Voters who live in Round Rock ISD may be asked for the first time to approve a tax rate increase by means of a voter-approved tax rate election, or VATRE.

Trustees and district officials discussed potential impacts of calling a VATRE on May 18, with staff proposing a $531.9 million budget for the 2023-24 fiscal year.

Maritza Gallaga, RRISD’s interim chief of public affairs and communications, said the district has no record of a prior tax rate election, the mechanism by which Texas school districts can levy a higher tax rate to generate more property tax revenue.

The tax rate election would be a balm to the district’s ongoing problem of funding, as its recapture payments have ballooned the $14.8 million budgeted toward payment for the 2021-22 school year to more than $85 million for 2022-23, according to the district.

Without the higher rate, RRISD Superintendent Hafedh Azaiez said during the May meeting that the district will have to make difficult decisions about staffing, class sizes, electives available to students, athletic and fine arts programs among others.



“As you know, 80% of our budget is in people,” Azaiez said. “We’re really talking about eliminating positions. We need $12 million more dollars.”

The proposition would see three golden pennies, in addition to the five already incorporated into the tax rate, added to increase the amount of tax revenue kept by the district. Golden pennies are used to keep tax revenue local, with one penny per $100 of valuation not subject to recapture, or repayment to the state.

The district levied a tax rate of $1.0626 for its 2022-23 fiscal year, and should the VATRE pass, will levy a tax rate of $1.0064. While it is technically a lower rate than the previous year, it is expected to generate more revenue for the district as property values within its bounds rise.

Officials have not yet ordered a VATRE, but RRISD’s Chief Financial Officer Dennis Covington said the first step in the process would be to adopt its proposed budget including the extra pennies June 20.