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Tax Ratification Election

What is a TRE?

The state of Texas funds school districts based on a series of formulas that take into account our local tax rate; specifically the higher the local M&O tax rate the more funding we receive from the state of Texas. Therefore, each additional dollar generated by the local tax rate on the M&O side yields more funding from the state than a dollar generated on the I&S side.

Local taxes are collected and go into two different funds or pockets:  Maintenance and Operations (M&O), and Interest and Sinking (I&S).  The M&O pocket pays for the everyday operations of the district like salaries, books, buses, and building maintenance. While the I&S pocket is similar to a mortgage and can only be used to pay the debt on school building bonds.

School districts are funded through different sources:  Local tax dollars, State funding, and Federal funding. 

A Tax Ratification Election (TRE) is a special election, called by the Board of Trustees, asking the voters to approve a tax rate that is above the $1.04 Maintenance and Operations (M&O) tax rate allowed by state law.

How will the TRE affect my taxes?

Our current tax rate is $1.04 on the M&O side and $0.085 cents on the I&S side for a total tax rate of $1.125 for every 100 dollars a property is worth. Because the school district wants to raise their M&O tax rate over a $1.04, the state of Texas requires voter approval. By law, the maximum M&O tax rate is $1.17.    

Simms ISD has opted to increase the M&O tax rate to $1.17 and REDUCE the I&S tax rate to $0.00.

This shift in pennies will bring Simms ISD an additional $300,000 annually in State Funding with only increasing your tax rate $0.045.

Normally, it would take a $0.30 tax rate increase to generate this $300,000 annually. In this case we are able to do this with just a four and one-half cents increase.