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Five school districts in the San Antonio area asked their residents to approve tax-rate elections on November 4th. Voters rejected all but one. TPR Education Reporter Camille Phillips sat down with Morning Edition Host Norma Martinez to talk about why these districts felt these elections were necessary, and what the repercussions could be for the districts where they failed. Here's a transcript of their conversation, lightly edited for ease of reading.
Norma Martinez
Good morning, Camille.
Camille Phillips
Good morning, Norma.
Norma Martinez
Well, let's start off with the basics. Explain to us: What is a tax-rate election?
Camille Phillips
Yeah, well, it's officially called a voter-approval tax-rate election, or VATRE. It's a long name that (is) really hard to decipher what it actually means. It is a tax-rate election, meaning that you do ask your voters to approve an increase in the tax rate, but it's specifically for the tax rate that operates schools, so salaries (and) student programs. As opposed to a bond election, which is permission to take on debt to build new schools or renovate or pay for infrastructure like HVACs and technology.
And a lot of school districts are going out for them now, because they've, you know, been facing a lot of budget constraints over the last five, six years. Inflation has really gone up, and they've kind of been holding out for the state legislature to give them more money. Some of them — a lot of them — have been taking on deficit budgets, kind of relying on their savings, as it were, in the meantime. But that is unsustainable in the long term, and now they've seen that the state legislature is -- gave them some, but not enough to entirely make up for the inflation. So, they either have to make a lot of cuts or they have to find some more money elsewhere. And this is the only lever local districts have to increase their revenue to operate schools.
Norma Martinez
So, what was it specifically that the state legislature did approve for schools?
Camille Phillips
It was $8.5 billion with a B. That sounds like a lot of money, but we have a lot of students in Texas. It's over 5 million. And so that spreads out pretty quickly and doesn't cover the full cost of inflation, most experts say, by far.
And then also, a lot of that money was directed in specific ways; teacher raises, for instance, (for) experienced teachers. And that's great for the teachers, but it does mean that the district has less wiggle room, and they still have other costs that they have to pay that's also been affected by inflation, like the increasing cost of diesel and stuff like that. And that money — there was a pot of money for that as well that was added the last minute, but it doesn't go far enough, most districts say.
Norma Martinez
Well, I know that here in Texas, whenever there is this kind of an election that is on the ballot, it does tell the voter that this is a tax increase. Do you think that maybe that might have influenced many voters to possibly vote against it? Because people do not like to pay increases in property taxes.
Camille Phillips
Yes, that is very true. In 2019 there was a state law that said that all elections like this have to say this is a tax increase, even if it's not a tax increase. So, for bonds as well, for instance, oftentimes school districts are able to, like, maintain their current tax rate for the debt, but it still has to say 'this is a tax increase.'
And we actually had one of these five districts, La Vernia ISD, reduce their debt tax rate by four cents, and were only asking for three cents on their operating tax rate. And so, overall the combined tax rate was lower, but their ballot language still said 'this is a tax increase.'
And yes, property values have risen exponentially across Texas, and that's a big pain point for families across the state. And so, understandably, you know, the reflex is (to say) no. But school finance is complicated, right? People don't necessarily know the fine details. Understandably — I think there's a saying that there's only like five people in Texas that really understand school finance law.
Norma Martinez
And you're one of them, probably.
Camille Phillips
I don't know about that. I think I know it more than most. But yeah, it's complicated, because, like I said, this is the only real lever school districts have to increase their money to operate schools. But a lot of people don't want to pay more money, understandably.
Because the thing is, your property values rise, but your schools don't get more money automatically. The state funding formula dictates how much money per student a school district gets, and that doesn't change even if you pay more in property taxes. The state just contributes less. It's like — the local and state share changes.
Norma Martinez
So, Boerne ISD was the only one of the five area districts that successfully had their voters approve this tax-rate election. What do you think that they might have done? Or what sets Boerne apart, maybe, from the other area districts that had their voters reject that tax-rate election?
Camille Phillips
Yeah, well, I should say it was very close. And it was actually the Bexar County voters that took Boerne over the edge. So, in Kendall County they actually had slightly more no votes than yes votes. So, it was close all around. It was also really close in Schertz-Cibolo-Universal City; they almost passed there.
But all that to say: Boerne has more property wealth than the other districts. For a long time, they paid into recapture, commonly called Robin Hood. And a lot of districts that have Robin Hood, their tax base isn't happy about it, right? They don't like the idea of taxes they pay going to the state instead of to their own community.
And so, a selling point that Boerne had that other districts with this tax-rate election did not, is that this money — because they only went out for three cents that's called Golden Pennies. And these three cents, these Golden Pennies have — they're different than all the other money for local districts, in that no matter how much money they raise locally through those Golden Pennies, they get to keep them. They don't give any to the state. And so, Golden Pennies are especially attractive to property-wealthy districts, and it's a selling point that districts with Robin Hood, or who are at risk of going into Robin Hood, can sell to their taxpayers. Is that, 'This money is protected. You get to keep your local tax dollars local.’
Norma Martinez
Well, what about the other four districts that had their voters reject the tax-rate elections? What could be the potential consequences for them down the road?
Camille Phillips
Yeah, I mean, there's not really any other option unless they keep trying for another tax-rate election. Like East Central has now done it twice and had it fail twice. So, the only other option they have now is to make budget cuts, and that could mean — especially in Judson ISD, where they have a $37 million deficit that they were hoping $21 million of would go away with this election. Now they have to find a way to cut all of that, and it's going to have to be pretty significant.
Norma Martinez
Well, Camille Phillips is TPR's Education reporter. Thank you, Camille, for following the story so closely, and we're looking forward to hearing how this is all going to play out in the next year or so.
Camille Phillips
You're welcome, Norma. I'm not looking forward to covering all of these budget discussions. They're always painful, but —
Norma Martinez
But they're important to know.
Camille Phillips
They are.
Norma Martinez
Thank you so much.
