A collaboration between Lewis McLain & AI
For six years, Texas school districts lived with a ballot rule they considered unfair and worked around at the margins. House Bill 3 in 2019 required every school bond proposition to carry the statement “THIS IS A PROPERTY TAX INCREASE.” Districts complied, but a number of them softened the blow — appending explanatory phrases, adjusting placement, letting the required language sit somewhere down in the body of a long proposition where a voter scanning quickly might not register it.
That era ended on May 24, 2025.
Senate Bill 1025 of the 89th Legislature rewrote Section 52.072(e) of the Election Code. Senate Bill 506 added a facial-neutrality requirement effective September 1, 2025. And on July 30, 2025, the Public Finance Division of the Texas Attorney General’s office issued a letter to all bond counsel that reads less like guidance and more like a door closing.
Put the three together and something structural has changed in how Texas asks voters to approve debt and tax rates. Districts have almost no discretion left over the wording that matters most — and the enforcement mechanism means the question is not even close.
What Senate Bill 1025 Actually Did
The amended statute requires that a ballot proposition seeking voter approval of the imposition or increase of a tax must include, at the top of the proposition, in capital typewritten letters of the same font size as the rest of the proposition, the statement “THIS IS A TAX INCREASE.”
Read that clause slowly, because every phrase is doing work.
At the top of the proposition. Not somewhere within it. The warning leads. A voter cannot reach the purpose language without passing the statement first.
In capital typewritten letters. No discretion on case.
Of the same font size as the rest of the proposition. This one is easy to miss and it is the sharpest edge in the bill. Before SB 1025, a district could satisfy the requirement with the statement rendered smaller than the surrounding text. Now it must match the body size.
And SB 1025 went further: the remainder of the proposition must be printed in mixed-case typewritten letters. Lower case except for the first word of a sentence, proper nouns, and the like. The practical effect is that “THIS IS A TAX INCREASE” becomes the only capitalized text in the entire proposition. It is visually isolated by operation of law.
The Attorney General Extended It to Bonds
Here is where the July 30 letter matters.
Section 52.072(e) speaks to propositions seeking approval of a tax increase. One could argue a bond proposition seeks approval to issue debt, not to raise a tax. The Attorney General rejected that reading.
The letter reasons that by conforming Section 52.072(e)(1)(B) of the Election Code to Section 45.003(b-1) of the Education Code — the 2019 school-bond provision — the Legislature indicated its intent that the rule applies to all ballot propositions seeking voter approval of the imposition or increase of a tax, including when such a proposition seeks approval to issue tax bonds.
The AG then supplies the compliance path: school districts satisfy both statutes together by placing “THIS IS A PROPERTY TAX INCREASE” at the top of the proposition, in capital letters at matched font size, with the remainder in mixed case.
There is a small drafting detail worth knowing. The word “PROPERTY” is required only for school district ad valorem tax bonds under Section 45.003(b-1). Other issuers — cities, counties, junior college districts, water districts — use the shorter “THIS IS A TAX INCREASE.” The AG notes this explicitly, observing that the omission of “PROPERTY” from the Election Code version signals that the rule reaches taxes other than ad valorem.
And Then It Closed the Workaround
The fourth section of the letter is the one that ends the conversation.
The AG observes that since Section 45.003(b-1) took effect, several school districts have qualified the required statement with phrases such as “REQUIRED STATEMENT FOR ALL SCHOOL DISTRICT BOND PROPOSITIONS PURSUANT TO SECTION 45.003, EDUCATION CODE.”
You can see the appeal. The added phrase tells a voter, in effect, do not read too much into this — the state makes us say it. For a district cutting its debt service rate while asking for new authorization, that framing feels like simple accuracy.
The AG’s response, quoting its own July 3, 2020 guidance: prescribed language is strictly construed; therefore, school districts may not modify, supplement, or qualify this mandatory ballot language.
Then the new hook. Effective September 1, 2025, such language may also violate Section 52.072(g) of the Election Code, added by Senate Bill 506, which requires a proposition to substantially submit the question with such definiteness, certainty, and facial neutrality that the voters are not misled.
