Liberty Hill ISD will ask voters to approve a $0.07 increase to the district’s tax rate in a Nov. 4 election.
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.
