VATRE stands for Voter-Approval Tax Ratification Election. If a school district adopts a maintenance & operations (M&O) tax rate that exceeds the maximum amount allowed by state statute, a VATRE must be held to gain voter approval to raise the tax rate.  For Ponder ISD, a tax rate that exceeds $0.8546 will trigger a VATRE.  The PISD tax rate adopted by the Board of Trustees on August 18, 2022, is $0.9746.

Our M&O revenue from the State can increase in the following ways:

• The state increases the basic allotment, which is the legislatively mandated funds the state sends to each school district to provide a basic level of education.
• Student enrollment and/or student attendance rates increase 
• District voters approve a Voter Approval Tax Rate Election (VATRE)

No, property appraisals have increased this year by 36% within the district, but the increase in the district’s total M&O revenues as a result of increased property values is $0.

That’s because when local tax revenues increase, the state decreases the amount of M&O school funding it sends to districts, cancelling the gains. The only way that total M&O revenues will increase for the district is through student enrollment growth or through a VATRE.

**from "An Introduction to School Finance in Texas" (TTARA Research Foundation, Revised March 2022 (page 36)
https://www.ttara.org/policy-areas/school-finance/reports-and-briefs/

Appendix 1

Voter Approval Tax Rate Ratification (“VATRE”) or (“TRE”) Elections  

Taxpayers have had more direct input into the setting of a school district’s tax rate during the last seven years than at any other time in recent history. Prior to 1993, school districts were authorized to adopt a tax rate that exceeded the previous year’s rate by up to $0.08 without any taxpayer input. If a school district adopted a rate that exceeded the prior year’s rate by more than $0.08, taxpayers had to gather the required number of valid signatures and present a petition to the school board to require the scheduling of a “rollback” election to limit the tax rate in the following year to the rollback rate.

Beginning in 1994, the requirement for a petition was repealed and school districts instead were required to automatically schedule a rollback election if the district adopted a tax rate that exceeded the rollback rate to allow voters to “roll back” the rate in the current year. In 1997, the purpose of the election was changed from an election called to allow voters to limit the district’s tax rate to an election called to ratify the tax rate that had already been adopted by the school board. If the voters did not approve the adopted rate, the rollback rate became the adopted rate for that school year.  

In an effort to preserve the tax relief afforded by the tax rate compression in 2006, the Legislature tightened the law to allow school districts to add an overall total of $0.04 to their compressed M&O rates without voter approval. Voter approval was needed to access the remaining pennies up to the statutory M&O rate cap.  

School districts are required to calculate a “voter-approval tax rate” every year (previously known as the “rollback” rate). Under HB 3 a “voter-approval tax rate” ratification election will be required if a school board adopts a tax rate that exceeds its voter-approval rate. The bill also required school districts to hold an election in the 2019 tax year if a school board adopted a tax rate that exceeded its compressed M&O rate (including enrichment pennies) plus its debt rate.   Beginning in the 2020 tax year, the voter approval rate was increased by a penny and became (1) the district’s Tier 1 rate for that school year (MCR), plus (2) the greater of the district’s Tier 2 pennies levied in the previous school year or $0.05, plus (3) the district’s debt rate. Tax ratification elections must be held on a uniform election date that allows sufficient time to comply with the requirements of other laws, and a school district must conduct an efficiency audit before holding an election. The requirements for a ratification election and an efficiency audit are waived if the school district is located in a disaster area and additional spending is required due to the disaster. The election is waived in the year following the year of the disaster, and the efficiency audit is waived for two years. A disaster includes a tornado, hurricane, flood, wildfire, or other calamity, but does not include a drought, and the governor must have requested federal disaster assistance for the area in which the school district is located. If a school district utilizes this provision, the district must hold an election in the following year to maintain the higher rate.  

Because of the tighter restrictions placed on the adoption of tax rates since 2006, the number of ratification elections has increased dramatically, providing taxpayers with a much higher degree of involvement in the setting of a district’s tax rate. Between 2006 and 2019 school districts held 751 elections and a higher rate was approved in 598 (80%) of them.

Voter-Approval Tax Rate

 1)  District's Maximum Tier 1 Compressed Tax Rate (MCR)

        +

 2)  Greater of:

         (a) district's prior year enrichment tax rate [Tier 2] or
         (b) $0.05

        +

3)  Debt Rate [I&S]

In Ponder ISD, because the tax rate will decrease from last year's tax rate whether or not the VATRE passes, increases in property tax bills will be due to the growth in property values, NOT the VATRE.

For every $100,000 of taxable value:

If the VATRE is successful, the tax rate will be $1.3477 (6 cents lower than last year's rate) for every $100 of property valuation. That’s $1,347.70 per year or $112.31 per month per $100,000 of valuation.

If the VATRE is not successful, the tax rate will be $1.2277 for every $100 of property valuation. That’s $1,227.70 per year or $102.31 per month per $100,000 of valuation.

So, the difference in taxes with the VATRE will be $10 per month for every $100,000 of valuation.

For an "average residence" in Ponder ISD, valued at $239,768 of taxable value:

If the VATRE is successful, at the tax rate of $1.3477 (6 cents lower than last year's rate) for every $100 of property valuation, the average PISD tax bill payment will be $3231 ($269.25 per month).
**Last year (2021-22) for this same taxable value, at the tax rate of $1.4077 for every $100 of property valuation, the average PISD tax bill payment would have been $3375.41 ($281.28 per month).

If the VATRE is not successful, at the tax rate of $1.2277 for every $100 of property valuation, the average PISD tax bill payment will be  $2943.63 ($245.30 per month). 

For qualifying homeowners who are age 65 or older or who are disabled in Ponder ISD:

School property taxes are frozen for homeowners who qualify because they are disabled or age 65 or older. Their taxes can go down, but not up. Therefore, if you qualify for the exemption for age or disability, your taxes will not increase if voters approve this VATRE.