At the bottom of many Texans’ November ballots are local elections for school bonds or tax rate increases. Three Texas school districts are asking voters to approve both: bonds backed by property taxes and a property tax rate increase.
Clear Creek, Granbury, and Lewisville Independent School Districts each put bond propositions on the ballot alongside a Voter Approval Tax Rate Election (VATRE).
School bond debt is repaid using local property taxes. With interest, the bonds’ total cost to taxpayers is much higher than the dollar amounts shown on the ballot.
When voters approve school bond propositions, they also authorize the district to collect property taxes “without limit as to rate or amount, to pay the principal of and interest on the bonds.”
Whether or not the tax rate changes when a bond first passes, the local tax liability is increased; thus, every bond is a property tax increase.
Texas law requires school districts to highlight the tax impact by including language on the ballot stating “THIS IS A PROPERTY TAX INCREASE.”
Voter Information Documents show bonds’ total cost to taxpayers with interest and the current debt owed by district taxpayers.
Bond debt is repaid using the portion of property owners’ taxes designated for “Interest and Sinking” expenses (I&S).
Other school district expenses, such as teacher salaries and other classroom-related costs, are paid using property taxes collected for “Maintenance and Operations” (M&O).
If a district raises its M&O tax rate beyond the amount allowed by state law, voters must approve the increase in a VATRE.
Because the state legislature passed laws requiring all school districts to significantly lower (“compress”) their M&O tax rates, districts are able to advertise that their rates will be lower than prior years even if the VATRE passes.
However, taxes will be higher than if the VATRE does not pass.
Each VATRE would permanently take back a portion of the state-mandated property tax relief intended for Texas families and business owners.
On the Ballot
Click on the district name for more information.
Proposition A is the VATRE. Lewisville ISD is proposing a total tax rate of $1.13 per $100 valuation, including $0.75 for M&O—an 8-cent increase.
Three cents of the M&O increase are “golden pennies” that are not subject to recapture. The ballot language states that the tax rate will generate $14.7 million less M&O revenue than last year. The district says the tax increase will generate an additional $37.5 million than if the VATRE does not pass.
If the VATRE fails, the M&O tax rate will be $0.67, for a total tax rate of $1.05. The I&S rate of $0.38 will not change regardless of whether any of the propositions pass.
The bonds are on the ballot as Propositions B-G. The largest, Prop B, would spend $961 million ($1.5 billion with interest) on renovations to existing facilities. Props D-G, totaling $200 million ($313 million with interest), are for athletic and recreational facilities.
Proposition A is the VATRE. Granbury ISD is proposing a total tax rate of $0.93 per $100 valuation, including $0.79 for M&O. District documents fail to disclose the size of the tax increase. A press release states that “some of this new revenue will not be subject to the school finance recapture system,” meaning the tax rate increase is greater than three cents. One district resident estimates it may be as high as 12 cents.
The ballot states that the proposed rate will generate $2.6 million more M&O revenue than last year. The district says the VATRE will generate $8.2 million more than if the tax increase fails to pass.
The I&S rate of $0.145 will not change regardless of whether either proposition passes.
Proposition B is the bond, which is expected to pay for a new elementary school and improvements to multiple facilities. With interest, the $151.7 million bond would cost taxpayers $313 million—more than double the dollar amount shown on the ballot.
Two school board seats are also on the ballot.
Proposition A is the VATRE. Clear Creek ISD is proposing a total tax rate of $0.97 per $100 valuation, including $0.70 for M&O—an increase of 3 cents, which are “golden pennies” not subject to recapture.
The ballot language states that the tax rate will generate $50.5 million less in M&O revenue than last year. The district says the tax increase will generate an additional $17.5 million than if the VATRE does not pass.
If the VATRE fails, the M&O tax rate will be $0.67, for a total tax rate of $0.94. The I&S rate of $0.27 will not change regardless of whether either proposition passes.
The bonds are on the ballot as Propositions B and C, which would fund school improvements and technology.
Early voting runs through November 3. Election Day is Tuesday, November 7.