taxesProperty Tax Assistance

Elections to Approve Tax Rate

If the governing body of a taxing unit adopts a tax rate that exceeds the voter-approval tax rate, in most cases it must automatically hold an election for voters to approve the tax increase. 1 For school districts, this is called a tax rate ratification election or TRE. 2 An election permits voting for or against the tax-rate proposition. If the majority of votes are cast in opposition to the adopted tax rate, the election limits the taxing unit's tax rate for the current year to the voter-approval tax rate. 3 There are also tax rate scenarios in which the election is not automatic and, voters in the taxing unit may petition for an election on the tax increase. The election process is different when voters petition for the tax rate election. 4

If required to hold an election to approve the tax rate, the governing body shall hold the election on the uniform election date in November of the applicable tax year. It must adopt the rate no later than the 71st day before the next November uniform election date and the order calling the election may not be issued later than the 78th day before the date of the election. 5

Water districts have different actions that trigger an automatic election or allow for a petition for an election to approve the tax rate. While water districts follow Water Code provisions in most truth-in-taxation matters, they must follow procedures in the Tax Code when it comes to an election. 6

By providing the information below, the Comptroller's office provides technical assistance and not legal advice. Taxing units should consult legal counsel for interpretations of law regarding voter-approval elections.

School Districts

A school district is required to hold an automatic election to ratify a current year's tax rate if it adopts a tax rate above the voter-approval tax rate. 7 The governing body shall order that the election be held in the school district on the next uniform election date prescribed by Section 41.001, Election Code, that allows sufficient time to comply with the requirements of the law. 8

A school district may adopt a budget using a certified estimate. 9 A school district may elect to adopt a tax rate before adoption of a budget using the certified estimate of taxable value. 10 If adopting a tax rate before the budget, the school district must publish notice and hold a meeting for the purpose of discussing the proposed tax rate. Following adoption of the tax rate, the district must publish notice and hold another public meeting before the district may adopt a budget. 11

School districts that adopt a tax rate before adopting the budget based on the chief appraiser's certified estimate of taxable value must order the election to approve the tax rate at least 30 days prior to the election date. 12

More information about election procedures may be obtained from the Election Division of the Texas Secretary of State's Office. The election ballot must contain statutory language that states the voter is voting for or against ratifying the adopted tax rate, rather than limiting the rate to the voter-approval tax rate. 13 While the Comptroller's office provides a Voter-Approval Ballot, school boards should consult legal counsel for guidance.

If a simple majority of the votes cast in the election favor the adopted tax rate, the adopted tax rate stands. 14 If the voters disapprove the adopted tax rate, the governing body may not adopt a tax rate that exceeds the voter-approval tax rate. 15

School districts are not required to hold a tax ratification election if the school district is spending increased revenue to respond to a disaster for the year following the year in which the disaster occurred. Disasters include tornadoes, hurricanes, floods, wildfires or other similar events that affect the school district, but do not include drought. The tax rate adopted is only good for the current year for which the rate is adopted. If a district adopts a tax rate for the amount by which that rate exceeds the district’s voter-approval tax rate for that tax year may not be considered when calculating the district’s voter-approval tax rate for the tax year following the year in which the district adopts the tax rate. For these purposes, a disaster exists only if the governor requests federal disaster assistance for the area. 16

Taxing Units Other Than School Districts and Water Districts

Below are scenarios when a taxing unit other than a school district or a water district is required to hold an election to approve the tax rate:

  • A special taxing unit or a city with a population of 30,000 or more adopts a rate that exceeds the voter-approval rate;
  • Any taxing unit other than a special taxing unit or a city with a population of less than 30,000 regardless of whether it is a special taxing unit adopts a rate that exceeds the greater of its voter-approval rate or de minimis rate. 17

Automatic Election to Approve the Tax Rate

Step 1: Order an election

The governing body must order the election to be held on the uniform November election date for the tax year. It must adopt the tax rate no later than the 71st day before the election date and order the election no later than the 78th day before the election date.

The election ballots must contain statutory language that permits voting for or against a proposition to approve the adopted tax rate. 18 While the Comptroller's office provides a Ballot to Approve Tax Rate, governing bodies should consult legal counsel for guidance.

Step 2: Act on election results

A simple majority is necessary to approve the tax rate in the election. 19 If the tax rate is not approved by a majority of voters, the taxing unit's tax rate for the current year is their voter-approval tax rate. 20

Petition for an Election to Reduce Tax Rate

In only certain circumstances, if a taxing unit other than a school district adopts a tax rate that exceeds the voter-approval tax rate but is less than or equal to the de minimis rate, voters in the taxing unit may petition for an election on the tax increase. 21 The taxing unit’s de minimis rate and adopted tax rate must meet specific requirements. 22 The election process is different when voters petition for the tax rate election.

Step 1: Determine if the petition is valid

The petition must state that it is intended to require an election to reduce the tax rate for the current year. 23 While the Comptroller's office provides a Petition for Election to Reduce-Tax Rate, persons who are considering circulation of a petition for an election to reduce the tax rate or a governing body that is considering the validity of a petition should consult legal counsel for guidance.

The taxing unit's governing body is responsible for determining if a petition for election to reduce tax rate presented to it is valid. Once the governing body determines that a petition is valid, it must adopt a resolution regarding its validity within 20 days of receiving it. If the governing body takes no action within that time, the petition is automatically valid. 24

Step 2: Order an election, if petition is valid.

If the governing body for a taxing unit determines the petition for election to reduce tax rate is valid, the governing body must order an election be held on the next uniform election date that allows sufficient time to comply with legal requirements. 25

The tax rate may not be adopted later than the 71st day and order calling the election may not be issued later than the 78th day before the next uniform election date. More information about election dates may be obtained from the Election Division of the Secretary of State's Office. 26

The election ballots must contain statutory language that permits voting for or against a proposition to reduce the tax rate for the current year from the adopted tax rate to the voter-approval tax rate. 27 While the Comptroller's office provides a Sample Petition Election Ballot to Reduce Tax Rate, governing bodies should consult legal counsel for guidance.

Step 3: Act on election results

A simple majority is necessary to approve the proposal to reduce the tax rate in the election and the tax rate for the current year is the voter-approval tax rate. 28 If the proposal is not approved by a majority of voters, the taxing unit's tax rate for the current year is the tax rate that was adopted by the governing body. 29

Tax collections

If after tax bills for the taxing unit have been mailed, the results of a tax rate election reduce the tax rate, the taxing unit's tax assessor must prepare and mail new tax bills. 30

Refunds

If the taxing unit has begun collecting taxes at the time of the election, some taxpayers may have paid taxes under the original adopted tax rate. If the tax rate is reduced to the voter-approval tax rate, the taxing unit must refund the difference between the taxes paid under the original tax rate and taxes levied under the voter-approval tax rate. 31

A taxing unit sends refunds resulting from an election if the refund amount is $1 or more. If the amount is less than $1, the taxing unit shall refund the difference upon the taxpayer's request. The taxpayer must apply for the refund of less than $1 within 90 days after the date the refund becomes due or forfeit the right to the refund. 32

After 60 days, taxing units must pay interest on refunds. 33 The interest is 1 percent per month, or part of a month, from the date that the election results were certified to the date the refund is mailed. 34