The current situation
If approved, only one of the district’s two tax rates would increase, while the other would remain flat. The total tax rate would be a decrease from the last fiscal year.
In that situation, the district would have a maintenance and operations, or M&O, tax rate of $0.6631 per $100 valuation for the 2025-26 school year. This rate is higher than what the district approved before the school year began, but is less than the tax rate for the previous year.
The generated $12 million from the proposed rate would directly fund classroom needs.
Property tax rates are made up of two different rates. The M&O rate generates revenue for day-to-day needs, while the interest and sinking, or I&S, rate generates revenue for buildings, renovations and land.
The I&S rate would remain the same at $0.421 per $100 valuation, which was approved for the 2025-26 school year.
“[The VATRE is] the only avenue that school districts have to increase their revenue,” NISD Chief Financial Officer Jonathan Pastusek said.
District officials said new legislation from the 89th Texas legislative session could also contribute to property tax reductions, which would affect how much money the district will receive in local funding. Senate Bill 4 would raise the statewide homestead exemption from $100,000 to $140,000, if approved by voters in November, according to previous reporting.
The breakdown
The district-proposed tax rate would generate at least $12 million for the district if approved by voters. This is the second consecutive year the district will attempt to increase its revenue. A tax rate increase for the district failed to pass last year.
NISD’s board previously called a VATRE August 2024 to generate more local revenue.
Multiple districts in the region have pursued VATREs for additional funds, according to Education Service Center Region 11, the state-appointed service center for NISD and other nearby districts.
“Each district’s decision is based on local needs, priorities and financial circumstances,” said Hailee Fojtasek, ESC Region 11 senior director of communications.
Fojtasek said inflation and growing enrollment can also increase the cost for staffing and services.
NISD officials said record turnout for the presidential election and misunderstandings regarding the item may have contributed to the results of last year’s VATRE.
The district projected a $16 million budget shortfall for the 2025-26 school year in January 2025. In order to close the budget gap, the district eliminated more than 100 teaching positions and maximized staffing ratios in February.
The maximized staffing ratios led to classroom sizes increasing. Grades 2-4 went from a 1:22 teacher-to-student ratio to a 1:24 ratio, while middle and high schools went from 1:165 to 1:180. This means NISD middle schools have about 25.7 students per class period while high schools have about 30.
The TEA recommends classrooms for grade levels 2-4 not exceed a 1:22 ratio, while secondary schools do not have a classroom size limit. Pastusek said some programs, like reading recovery, were also eliminated due to low enrollment.
The need
Pastusek said the district is prepared for the next year or two if the proposed tax rate is not approved by voters.
“If we go another two, four, six years without increases in funding, that may make a big impact on what we have to do in the future,” he said. “But we don’t know what that is until that comes.”
If the new tax rate is approved, it will generate three golden pennies, which is tax revenue that is not subject to recapture by the state. These pennies can only come with voter approval.
“These are local tax dollars that [would] stay in our local schools,” NISD Superintendent Mark Foust said.
Officials said NISD could return to the same operating level it was a year ago and continue efforts to remain competitive with nearby districts.
“We’re sharing what our plan would be if we had the additional revenue. If we don’t have the additional revenue, we can’t necessarily execute all those plans,” Foust said.
The district will continue to share information about the proposed tax rate. If the new tax rate is approved by voters Nov. 4, Pastusek said some program changes could happen immediately. Staffing increases would likely come in the next school year.
Dates to know:
- Oct. 6: Last day to register to vote
- Oct. 20: First day of early voting
- Oct. 24: Last day to apply for ballot by mail (received, not postmarked)
- Oct. 31: Last day of early voting
- Nov. 4: Election Day and the last day to receive ballot by mail (or Nov. 5 if carrier envelope is postmarked by 7 p.m. at location of election on Election Day)
