State law requires that school districts seek voter approval to raise their maintenance and operations tax rate above a prescribed amount. The election is referred to as a Voter-Approval Tax Rate Election (VATRE).

Under current law, the State requires public school districts to lower their tax rate when local property values increase, essentially limiting the general revenue school districts are allowed to keep or receive to the same level it was in 2019.

While our local property owners have seen exponential increases in their property values, your local school district does not financially benefit from it on the Maintenance and Operations Tax Rate due to what is known as tax rate compression.

The State, in 2019, set what it calls a Basic Allotment per student. It is $6,160. This is also dependent on the average daily attendance of students. For example, if the average daily attendance is at 95%, Clear Creek ISD receives $5,852 per student. Clear Creek ISD’s average daily attendance rate has declined since COVID-19, adding to the financial challenges. Want to learn more about school funding, enroll in our School Funding Basics online course.

Schools no longer have the same buying power as they did in 2019 when the $6,160 basic allotment was set. According to the Consumer Price Index, average inflation since 2019 has increased by 17%. That means in order to have the same buying power as they did after 2019, the basic allotment would need to be over $7,207.

In total, the VATRE, if approved, would give the CCISD access to approximately $17.5 million in additional revenue, which is less than 1% of the general budget, to pay for inflationary costs associated with running a school district. If approved, this would not result in a tax rate increase due to tax rate compression by the State. Without passing a VATRE, the district would not receive the additional state funding and the District would have to make significant expenditure reductions.

Since 2022, we have eliminated over 140 staff positions totaling $9 million in payroll expenditures. We have internally worked diligently to identify ways to run as efficiently as possible such as making changes to our energy management program and thoroughly reviewing our software product costs and utilization. We are closely reviewing all departmental budgets to identify cost savings. Unfortunately, the funds generated from our identified savings are needed to cover new costs associated with rising inflation.

The superintendent formed a CCISD Strategic Budget Team which was tasked with developing a set of considerations to address these challenges. The committee overwhelmingly preferred seeking a tax rate increase from voters prior to impacting student programs, classroom sizes, and compensation plans. It is important to maintain a competitive position to recruit and retain employees in a field which is increasingly challenging to staff.

A VATRE is for the Maintenance and Operations (M&O) Tax Rate that supports the General Fund or day-to-day operations, such as maintaining student programs, retaining quality teachers and upholding safety and security standards. A bond election is for the Interest and Sinking (I&S) Tax Rate that supports the Debt Service Fund to pay bonds that finance things like new buildings, renovations, buses and equipment for safety and security.

The district’s tax rate is made up of two components: (1) maintenance and operations (M&O) tax rate, and (2) interest and sinking (I&S), also known as debt service tax rate.

The M&O tax rate is used to fund the day-to-day operations of the district, including teacher and staff salaries, utilities, books, electronic devices, student supplies, district insurance, maintenance and custodial supplies, transportation, mental health needs, and other items to educate our students.

The I&S tax rate can only be used to pay the principal and interest payments on bonds sold to construct and furnish district facilities. It cannot be used to fund the district’s operating costs.

If the VATRE passes, it will not increase the M&O tax rate, meaning no impact to that portion of your taxes.

In Clear Creek ISD, we have one of the lowest tax rates in the region and the State and if this proposal is supported by the community, the District will continue to have one of the lowest tax rates in the region and Texas.

The State does allow school districts access to additional pennies known as Golden pennies. Golden pennies are attractive because they generate additional local revenue and state revenue. And all these funds stay local. In order to access three of the Golden Pennies, the school district is required to hold an election to seek voter approval.

If the VATRE passes, the new funding will be available to serve students during the current fiscal year.