Funds from the proposed tax rate increase would support teacher raises, including for staff at Forest North Elementary School. (Courtesy Round Rock ISD)
The proposed tax rate is six cents higher than it would be without the passage of the voter-approval tax rate election, and would generate funds needed to provide a 2% general pay raise for all employees, increase starting teacher pay to $58,000 and address pay compression throughout the district.
If passed, it would result in a tax bill roughly $219 higher annually for a home of average taxable value, according to the district. This comes as officials say legislative efforts around school funding have limited what the district can do to increase pay for non-teaching staff.
“Our current situation is no different than many other—actually most—public schools in the state of Texas due to the lack of really appropriate or adequate funding from the state," Superintendent Hafedh Azaiez said.
The big picture
Tammy Conrad, president of teachers union Education Round Rock, called on the district over the summer to increase pay for educators, advising that stagnant salaries may cause qualified teachers to leave.
“Why will these employees stay in public education if they can get a job in fast food for more money?” Conrad said at a June board of trustees meeting.
A recent Texas Association of School Boards analysis of the district’s compensation shows RRISD is at the median when compared to neighboring districts. However, to remain competitive, the district began looking for ways to offer higher pay.
Because of rising operational costs, the district determined it is unable to raise pay for employees without more revenue. That revenue would come in the form of a higher tax rate. The higher rate will increase the average taxpayer's bill by about $219 and bring in an estimated $32 million. However, RRISD will pay about $15 million back to the state through recapture.
The additional revenue would raise starting teacher pay from $56,750 to $58,000 and address pay compression throughout the district.
The framework
Because the Texas Education Agency designates RRISD as a “property-rich” district, state funding formulas mandate it pays into recapture. “It is a very hard conversation to have with taxpayers,” Chief Financial Officer Ludivina Cansino said in August. “A lot of times when they think, ‘Well, my tax bill is increasing,’ we don’t get to keep all that money.”
Cansino said 63% of school districts in the state passed deficit budgets for the 2026-27 financial year. This is symptomatic of a larger problem, she said, in which state funding has not kept up with the increased cost of operating schools. State-mandated tax rate compression automatically lowers local property tax rates as property values rise.
Consequently, holding a voter-approval tax rate election is the only way for a district to raise additional operational funds without increasing student enrollment or attendance. With about 90% of the district’s budget in payroll, the district would need to reduce headcount to free up funds needed for raises without the passage of the VATRE, staff said.
Zooming out
Like many districts across the state, RRISD officials said the $8.4 billion injected into school funding by the last legislative session has not been a cure to budget woes, as the additional funding came with strict guidelines.
“There will be no additional funding from the state this year to support districtwide pay increases,” Human Resources Chief Eddie Curran said. “Whatever was baked into the 89th legislative session through House Bill 2 is what we get this year.”
HB 2 did provide additional funding for teacher pay at specific experience levels.
A closer look
The district last sought a tax rate election in 2023. That election, which voters approved, also sought additional tax revenue to increase compensation.
Since then, the district has eliminated dozens of positions from its budget each year and cut tens of millions of dollars of expenses, staff said. However, district staff said due to enrollment declines and the basic allotment not keeping pace with inflation, less funding is available.
In the past, when expenses outpaced revenue, the district was able to absorb some deficit budgets by using its fund balance, Azaiez said. However, after years of back-to-back deficit budgets, that cushion no longer exists.
“We cannot afford to tap into our fund balance anymore,” Azaiez said. “We are in a situation where we have to make very difficult decisions like many other school districts are doing in Texas.”
RRISD has also incurred higher costs for insurance claims, a surge in property tax protests and overages from payroll for overtime, Cansino said. This resulted in a balanced budget projection turning into a $23.6 million shortfall for the 2025-26 financial year.
The TEA recommends districts keep 90 days worth of expenses in fund balance for financial accountability scoring. With an estimated $43.2 million in its fund balance for FY 2026-27, and an operating budget of $486.1 million, the district has about 32 days of operating expenses in reserves.
Why it matters
The consumer price index measuring the cost of goods has increased 23% over the last five years in the southern U.S., which includes Texas, according to the Bureau of Labor Statistics.
Should the VATRE fail, teachers not included under HB 2 and other employees will not receive pay raises, Anne Drabicky, RRISD chief of public affairs and community relations, said.
Additionally, the district is discussing proposals to increase employee contributions to their healthcare plans, raising premiums. RRISD can no longer afford to offset this cost to employees, Curran said.
“Now, not only do we have to work to get a 2% increase through the VATRE, we have to pay more money for healthcare,” Conrad said.