That is a meaningful escalation. Under the old regime, qualifying the statement was non-compliance with a formatting rule. Under the new one, it is potentially a facial-neutrality defect going to the validity of the proposition itself.
Why This Is Checkmate and Not Merely Check
A skeptic could ask: so what? Statutes get ignored. Who enforces this?
The answer is that Texas built the enforcement mechanism a century ago and it has nothing to do with litigation.
Government Code Section 1202.003 provides that before the issuance of a public security, the issuer shall submit the public security and the record of proceedings to the attorney general. Only if the attorney general finds that the security has been authorized to be issued in conformity with law does the AG approve it and deliver the approving opinion to the comptroller.
The phrase “record of proceedings” is defined to include the issuer’s proceedings relating to authorization. Where the enabling law required an election as a condition precedent, the AG requires proof that the condition was satisfied. The election order and the ballot go into the transcript.
So consider what happens to a district that gets creative with proposition wording, wins its election, and then tries to sell bonds.
Nothing happens. That is the point.
There is no lawsuit, no injunction, no contested hearing. The transcript goes to Austin, the Public Finance Division reviews it against the very guidance it published, and approval is withheld. What the district holds is authorized-but-unissued paper that cannot be monetized. The voters said yes and the bonds still do not exist.
The Provenance Detail That Forecloses the Ignorance Defense
The July 30 letter states that it is provided pursuant to authority under Section 402.044 of the Government Code, which requires the AG to advise the proper legal authorities regarding the issuance of bonds that by law require the Attorney General’s approval.
Sit with that for a moment.
This is not a think-tank white paper or a trade association bulletin. It is the office that holds the approval pen, publishing its construction of the statute in advance, addressed specifically to the bond counsel who draft election orders.
A district that deviates cannot claim surprise. Neither can its counsel.
Which points to the real gate. In practice, the Attorney General is the backstop, not the checkpoint. Bond counsel would decline to render the approving opinion long before any transcript reached Austin. No firm in the Texas public finance bar is going to stake its name on a proposition format the AG has already said it will reject.
What Is Actually at Risk
The final piece explains why no district would attempt this even if it thought it could win.
Once a public security is approved by the Attorney General, registered by the Comptroller, and delivered against payment, it becomes valid and incontestable for all purposes — challengeable only on narrow grounds such as an alleged constitutional defect. The AG’s certificate is admissible as conclusive evidence of validity.
That incontestability is not a legal nicety. It is a pricing input.
It is a substantial part of why Texas school district paper trades where it does, and it stacks on top of the Permanent School Fund guarantee. To take one current example, McKinney ISD’s Series 2026 refunding bonds priced at Aaa and AAA on the strength of the PSF guarantee, with underlying ratings of Aa1 and AA+.
A district that jeopardizes AG approval is not risking a delay. It is risking the legal status that makes the debt sellable at all. Nobody trades hundreds of millions of dollars of issuance capacity for softer ballot wording. The math is not close.
Where Discretion Actually Survives
To be fair to the districts, the ballot is not entirely locked. The AG’s letter is careful to preserve Section 52.072(f), which provides that the political subdivision shall prescribe the wording of the proposition in accordance with Subchapter B of Chapter 1251 of the Government Code. Section 52.072(e), the letter says, applies in addition to that requirement.
So three levers remain.
Descriptive purpose language. The district still writes what follows the warning. Whether a proposition reads “school renovations, safety and security upgrades, and career and technical education facilities” or something drier is a drafting choice. This is the largest legitimate lever and it is entirely conventional.
Number of propositions. Education Code Section 45.003(g) forces separation only for specific facility types — stadiums, performing arts facilities, natatoriums — plus technology. Everything else may be consolidated. Because each proposition carries its own mandatory warning, four propositions produce four warnings and eight would produce eight. McKinney ISD once bundled a very high-dollar football stadium with replacing HVAC systems and school building roofs. Cities and counties can’t do that. And now, ISDs are blocked from the tactic to vote up or down on controversial big-ticket items and basic building care.
