At an Aug, 18 meeting, the LHISD board of trustees voted to call a voter-approval tax rate election, or VATRE, after adopting an $105.9 million balanced operating budget for fiscal year 2025-26. The district is seeking to generate $10.9 million in additional revenue through the VATRE after making $8 million in budget cuts over two fiscal years and realizing a $2 million deficit in FY 2024-25.
“The district has faced many budget challenges due to growth and inflation,” Chief Financial Officer Rosanna Guerrero said. “[The VATRE is] a reinvestment in the $10 million dollars that have been cut from the district over the past two years.”
The overview
The district is asking voters to approve a maintenance and operations, or M&O, tax rate of $0.7389 per $100 valuation, which is about $0.07 higher than the FY 2024-25 M&O tax rate of $0.6669 per $100 valuation.
The interest and sinking, or I&S, tax rate would remain at $0.50 per $100 valuation, making for a combined tax rate of $1.2389 per $100 valuation.
The M&O tax rate funds the day-to-day operations of a district, including salaries, benefits and operational costs, while the I&S rate may only be used to repay debt.
Since 2018, the district's M&O tax rate has decreased by $0.375 due to compression from the state as property values grow, according to district information.
The impact
If property values increase by 10%, homeowners with a median home value of $516,513 could expect to pay $4,665 in annual property taxes under the new tax rate, according to LHISD data. This would increase a homeowner’s annual property tax bill by $348 in FY 2025-26, Guerrero said.
Texas voters will decide whether to approve increasing the statewide homestead exemption from $100,000 to $140,000 in a November election.
The approach
If district voters approve the proposed tax increase, LHISD could generate an additional $10.9 million in revenue after paying $1.5 million in property taxes back to the state through a process known as recapture, Guerrero said.
“It's not truly a surplus,” trustee Brandon Canady said about the additional funding. “It is a fund to prepare for the future. We have schools to open. Every one of those schools comes with a million-dollar-plus expense of staffing the school.”
District officials said they are seeking to reinvest $7.4 million back into student programs, including funding support staff positions that were previously eliminated, reducing class sizes and restoring campus and department budgets.
Additionally, LHISD could reinvest $1.3 million into safety and security initiatives, such as keeping a school resource officer at every campus, and $2.2 million in recruiting and retaining teachers and staff by providing salary increases.
If the VATRE does not pass, LHISD may need to make $4 million in cuts in FY 2026-27, LHISD interim Superintendent Travis Motal said. The district could consider not opening Legacy Ranch Middle School or Elementary School No. 8 in 2026, he said.
“There will be some very, very difficult decisions," Guerrero said. "High level, a minimum of $4 million in additional cuts will have to be made in order to balance the budget for next year."
Other costs saving options include:
- Reducing transportation routes
- Further increasing class sizes
- Sharing campus staff between schools
- Reducing staff in all departments
- Significantly increasing facility rentals
- Implementing fees to participate in extracurricular activities
The district currently has less than two months of operating expenses in its fund balance, Guerrero said. The Texas Education Agency recommends districts have at least three months of operating expenditures on hand, which would be $25 million for LHISD, she said.
Without the VATRE passing, the district may need to take out operational loans to pay for staff salaries and utilities, Guerrero said.
The background
In November 2024, district voters failed to approve a nearly $0.06 increase to the district’s tax rate for FY 2024-25.
The district made $2 million in reductions to campus and department budgets in FY 2023-24. In March, the board approved around $6.4 million in budget cuts, including eliminating 78 positions, in FY 2025-26..
This school year, the district increased class sizes to save money, and teachers are starting to feel the effects, Motal said.
“Having one or two more kids in your room really does make a difference in how you’re able to interact with the students,” Motal said. “Just in the first few days [of school], we’re already starting to see that impact.”
In the 2025 legislative session, state lawmakers approved an $8.4 billion school funding increase under House Bill 2. In districts with more than 5,000 students, the legislation allocates $2,500 raises for teachers with three to four years of experience and $5,000 raises for teachers with five or more years of experience.
LHISD will receive $12.7 million in new funding through HB 2, according to district information. Guerrero said the new funding must go toward certain costs and does not fully cover the district’s expenses.
What they’re saying
“I challenge everybody in the community [to] talk to somebody [and] ask questions,” trustee Michael Ferguson said. “The worst thing to do is to go into the polls to vote and not know what you’re voting for and just voting no.”
During the public comment period of the Aug. 18 meeting, LHISD parent Zeb Miller said he has already observed how the budget cuts have impacted his children and other students in the district.
“We can't afford more cuts,” Miller said. “We can't do it... We need this [VATRE]. It's reasonable. Our kids deserve it. Our kids deserve better.”
There were no community members who publicly spoke against the VATRE at the Aug. 18 meeting.
