Editor's note: This post was updated to correct the state property tax revenue growth for school districts is capped at 2.5%.

Voters in Pflugerville ISD will weigh in on three major initiatives under eight propositions Nov. 8.

Under Proposition A, voters will consider an attendance credit election that will allow the district to make its first recapture payment. Proposition B is the voter approval tax rate election, or VATRE, that allows the district to have a higher tax rate than what is allowed by the state.

Superintendent Doug Killian said Propositions A and B would help the district to address rising operational costs as well as the district’s projected $12 million recapture bill.

“The VATRE is basically going to generate some weighted funding from the state, and that’s the only way that we get to pay for inflationary costs in our district, other than talking to legislators and trying to get them to raise the basic allotment,” Killian said.

For the $367.6 million bond package in Propositions C-H, funding would address safety and security, and upgrade aging campuses and land for teacher housing.

Proposition A: The recapture election

Authorizing recapture payments

Pflugerville ISD voters will consider Proposition A to help offset an anticipated $12 million recapture payment to the state.

This special election is known as an attendance credit election, or ACE, that will allow the district to purchase attendance credits. This is the mechanism through which recapture payments are made to the state, PfISD Chief Financial Officer Jennifer Land said.

Recapture is the process by which the state draws added revenue from school districts that are considered property-wealthy.

Bob Popinski, the senior director of policy for public education advocacy group Raise Your Hand Texas, spoke at a Sept. 13 event about how recapture is becoming a larger issue as property values rise throughout the state. One way to offset the cost to school districts would be to raise the state’s basic allotment per student.

PfISD staff said the ACE will not increase the tax bill for property owners, and it is required by the state because this is the first school year PfISD is officially in recapture status.

What is an ACE?

A Texas school district must hold an attendance credit election, or ACE, when the state classifies it as property-wealthy, according to Chapter 49 of the Texas Education Code. PfISD has been designated a recapture district for the 2022-23 school year. District staff said the amount owed to the state is estimated at about $12 million.

If passed, the PfISD ACE will:

  • allow the district to purchase attendance credits from the state. Attendance credits are the mechanism through which a school district pays the state its remaining recapture balance.

  • allow the district to purchase enough credits to offset the balance owed to the state.

  • allow no additions to the tax rate in subsequent fiscal years as a result of passage of the ACE.

  • allow funding to be increased for programs including fine arts, athletics, gifted and talented, and career and technical education.

If the ACE fails:

  • The Texas Education Agency will determine how to detach $1.2 billion in property valuation from the district

  • PfISD may have to raise the interest and sinking, or debt service portion of its 2023-24 tax rate to accommodate the loss of revenue.

  • Students living within the detached area will attend a neighboring district to be determined.

  • Taxpayers within the newly annexed district will pay a bill for that district.

  • It could potentially result in an increase in the 2023-24 tax rate.

Proposition B: The voter approval tax rate election

District makes second attempt at tax rate election

Though the proposed tax rate for Pflugerville ISD is the lowest it has been in 30 years, the figure still exceeds what the state allows.

Land said the total taxable valuation within the district increased from $17.6 billion in FY 2021-22 to $22.16 billion in FY 2022-23, representing an increase of about 26%.

The rise in valuation means that a proposed rate of $1.2646 for 2022-23—$0.1234 lower than last year’s rate of $1.388—is still in excess of what is legally allowed by the state’s Senate Bill 2, which caps the growth in property tax revenue at 2.5% over the previous year for school districts.

Following an assessment of fiscal need for the 2022-23 school year, the PfISD board of trustees voted to accept the proposed tax rate.

That approval required the board to approve a voter approval tax ratification election, or VATRE, to take place in November. Voters previously turned down a VATRE in November 2021.

What is a VATRE?

PfISD has approved a voter approval tax rate election, or VATRE, that will impact the maintenance and operations, or M&O, portion of the district tax rate.

A VATRE is set is motion when:

  • A district adopts an M&O tax rate that is above the voter-approval rate. For PfISD, that figure is $0.8646 per $100 of valuation.

If a district adopts a tax rate before a budget:

  • The district must publish notice of and hold a meeting to further discuss the proposed rate. For PfISD, that figure is $1.2646.

  • Following adoption of the proposed rate, the district must publish notice of and hold a meeting to adopt the budget.

  • The district officials must order a VATRE for the next uniform election date.

If approved:

  • The VATRE requires a simple majority to pass.

  • The adopted tax rate stands.

If not approved:

  • The district tax rate may not exceed the voter-approved rate.

  • The board will amend the tax rate and adjust projected revenues for the 2022-23 school year, roughly $6.9 million less in state and local taxes.

  • The district would likely work toward another VATRE for November 2023, depending on state action in the 2023 legislative session regarding basic allotment per student

  • to districts.

Breaking down the tax rate

Though the VATRE for PfISD would result in a higher tax bill for property owners living in the district, the proposed rate will be significantly lower than it was for the 2021-22 fiscal year.

Propositions C-H: The $367.6 million bond package The bond is broken into six sections, represented as propositions C-H on the ballot. Voters may approve one, some, all or none of them. Pflugerville ISD Chief Financial Officer Jennifer Land said the bond will not increase the district’s proposed tax rate of $1.2646 for the 2022-23 fiscal year and will not affect property taxes.

Proposition D: $54 million

• Devices for students and staff, network security, infrastructure improvements

Proposition E: $3 million

• Upgrades to the Pflugerville High School performing arts facilities, upgrades to sound systems at four schools

Proposition F: $400,000

• Wiring of The Pfield for headsets and microphones, new scoreboards for Hendrickson High School

Proposition G: $76 million

• Design and construction of a districtwide career and technical education, or CTE, center

Proposition H: $43.92 million

• Purchase land for and build affordable housing for teachers