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Texas School Funding Crisis & Potential VATRE

A photo looking up in the Texas Capitol building

Northwest ISD is in the process of analyzing a potential VATRE – Voter-Approval Tax Rate Election – to continue offering programs that prepare students for college or the workforce while also retaining and recruiting the best-quality teachers in the area.

As with most school districts across the state, Northwest ISD expects to adopt a significant deficit budget because of the ongoing Texas school funding crisis. State funding for school districts has not been updated since 2019 despite substantial inflation, leading to multimillion-dollar budget shortfalls in school districts across the state. Additionally, though they approved $4 billion in new funding for public schools in 2023, state leaders have refused to provide those funds to public schools. Governor Greg Abbott has remained firm in his stance that no additional school funding will be approved unless his legislative priorities are approved with it.

Northwest ISD expects to adopt a deficit budget exceeding $14 million for the 2024-2025 school year. If approved by voters, a VATRE would generate $15 million for the 2024-2025 school year and additional funding each year as the district continues to experience tremendous enrollment growth. These funds would be used to protect class size ratios, prioritize retaining and adding student programs, and continue to provide teacher and staff raises.

If a VATRE is called and approved by voters, the district’s maintenance and operations, or M&O, tax rate would increase by 3 cents. This would represent an average $120 yearly increase on a home that is valued at $500,000. The proposed 2024-2025 M&O tax rate is $0.6669, and if a VATRE is called by trustees and approved by voters, this rate would change to $0.6969.

Tax Rate Priorities

Student Programs: Class sizes & Student opportunities

A teacher assists a student on a Chromebook

Northwest ISD continues to offer award-winning academic programs, such as its career and technical education academies and pathways, and will prioritize protecting student opportunities. The district continues to focus on maintaining or decreasing class sizes for the best learning environments possible.

Competitive Pay: Retaining, Recruiting Quality Teachers & Staff

A teacher assists a student on a Chromebook

If a VATRE is approved by voters, Northwest ISD will continue to focus on increasing teacher and staff salaries and benefits with competitive compensation. This focus allows the district to continue to retain and recruit quality talent to educate students and support classroom teachers.

Tax Rates History

Northwest ISD's current maintenance and operations tax rate of $0.6692 per $100 of taxable property is among the lowest M&O rates in the area. Additionally, the district's current total tax rate of $1.0902 per $100 of taxable property was an 18-cent reduction from the prior year's tax rate and marks the district's lowest total tax rate in more than 30 years.

Area M&O Tax Rates

If approved by voters, Northwest ISD's new M&O tax rate would be $0.6969 per $100 of taxable property, which would still rank near the lowest in the area. M&O tax rates of districts that border Northwest ISD as well as other large or fast-growing school districts in the area include:

What is a VATRE?

  • State law requires that school districts seek voter approval to raise their tax rate above a prescribed amount. The election is referred to as a Voter-Approval Tax Rate Election, or VATRE.
  • Northwest ISD's VATRE would ask voters to approve a 3-cent increase to the district's maintenance and operations tax rate. In Texas, M&O budgets are used to fund daily operations, such as salaries, student programs and utilities.
  • These three cents are classified by the state as "golden pennies," meaning all funding generated from this increase would stay within Northwest ISD and would not be subject to recapture (or funding that is partially kept by the state in its general fund, also known as "Robin Hood"). The state recapture law redirects local school funding to schools in other areas of the state, thereby reducing the funding the state provides to districts on its own.
  • School boards are required to adopt the M&O rates provided by the state with the exception of any funds provided through "golden pennies" and/or approved by voters in a VATRE.

Did You Know?

Northwest ISD sends millions of dollars to the state each year in the form of a recapture payment. These funds are kept in the state budget instead of being used locally. If approved by voters, all funds generated from the VATRE would stay in Northwest ISD and not be subject to recapture.