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18-cent reduction in tax rate approved

18-cent reduction in tax rate approved

Northwest ISD taxpayers will continue to see the lowest tax rate in more than three decades following school board approval of a roughly 18-cent reduction in the total tax rate.

At their August 28 meeting, the Northwest ISD Board of Trustees approved the district’s recommendation to decrease the total tax rate to $1.0902 per $100 of taxable property value, reduced from the 2022-2023 tax rate of $1.2746. The new tax rate is composed of a maintenance and operations tax rate of $0.6692 and an interest and sinking tax rate of $0.4210.

In Texas, M&O tax rates pay for day-to-day operations of school districts, such as salaries and utilities, while I&S tax rates are used to pay off debt, such as paying off bonds. While voters authorized the district to increase the I&S tax rate by one-tenth of a penny in the 2023 bond election, the total tax rate still decreased because of continued M&O tax rate compression required by state law.

In Texas, school district M&O tax rates are primarily determined by the state government based on a formula. Northwest ISD’s fast growth has played a beneficial role in this formula, as increasing property values compresses the M&O tax rate. The second part of the total tax rate, the I&S portion, is levied to service debt approved by voters as part of bond elections.

Northwest ISD’s fast growth means the district has typically sought voter approval for bond referendums every three to five years to build new schools to accommodate an influx of new students. Northwest ISD remains the fastest-growing school district in North Texas, with more new homes both built and sold than any other district in the region. On average, the district now increases its total enrollment by at least 1,400 students per year.