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Five school districts in the San Antonio area asked voters for permission to access additional cents on their tax rate in order to boost funding to operate schools this November. Only one of them succeeded.
Boerne Independent School District’s Voter-Approval Tax Rate Election, or VATRE, narrowly passed by just a few hundred votes.
Schertz-Cibolo-Universal City ISD’s VATRE failed by an even narrower margin.
Voters also struck down VATREs in Judson, East Central, and La Vernia, with an especially decisive loss in Judson.
Judson trustees have struggled to come to a consensus on how to reduce the district’s budget deficit the last couple of years, drawing concern from some members of the public. The district’s $37 million deficit is larger than the $21 million Judson officials estimated the VATRE would have brought in.
At least two other districts with tax-rate elections, East Central and Schertz-Cibolo, also have budget deficits. But both districts estimated that their VATRES would more than cover their deficits.
Multiple negative stories about Judson also broke during early voting, including a warning from the Texas Attorney General’s office had received a complaint that Judson had engaged in electioneering.
In a normal Texas election, VATREs are rather uncommon. But, this November, an unusually high number of school districts across the state went out for VATREs.
Although the Texas Legislature boosted funding for public education this spring, much of the funding was directed in specific ways. The infusion of $8.5 billion in additional state funding also fell far short of what experts and advocates said was needed to keep up with inflation.
That’s left many Texas school districts looking for other ways to increase funding and decrease spending.
A VATRE is the only lever local districts have to increase their operating revenue for things like teacher salaries and student programs. They give districts access to a limited number of additional cents on their Maintenance and Operations (M&O) tax rate.
Schertz-Cibolo asked voters for the maximum amount allowed by the state: 12 additional cents. District officials estimated that would give them access to an additional $16.2 million a year.
Judson asked voters for 10 additional cents — a compromise between the seven cents wanted by some trustees and the 12 cents wanted by others. District officials estimated their VATRE would have given them access to an additional $21 million a year.
East Central asked voters for five additional cents. ECISD spokesperson Brandon Oliver said five cents was enough to meet the district’s needs without overburdening taxpayers. District officials estimated their VATRE would have given them access to an additional $7.6 million a year.
Boerne ISD asked voters for three additional cents. District officials estimated their VATRE would give them access to an additional $4.8 million a year.
Boerne spokesperson Maggie Dominguez said trustees chose to ask for only three more cents because that is the maximum number of golden pennies allowed by the state.
The 12 cents accessed through a VATRE are divided into two tiers called golden pennies and copper pennies. Golden pennies are worth more than copper pennies, and they’re exempt from recapture, often called Robin Hood.
“The golden pennies are attractive to us. The copper pennies are absolutely not because, for our area, the way that this works out is that we would get about 36 cents on the dollar for a copper penny,” Dominguez said. “We get the full dollar from the golden pennies, and then the state is going to kick in about 60 cents additional.”
Property values in Boerne are higher than in many parts of San Antonio. The district isn’t currently paying into recapture, but it did for many years.
La Vernia ISD also asked voters for three additional cents. District officials estimated their VATRE would have given them access to an additional $1.5 million a year.
La Vernia spokesperson Valerie Frazier said they chose to only go after golden pennies because they’re worth more than copper pennies, and because it “allows the district to bring in additional revenue while lowering the overall tax rate.”
Several of the San Antonio school districts with VATREs on the ballot lowered their Interest & Sinking (I&S) tax rate to help offset the increase to the M&O tax rate.
La Vernia trustees lowered their I&S tax rate by four cents, giving them a combined tax rate one cent lower than last year even with the VATRE.
Boerne decreased its I&S tax rate by one cent for a combined tax rate two cents higher than last year.
SCUC decreased its I&S tax rate by six cents to make the district’s combined tax rate six cents higher than last year with their VATRE.
And Judson decreased its I&S tax rate by two cents to make their combined tax rate 4.5 cents higher than last year. The Judson school board temporarily raised their M&O tax rate 3.5 cents last year using a mechanism called disaster pennies. The VATRE would have made that increase permanent and added another 6.5 cents to the district’s M&O tax. Without the VATRE, Judson’s combined tax rate will be 6.5 cents lower than last year.
The I&S tax rate is used to pay off debts for construction and infrastructure expenses.
East Central went out for a bond election in May, and will have an I&S tax rate nearly five cents higher than last year. However, district officials said they would have had one of the lowest combined tax rates in Bexar County even with the VATRE.
Another measure on the November ballot also makes it likely that many Texas residents won’t see an increase in their next property tax bill even if they approve their school district’s request for a VATRE.
State Proposition 13 is a constitutional amendment that raises the homestead exemption from $100,000 to $140,000 for school districts. Currently, a home with a homestead exemption valued at $300,000 is taxed by a school district as if it were valued at $200,000. If Prop. 13 passes as expected, the home will be valued at $160,000. Homeowners are entitled to homestead exemptions on homes they live in.
Although this election saw an unusually high number of VATREs, they could become the new normal, at least until most Texas districts have passed them. Other Bexar County districts, including Northside ISD, are already considering going out for a VATRE soon.
