Texas Education Agency officials said last week they will urge trustees of the North Forest Independent School District to schedule an election in November seeking a property tax increase of 13 cents for the financially troubled school district in northeast Houston.

The TEA cannot force the election, but could close the schools and require a consolidation with a nearby district if North Forest’s finances do not improve.

The district has depleted its bank account and is expected to show a deficit of $11.8 million at the end of August. Raising the district’s current rate of $1.24 per $100 of assessed valuation to $1.37 would generate about $2 million a year, but state law prohibits a larger increase.

An outside auditor reported in January that the district was almost bankrupt because it had to repay millions of dollars to the state for inflating enrollment figures over several years. The district currently has about 8,000 students.

The school board is to vote on setting an election for the higher tax rate on Aug. 25.

State education commissioner Robert Scott replaced the elected school board with a seven-member team in late July. Scott’s actions must be approved by the U.S. Department of Justice.

Standard & Poor’s lowered the underlying credit of the district to BB from BBB-minus in February, citing “severe fiscal distress.” The district has about $68 million of outstanding debt.

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