and debt for school construction and repairs.

*Rates rounded to nearest cent

SOURCE: Dallas Central Appraisal District