That creates a genuine tension worth naming. A district that consolidates minimizes the number of tax-increase statements on the ballot and simultaneously reduces the granularity voters get. Fewer warnings and finer voter choice are opposing objectives. No district can optimize both, and how a board resolves that tension is a legitimate subject for public discussion.
Everything off the ballot. The Voter Information Document required by Section 1251.052(b), the district website, the FAQ, the sample-ballot posting — all of it can explain a declining tax rate in full, which is exactly what the ballot forbids.
But that lever comes with its own boundary. Election Code Section 255.003 prohibits the use of public funds for political advertising, and the line between informational and advocacy is where districts get into trouble. In November 2025, Judson ISD drew an Attorney General electioneering complaint during early voting. Canyon ISD was criticized for promoting its tax rate election on a tax-funded website. Both measures failed. Advocacy belongs with a political action committee spending private money, and the distinction is not a technicality.
The One Proposition the Gate Does Not Cover
There is an asymmetry here that deserves attention, because it cuts against the tidy conclusion.
The Attorney General approval gate applies to bonds. It does not apply to a voter-approval tax rate election. A VATRE ratifies a tax rate, not a security. Nothing goes to Austin. The only check is an election contest under the Election Code — slower, privately financed, and considerably weaker.
And yet the VATRE ballot is arguably the most locked-down proposition in Texas law.
Section 26.08(b) of the Tax Code prescribes the sentence verbatim: “Ratifying the ad valorem tax rate of ___ in (name of school district) for the current year, a rate that will result in an increase of ___ percent in maintenance and operations tax revenue for the district for the current year as compared to the preceding year, which is an additional $___.”
Three blanks, all computed, none of them framing. The percentage and dollar figures come out of the Form 50-859 worksheet. There is technical judgment in a maintenance-and-operations revenue calculation, but it is audited arithmetic, not messaging.
So the Legislature locked down the unpoliced proposition by drafting it word for word, and locked down the policed ones by putting the Attorney General at the door. Different mechanisms, same destination.
The Structural Problem Nobody Has Solved
Here is what makes this more than a compliance story.
The mandatory warning is accurate in some cases and misleading in others, and the statute cannot tell the difference.
Consider a district that adopts a voter-approval tax rate election raising its maintenance-and-operations rate by roughly a penny while simultaneously cutting its interest-and-sinking rate by five cents. The total rate falls. Every homeowner whose appraised value holds steady pays less. And every proposition on that ballot — the tax rate election and each bond question — opens with a capitalized statement that this is a tax increase.
On the tax rate election, the statement is defensible. The maintenance-and-operations rate genuinely rises and maintenance-and-operations revenue genuinely increases. Truth-in-taxation law has always treated revenue growth as an increase regardless of what happens to individual bills, and there is a coherent argument for that convention.
On the bond propositions, where the debt service rate is coming down, the statement is harder to defend as informative. New authorization does create a new obligation, and reasonable people can argue that voters should be told so in the strongest terms. But a voter reading “THIS IS A PROPERTY TAX INCREASE” above a proposition financed by a falling rate is not receiving a precise signal.
And the ballot offers no reference point. It states the proposed rate. It does not state last year’s rate. A voter sees a number, sees a warning, and has no way to compare the two without outside information.
That is a design choice, and it was made deliberately. Whether it produces better-informed voters or merely more suspicious ones is an empirical question the Legislature has not tested.
What the Record Suggests
The empirical picture is mixed enough to resist easy conclusions.
An Austin American-Statesman analysis of 55 school districts holding tax rate elections found that 58% failed and roughly 42% passed. In November 2025, five San Antonio-area districts held voter-approval tax rate elections and only Boerne passed, narrowly. Schertz-Cibolo-Universal City failed by an even smaller margin. Canyon ISD’s measure failed with 59% voting against.
In November 2024, Frisco ISD voters rejected all four propositions on their ballot — a tax rate election and three bond propositions totaling more than $1 billion — despite substantial district promotion and organized local opposition.
