CENTRAL TEXAS (KXAN) — Leander ISD and Pflugerville ISD are each asking their voters to approve property tax rates in the Nov. 8 election. The voter-approved rates could add millions of dollars to each district’s budget if a majority of voters vote “for” Proposition B.

Leander and Pflugerville school districts said if the voter-approved rates pass, the overall property tax rate will still decrease from the prior year. However, increased property values will still increase a property owner’s tax bill.

Voter-approved tax rate elections, or VATREs, ask voters for permission to set a maintenance and operations (M&O) tax rate greater than the state’s calculated voter-approval tax rate.

School districts’ property tax rates are made up of two parts: the maintenance and operations rate and the interest and sinking rate. The M&O rate funds many of a district’s daily operations, and the I&S rate finances debt payments.

Leander ISD is asking voters to approve the tax rate to fund pay raises for staff, which the board approved in May. If approved, its M&O rate will increase by about 7 cents, and the I&S rate will decrease by about 1.3 cents. This would be a 6.24-cent decrease from last year.

“Ratifying the ad valorem tax rate of $1.2746 in Leander Independent School District for the current year, a rate that will result in an increase of 35 percent in maintenance and operations tax revenue for the district for the current year as compared to the preceding year, which is an additional $99,041,063.”

Leander ISD Prop. B

Pflugerville ISD said it’s asking voters to approve this rate because property value growth limits how much the district will receive in funding due to recapture. The state compression rate lowered Pflugerville’s M&O rate by 6 cents, and the election asks voters to add 4 cents back into the rate. The PfISD school board lowered the I&S rate by 10 cents. This would be a 12-cent decrease from last year, if voters approve the proposed rate.

Pflugerville ISD’s spokesperson said the district held this type of election twice: once in 2018 when it passed and again last November when it failed.

“Ratifying the ad valorem tax rate of $1.2646 per $100 valuation in Pflugerville Independent School District for the current year, a rate that will result in an increase of 21.37 percent in maintenance and operations tax revenue for the District for the current year as compared to the preceding year, which is an additional $38,146,329.”

Pflugerville ISD Prop. B

Amanda Brownson, the associate executive director of policy and research at the Texas Association of School Business Officials, said a majority of VATREs have passed historically, especially when a district articulates its needs and educates voters on the election. Last November, Lake Travis ISD voters approved a voter-approved rate with 59% of the vote.

These elections have become more common in recent years, Brownson said.

“We have had some pretty significant inflationary cost pressures and labor shortages with districts needing to oftentimes give pay raises in order to find teachers and find staff that are driving up costs,” Brownson said. “This is where they’re going to get that revenue.”

What a “for” vote means

A “for” vote means the voter is allowing the district to exceed the voter-approved tax rate, which the school board adopted.

Pflugerville ISD said the approved rate would add $6.9 million to its M&O funding. Leander ISD said the approved rate would add $32 million.

What an “against” vote means

An “against” vote means the voter is not allowing the district to exceed the voter-approved tax rate. With a majority “against” vote, Brownson said the district will then decide how to adjust its budget and tax rate.

Leander ISD said a failed VATRE would leave the district with a $35 million budget deficit and could result in fewer teachers and restricted or eliminated programs. LISD said its fund balance can cover costs for this school year.

Pflugerville ISD said a failed VATRE may result in increased class sizes and reduce funds for programs like career and technical education, fine arts, athletics and gifted and talented programs.