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Two San Antonio area school districts will be asking voters to approve a tax rate that allows them to generate additional revenue this November.
Monday evening, Schertz-Cibolo-Universal City ISD trustees approved a total tax rate of just under $1.20 per $100 of value. Schertz-Cibolo estimates that will bring the district an additional $16 million in revenue next year.
Meanwhile, at Judson ISD, trustees approved a total tax rate of just under $1.08 per $100 of value, which will give the district an additional $21 million in revenue according to district estimates.
State law allows school districts to access a limited amount of additional revenue if they ask voters to approve it through a Voter-Approval Tax Rate Election, or VATRE.
The majority of a district’s tax rate is set by the Texas Education Agency under a law that automatically reduces tax rates as property values increase.
“The VATRE is being considered in response to a projected $37 million budget deficit, driven by a lack of unrestricted state funding and inflationary costs such as energy, fuel, insurance and other cost of living expenses that have steadily increased in the last five years,” Judson officials said in a press release announcing the election. “If approved by voters, the VATRE would generate an estimated $21 million in additional revenue, helping to stabilize the budget and preserve essential programs and services for students, as well as recruit and retain our qualified educators.”
SCUC ISD announced its VATRE in a Facebook post, noting that the election would give the district a continuous source of additional funding for “teacher and staff raises, student programs, technology device replacement, (and) safety and security.”
In a presentation to the board, Schertz-Cibolo CFO Brian Moy said the VATRE “allows the local community to address what the (state) legislature has not.”
Moy said the district has always been fiscally conservative and avoided spending what they don’t have, but that dramatic increase in inflation has forced them to adopt deficit budgets the last few years. Last year, SCUC ISD adopted an $11 million deficit budget, and once the final numbers are in, Moy expects Schertz-Cibolo to have ultimately spent $6.5 million more than the district’s revenue.
A VATRE gives school districts access to what the state calls enrichment funding. It’s the only lever local districts have to increase their operating revenue.
With voter approval, districts have access to up to 17 additional cents on their tax rate above the tax rate set by TEA. Outside of those 17 possible cents, a school district’s funding to pay salaries and run schools is set entirely by the Texas school funding formula. Even when property values rise, a school district’s revenue doesn’t increase. Instead, it just gets less funding from the state.
Those 17 cents are also known as golden and copper pennies. Golden pennies give districts more bang for their buck than copper pennies, but both give districts access to additional revenue. With voter approval, districts can add up to 8 golden pennies and 9 copper pennies to their tax rate.
State law requires school districts to go out for a VATRE if they want to increase their tax rate beyond five golden pennies. Judson and SCUC both already have five golden pennies, requiring them to ask for voter approval to access more.
SCUC ISD’s VATRE would give Schertz-Cibolo the full 17 enrichment pennies allowed by law. To help offset the 12-cent increase to the tax rate, trustees approved a 6-cent decrease to their Interest & Sinking tax rate, which pays off bonds. That raises SCUC’s total tax rate by 6 cents over the previous year, for a total tax rate of $1.1969 per $100 of value.
Judson’s VATRE would give the district 15 of the 17 allowed enrichment pennies for a total of 8 golden pennies and 7 copper pennies. To help offset 10-cent increase to the tax rate, Judson is decreasing its Interest & Sinking tax rate by 2 cents.
Judson temporarily raised their tax rate 3.5 cents last year using a mechanism called disaster pennies. That means the district’s total tax rate if approved by voters would be 4.5 cents higher than last year, for a total tax rate of $1.0796 per $100 of value.
SCUC’s debt tax rate is 10 cents higher than Judson’s which accounts for the difference in their total tax rates. The maximum operating tax rate set by TEA is the same for both districts.
SCUC ISD trustees unanimously approved the VATRE recommended to them by district officials
Judson trustees debated how many enrichment pennies to put on the VATRE for hours, with multiple rounds of failed votes.
José Macias Jr. wanted Judson to access the full amount of funding available to them. Board President Monica Ryan wanted to only increase the tax rate by 7 cents.