But the same November 2025 cycle saw dozens of districts pass more than $10 billion in bond authorizations statewide. Grapevine-Colleyville passed its tax rate election with 58% approval. Austin ISD passed one in 2024 that added $41 million annually. The warning is a headwind, not a wall.
Turnout may matter more than typography. District officials in several failed elections observed that placing a local measure on a high-turnout general election ballot brings out voters unfamiliar with district finance. The November 2025 constitutional amendment election drew roughly 14% turnout statewide. A general election in an even year with a U.S. Senate race on the ballot can run several times that, and the marginal voter reads the ballot cold.
There is a counterweight worth noting: property under the over-65 and disabled tax ceilings is insulated from rate increases entirely. In many districts that is a meaningful share of taxable value and a highly reliable voting bloc. The ballot does not tell those voters they are insulated either.
What This Means Going Forward
Four things follow.
First, the ballot is settled. Districts should stop treating proposition wording as a communications problem. Six elements are locked — the statement, its placement, its case, its font size, the prohibition on qualifying it, and the computed blanks in a tax rate election. Energy spent there is wasted, and worse, it is risky.
Second, the timeline moved up. If the ballot cannot explain a falling tax rate, voters must arrive already knowing. That is a spring-and-summer information effort, not an October campaign. By the time the sample ballot posts — not less than 21 days before election day — the argument is either made or it is not.
Third, volume is not the answer. Frisco promoted aggressively in 2024 and lost everything. Judson and Canyon drew complaints for how they promoted and lost too. The lesson is not to spend more from the public purse; it is to be scrupulous about the line between information and advocacy, and to let a political action committee carry the rest.
Fourth, proposition architecture is now a substantive decision. Because each proposition carries its own warning, the choice of how many to put on the ballot is simultaneously a choice about voter granularity and about how many times a voter reads the word “increase.” Boards should make that trade-off consciously and explain their reasoning. It will be noticed either way.
A Closing Observation
I have watched Texas municipal finance since 1972, starting as budget director for the City of Garland. Ballot language fights are not new. What is new is the combination.
A prescriptive formatting statute. A facial-neutrality standard with teeth. Pre-published guidance from the office holding the approval authority. And an approval gate that converts non-compliance into unissuable debt rather than into litigation a district might survive.
Any one of those is manageable. Together they are not a rule that districts navigate. They are a rule that districts obey.
Whether that produces better public decisions is a separate question, and an open one. The Legislature has decided that a voter facing a bond proposition should be told, in capital letters, before anything else, that a tax increase is at stake. Districts that believe their particular facts are more complicated than that now have exactly one place to make the case, and it is not the ballot.
Checkmate.
Well, unless school districts put on a full blown campaign today to prepare the voter of the truth about the state’s corner ISD boards are painted into. It is unfair by almost every reasonable yardstick.
Now, time for a pop test:
Here’s the closing block. Reconstructed format, SB 1025 compliant — statement at top, capitals only there, everything else mixed case.
Try It Yourself
Enough theory. Here is what a McKinney ISD voter will see on November 3, reconstructed from the statutes and the district’s adopted propositions. The formatting is not stylistic license — it is what SB 1025 requires.
McKINNEY INDEPENDENT SCHOOL DISTRICT PROPOSITION A
THIS IS A TAX INCREASE
Ratifying the ad valorem tax rate of $1.0664 per $100 valuation in the McKinney Independent School District for the current year, a rate that will result in an increase of ____ percent in maintenance and operations tax revenue for the district for the current year as compared to the preceding year, which is an additional $__________.
☐ FOR ☐ AGAINST
McKINNEY INDEPENDENT SCHOOL DISTRICT PROPOSITION B
THIS IS A PROPERTY TAX INCREASE
The issuance of $430,950,000 of bonds by the McKinney Independent School District for the construction, acquisition, renovation and equipment of school buildings in the district, including two new elementary schools and a career and technical education facility, the purchase of school buses, and the levying of a tax sufficient to pay the principal of and interest on the bonds and the costs of any credit agreements executed in connection with the bonds.
