SISD weighs ‘penny swap’ tax rate election to boost revenue
by Claudia Lorena Silva August 8, 2025
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Socorro Independent School District voters may soon be asked to decide whether to allow the district to shift some of its property tax revenue — currently earmarked for repaying debt — toward daily operations and rebuilding its reserves after years of running deficits and spending more money than it took in.
The SISD school board is expected to approve its proposed tax rate Aug. 15, which would trigger a special voter-approval tax rate election, or VATRE, in November that could bring in up to $49.2 million a year.
The proposal would shift tax revenue from debt repayment to operations, meaning the tax bill for property owners would be the same regardless of whether voters approve or reject the proposal. Because the state is expanding the homestead exemption for school taxes from $100,000 to $140,000, most families who live in homes they own will see their school taxes decrease this year.
State law allows school districts, under certain circumstances, to move a portion of their tax rate earmarked for debt repayment to their operations with voter approval. This shift in revenue could slow down a district’s ability to pay its debt.
The financial future of the district may depend on voters approving the tax rate, SISD Chief Financial Officer David Solis said during a 2025 Facilities and Operations Advisory Committee meeting Wednesday.
“What could happen if revenues are not increased substantially as we look forward?” Solis said. “We could see, as we’ve seen, a reduction in student services, further reductions in staffing, no employee compensation increases for the foreseeable future unless there are some additional state revenues.”
The 36-member Facilities and Operations Advisory Committee, which includes district employees, SISD residents, union leaders and Interim Superintendent James Vasquez, was created to help the district develop a financial plan on how to move forward after operating under a budget deficit for several years and depleting its savings.
Even if voters approve the VATRE, also known as a “penny swap,” Solis said homeowners should see a decrease in the school district’s portion of their tax bill after Texas lawmakers increased the homestead exemption from $100,000 to $140,000, and an extra exemption for people over 65 or with disabilities from $10,000 to $50,000. The exemption will go into effect once a constitutional amendment is approved by voters in November and will apply retroactively to 2025 tax bills.
With the exemption, Solis said the average SISD tax bill will decrease by $345 a year on the average home in the district, valued at $232,700 for tax purposes.
Taxing entities such as school districts set tax rates per $100 valuation, meaning what’s charged for every $100 of a home’s value. The tax rate comprises two parts: The rate that pays for maintenance and operations and the rate that pays for debt.
SISD is proposing to shift 12 pennies from the debt rate to the operations rate.
Taxing entities that adopt tax rates that exceed what’s allowed by law – known as the voter-approval tax rate – must automatically hold an election for voters to approve the tax increase. If voters turn down the proposal, the district would have to adopt the voter-approval rate or something lower.
In this case, the voter-approval rate is 94 cents per $100 valuation, while the district is proposing a rate of $1.06.
If approved, the election would be Nov. 4, with early voting Oct. 20-31.
While the penny swap may not impact tax bills, Vasquez told El Paso Matters it could affect the district’s ability to pay off its debt early.
In June, SISD trustees approved a debt services fund with a $7 million surplus, used to pay a defeasance and reduce its bond debt.
“We had done a defeasance to get ahead over the past couple of years; the board had approved that essentially to pay down our debt faster. This wouldn’t necessarily slow it down, but we may not be making the extra payments like we had been previously.”
Health plans, school boundaries and consolidations to be studied
The committee also recommended the district review its employee health care plan and conduct a study of its school building utilization and maintenance needs to develop plans for boundary adjustments, potential school consolidations and long-term infrastructure improvements.
As older areas of the district lose students, Vasquez said the district will likely need to change its feeder pattern boundaries to ensure even enrollment across all its campuses.
“We have a section of our district that’s aging, like the Montwood area and Americas to a certain extent, and their building utilization is down. What we’re considering doing is see if the boundary adjustment might be needed to increase the capacity of each of our schools and to bring some relief to those overcrowded schools in the Pebble Hills and Eastlake areas,” Vasquez told El Paso Matters.
While Vasquez said he does not expect SISD to close or consolidate schools in the near future, the committee is taking a proactive approach to address enrollment declines.
“We don’t want to get caught years down the road where we’re having to shut down schools haphazardly,” Vasquez said. “We just want to have a more thoughtful, pragmatic approach when it comes to addressing these things. So, we do want to engage with our community and look at building utilization, look at the condition of our facilities to have a plan moving forward.”
Claudia Lorena Silva
Claudia Silva was born and raised in El Paso and studied journalism at New Mexico State University. She's covered a number of topics, from education to arts and culture, in both Texas and New Mexico.
