The Ysleta Independent School District is asking voters to allow it to raise its tax rate beyond what is allowed by the state to save it from a dire financial status – a proposition which if approved would have little to no impact on the vast majority of homeowners’ tax bills.
The YISD Board of Trustees voted unanimously Wednesday to call for a voter-approval tax ratification election, or VATRE, in November that would generate up to $5.5 million a year by shifting some of its property tax revenue — currently earmarked for repaying debt — toward daily operations.
YISD Superintendent Xavier De La Torre said, if approved, the proposal could help the district address a multi-million-dollar deficit that nearly depleted the district’s savings and potentially help rebuild it.
“Balancing a budget will not solve our problem. We actually have to have a surplus. We have to have extra money at the end of the year,” De La Torre told El Paso Matters before Wednesday’s board meeting.
Trustees voted unanimously to approve a tax rate of $1.19 per $100 property valuation — higher than the $1.15 voter-approval rate it could have adopted without going to voters. That triggered the call for the VATRE election, which if rejected, would force the board to adopt the lower rate.
The proposal would shift 3 cents from its debt rate to its operations rate, also known as a “penny swap.”
The no-new-revenue rate, which would generate the same amount of revenue as the previous year on the same properties, is $1.25 per $100 valuation.
Tax bill impact
Most of the voters eligible to decide on the proposal wouldn’t be impacted by the outcome because they pay no school property taxes, an El Paso Matters analysis of data from the El Paso Central Appraisal District shows.
However, businesses and other commercial properties – including Meta, which is developing a $10 billion data center in Northeast El Paso and is expected to become one of the largest taxpayers in the county – would see taxes go up if voters approve the proposed rate.
According to the CAD, more than 26,000 YISD homeowners — two-thirds of all owner-occupied homes in the district — will pay no school tax whether the issue passes or fails because the value of their exemptions exceeds the taxable value of their homes, or they are 100% disabled veterans, who are exempt from all property taxes in Texas.
All homes with homestead exemptions in Texas have a $140,000 exemption, and people over 65 have an additional $60,000 exemption. YISD adds a 20% homestead exemption, the only district in El Paso County to do so.
As a result, any home valued at $175,000 or less in the district won’t owe school property taxes this year regardless of the outcome of the election, and any home owned by someone over age 65 or disabled valued at $250,000 or less is exempt from school taxes. Such homeowners still pay taxes to the city, county, hospital district and community college.
The average market value of a home in YISD this year is $211,000, according to the Central Appraisal District.
The YISD tax bill on an average-value home, which has a taxable value of just over $14,000 after exemptions, would be about $170 if the VATRE is approved.
If it is rejected, the homeowner of that hypothetical home would only save about $6 on their district tax bill.
If approved, a business or commercial property valued at $1 million could pay almost $12,000 in property taxes to the school district; that would drop to about $11,500 if voters reject the tax proposal..
CAD records currently say Meta’s 1,040 acres of land for the data center site has a taxable value of just over $1.6 million; none of the improvements being built on the land currently have a taxable value. If the VATRE rate is approved by voters, the school tax on the land would be $19,476. If voters reject the tax rate, Meta’s tax bill will drop to $18,787, saving the company $689, according to El Paso Matters’ calculations.
Budget changes
De La Torre said the district has already reduced the deficit and plans to continue cutting costs.
YISD, which had less than 33,000 students last year, expected enrollment numbers to drop by about 1,250 students this year. Instead, enrolment only fell by about 900. De La Torre said this will bring in $3 million in additional revenue.
He said the district also plans to offer a separation incentive to 100 employees who are considering retiring or resigning in December, which could cut payroll costs by about $4 million for the current school year.
The tax ratification election will be held Nov. 3, with early voting Oct. 19-30. The last day to register to vote in that election is Oct. 5.
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