The school board adopted a maintenance and operations (M&O) tax rate for the current fiscal year above the voter-approval tax rate, automatically requiring the school board to call the VATRE for the San Marcos CISD voters to approve (or ratify) the M&O tax rate

.  The school board adopted a $17.2 million budget deficit for the 2024–25 school year. Over the last six years, funding for educational expenses — such as salaries, utilities, fuel, insurance, and other expenses — has not kept up with inflation. Despite Texas’s $33 billion budget surplus, virtually no additional per-student funding was approved during the last 88th Legislative Session. San Marcos CISD has also seen new state mandates without additional funding, such as legal requirements for school resource officers at every campus and accelerated instruction for students. 

Homeowners, ages 65 and older, and those who are disabled would not be affected if voters approve San Marcos CISD's VATRE if they have filed for and received an Over 65 or Older or Disabled Persons Homestead Exemption through their local appraisal district.

The adopted $17 million deficit budget included:

• $3 million on a compensation plan that included market adjustments for many teachers and staff members. 

When a school district collects more revenue on property taxes then the finance formula says they are entitled to, those excess dollars are recaptured. Recapture dollars are intended to help fund less wealthy districts, but currently the funding brought in through recapture helps supplant the required funding from the State for education.  According to the Texas School Coalition, when the state collects more local property tax dollars for state use through recapture, dollars that would otherwise be spent on education are reduced, allowing the state to spend more General Revenue dollars on other priorities instead. In other words, when districts with high property wealth per student pay more in recapture, districts with less property wealth do not benefit by receiving more funding. Recapture payments have grown from about $120 million in 1992 to over $5 billion now.

Currently, SMCISD is not subject to recapture payments.  However, if the District does move into that situation in the future, funds generated from the VATRE are NOT subject to recapture.  That means, those funds would NOT go back to TEA.

It is anticipated that the VATRE would generate an additional $2.8 million if voters were to approve the VATRE not subject to recapture.

Rising prices, competitive compensation and lower attendance rates post-pandemic, all play a role in the school funding challenges across the state. Since 2019, there has been no increase to the basic state allotment — currently $6,160 per student — which is the amount the state allots for each student in a district. According to data released by the state’s Legislative Budget Board (LBB), in 2022, per-student spending in Texas has decreased by $590 in inflation-adjusted dollars over 10 years. The LBB reported that the state share of public education has decreased over the years, while the percentage of local spending has increased.  There has also been an increase in recapture paid to the state by school districts considered to be property wealthy. The state uses these recapture dollars to help balance the rest of the state budget.

The Texas Association of School Boards indicates that these per-pupil dollars include funding that is not provided to school districts nor affects the classroom, including funds to pay down local property taxes and investments in the Teacher Retirement System insurance program.