These Central Texas school districts have tax rate elections on the November ballot

What's the difference between a bond election and a VATRE?

Bond elections can be used for things like building new schools, but they can't be used to raise funds for staff pay or other day-to-day operating expenses and bonds that add to a district's debt. Round Rock ISD's board voted on Aug. 16 to place a nearly $1 billion bond on the November ballot.

VATREs, on the other hand, can be used to increase tax rates and give staff raises. VATREs ask voters to approve an increase to the maintenance and operations (M&O) tax rate, and they don't add to a district's debt.

In all cases, the property taxes for residents 65 years or older, or those who are disabled, are not affected by a rate increase if they have an Over 65 Homestead Exemption.

Let's look at the local districts that have called VATREs for this November, including why they called them and what they plan to do with the funds generated by the increased tax rates if they are approved.

On Monday, Aug. 19, Austin ISD's Board of Trustees voted to place a VATRE on the Nov. 5 ballot. The district said if it's approved, it would generate an additional $41 million for AISD each year. 

AISD said it has called for the VATRE to raise funding in the face of a $78 million deficit for the 2024-25 school year. The district said as it has had to adjust to new state mandates, like a law requiring additional officers on every campus, the amount of money it receives per student from the state has stayed the same since 2019.

AISD said if the VATRE is approved, it plans to spend about $17.8 million on a compensation plan that includes market adjustments for many teachers and staff members. Around $3.2 million would be spent on additional campus support, including instructional coaches, special education support, content interventionists and mental health support. Finally, about $20 million would be used to offset current costs and stabilize AISD's budget.

The VATRE calls for adding 9 cents to the current property tax value for residents, meaning property owners would expect their tax burden to be around 95 cents per $100 of property value. The median-valued home in the district would pay an extra $35 per month, or around $420 per year.

On Aug. 15, the Liberty Hill ISD Board of Trustees called for a VATRE for Nov. 5 so the district can raise educators' salaries without cutting programs.

Liberty Hill ISD said over the past six years, its board has reduced the property tax rate by 37 cents per $100 property valuation, but Proposition A on the November ballot would add 6 cents back to the tax rate. The district said the election is a response to "cuts in state and federal funding, as well as population growth in Liberty Hill and inflation over the past several years."

If voters approve Proposition A, the total school district tax rate will be $1.23 per $100 property valuation, which would increase the monthly tax bill on the average median-value home ($462,264) by $18.11. 

In addition to the VATRE, Liberty Hill ISD's board has also called an "Attendance-Credit Election" for November. The district said due to property value growth, it will soon be required to start making payments to the state through the recapture program. All Texas school districts who participate in recapture must hold an Attendance Credit Election, and Proposition B on the November ballot would "simply authorize the district to make its required payments to the state; it would not impact the tax rate."

If voters don't approve Prop B, the state could permanently remove some property from the district for property tax purposes.

"For example, the state could require a large retail business within Liberty Hill ISD to make property-tax payments to a different school district. Even as the business grew more and more valuable, its payments would not go to Liberty Hill ISD," the district said. "In other words, the responsibility of funding Liberty Hill ISD schools would be spread among a smaller number of property owners."

On Aug. 19, Manor ISD Board of Trustee members approved a property tax election to increase staff salaries, school safety and mental health support and approved a tax rate of $1.0814 per taxable $100 for the 2024-25 school year.

The VATRE, which will appear as Proposition A on the Nov. 5 ballot, will allow voters to approve or disapprove the tax rate adopted by the board. If passed, it will allow the district to access the maximum amount of tax revenue from "golden pennies," which are funds that are not subject to recapture and would remain with Manor ISD.

The district said if Prop A is approved, Manor ISD would get an additional $4.8 million injected into its budget, which it would use to provide all employees with a total 3% salary increase of the midpoint for the school year, fund salaries for new school police officers and equipment and fund salaries for new social workers and student programs.

The $1.0814 tax rate depends on the VATRE's approval and, if it's approved, it would be the district's lowest tax rate since 2015. Manor ISD said it could achieve this by reducing the portion of the tax rate that is used to pay off bond debt "as the district's debt has been decreased over the years through accelerated debt payment."

"These factors and the state lowering the maximum compressed tax rate during its 88th legislature session last year would result in the $1.08124 tax rate for the 2024-2025 school year," the district said.

If Prop A is approved, Manor ISD said a homeowner with an average home value in Manor ($233,192) would see about a $10 decrease in district property taxes per year.

On Aug. 19, Marble Falls ISD's board of trustees called a VATRE election "in a proactive effort to prevent increasing class sizes and cutting essential student programs." 

The district said, like many across Texas, it is being negatively impacted by a lack of state funding, forcing it to adopt a deficit budget. The district said if approved, the VATRE would generate approximately $2.2 million to support recruiting and retaining staff, maintaining current classes sizes and continuing student activities and programs.

The VATRE includes a 2.67-cent tax increase. If voters approve Proposition A on the Nov. 5 ballot, the total school district tax rate will be 91.22 cents per $200 property valuation, which would increase the monthly tax bill on a median-value home ($400,000) by $8.90. 

The district's current M&O tax rate is 67.25 cents and the current debt service rate is 21.53 cents, resulting in a total tax rate of 88.78 cents.

On Aug. 19, San Marcos CISD's Board of Trustees moved forward with a proposed tax rate increase of 2 cents.

As of Aug. 20, San Marcos CISD has not provided much context for how the VATRE would impact the district, but this story will be updated as more information is made available.

Meanwhile, while Round Rock ISD doesn't have a VATRE on the November ballot, voters in the district will still weigh in on funding for schools. The Board of Trustees voted on Aug. 16 to put a $988 million bond election on the Nov. 5 ballot to provide upgrades and address needs throughout the district.

The bond election includes four propositions:

• Proposition A: $798.3 million for maintenance and repair of schools, including replacing air conditioning systems, roofing, electrical, and plumbing systems and other updates like fresh paint, new ceiling tiles and flooring. Prop A would also allow the district to purchase new buses and to purchase and equip a new facility dedicated to expanding Career and Technical Education programs
• Proposition B: $125.3 million to upgrade technology and infrastructure to support modern learning and to increase the speed, connectivity, reliability and security of the district's network
• Proposition C: $8.6 million for improvements and upgrades to fine arts programs
• Proposition D: $65.9 million for improvements to existing athletic facilities, including upgrades to locker rooms, lighting and scoreboards and adding artificial turf to competition fields. Prop D also includes the construction of a standalone multipurpose athletic facility