by Andrew Lindsey

Texans are very hands-off when it comes to taxes. Unlike many other states, Texas has no state personal income tax, property tax, or inheritance tax, and local taxes are not allowed to exceed low percentages of the state taxes that do exist. In addition, all local taxes are subject to further taxpayer protections collectively referred to as “Truth in Taxation” laws, which is a combination of state constitutional and statutory provisions that restrain local governments from raising taxes through accountability mechanisms such as requiring notice of higher tax proposals and the holding of public hearings for citizens to question and oppose proposed tax increases.

School boards are just one of the many kinds of local government entities that Texans support through their taxes. Even if one does not work for a local school or send children there, it is obvious that the maintenance of a public school system is one of the most important (and expensive) government functions for any community. Perhaps for this reason, Texas law treats the process for setting school district tax rates differently than other local tax rates. Truth-in-taxation requirements were expanded for school districts during the 79th Texas legislative session through an initiative originally contained in House Bill 1006, and eventually incorporated into House Bill 1. This initiative both lowered the tax rate that school districts would be allowed to charge in the future, and made it more difficult to increase those rates above what was charged in the preceding year. One component of this increased difficulty (in addition to notice and public hearings) is that school districts must hold a district-wide election for the approval of tax rates which exceed the statutory default rate by a certain amount of cents. If a simple majority of voters support the new tax rate, then the district may adopt it. These elections are known as “tax ratification elections” (or TREs). Continue reading