☐ FOR ☐ AGAINST
McKINNEY INDEPENDENT SCHOOL DISTRICT PROPOSITION C
THIS IS A PROPERTY TAX INCREASE
The issuance of $62,000,000 of bonds by the McKinney Independent School District for the purchase of new technology equipment, other than equipment used for school security purposes, and the levying of a tax sufficient to pay the principal of and interest on the bonds and the costs of any credit agreements executed in connection with the bonds.
☐ FOR ☐ AGAINST
McKINNEY INDEPENDENT SCHOOL DISTRICT PROPOSITION D
THIS IS A PROPERTY TAX INCREASE
The issuance of $4,500,000 of bonds by the McKinney Independent School District for the renovation and equipment of a natatorium, and the levying of a tax sufficient to pay the principal of and interest on the bonds and the costs of any credit agreements executed in connection with the bonds.
☐ FOR ☐ AGAINST
McKINNEY INDEPENDENT SCHOOL DISTRICT PROPOSITION E
THIS IS A PROPERTY TAX INCREASE
The issuance of $2,550,000 of bonds by the McKinney Independent School District for the renovation and equipment of stadiums, including turf and track replacement, and the levying of a tax sufficient to pay the principal of and interest on the bonds and the costs of any credit agreements executed in connection with the bonds.
☐ FOR ☐ AGAINST
Five propositions. Five capitalized warnings. Nothing anywhere on that ballot tells you the district’s adopted rate last year was $1.1043, or that the total rate under all five propositions would be $1.0664 — three and a half cents lower.
Nothing tells you the interest and sinking rate is proposed to fall five cents while the maintenance and operations rate rises about a penny.
Nothing tells you that the district’s average annual debt service requirement through 2044 is $27,466,110, an obligation covered by a rate of $0.0919, while the district currently levies $0.3700 for debt.
Insult to Injury
And there is one more thing the ballot will not tell you, though the statute guarantees a number will appear. Proposition A must state the percentage increase in maintenance and operations tax revenue and the additional dollars raised. McKinney ISD is an excess local revenue district under Chapter 49 of the Education Code, satisfying recapture (“Robin Hood”) through the purchase of attendance credits — an arrangement its voters made permanent at the May 1, 2021 election.
The district reports the tax rate election would generate approximately $9,100,000 in additional maintenance and operations revenue, of which roughly $4,100,000 stays in McKinney. The remaining $5,000,000 goes to the State of Texas. That is 54.95 percent of the money, sent to Austin off the top, and the district keeps about forty-five cents of every dollar its own taxpayers approve. Here is where the drafting turns cruel: Section 26.08(b) measures maintenance and operations tax revenue, not revenue net of recapture.
The figure printed on the ballot, directly beneath the words THIS IS A TAX INCREASE, will be the gross amount — the larger number, the one the district never receives. A voter is warned in capital letters about revenue the district does not get to keep, and nothing in the prescribed language permits anyone to say so.
All of that is true. None of it is permitted on the ballot. And under the Attorney General’s July 30, 2025 letter, a district that tried to add it would risk the propositions themselves.
So here is the question I would put to any Texas voter, and particularly to the one who came to the polls for the Senate race and the state propositions and found five school district questions waiting at the bottom of the ballot:
What is your reaction to this ballot? If you walked in to vote mostly on state and federal issues, would you have voted for any of these five propositions — and would anything you just read have changed your answer?
I am not asking how you would vote on the merits of McKinney ISD’s building program. That is a separate argument, and a legitimate one on both sides. I am asking a narrower question: did this ballot give you what you needed to decide?
Because whatever your answer, that ballot is now the law in Texas, and it is not going to change before you get there.
One caution to include if you’re publishing before mid-October: the purpose clauses are my reconstruction from statutory categories. MISD’s exact wording is in the August 10 election orders, and the sample ballot posts roughly October 13. I’d add a one-line note so a reader who compares them later doesn’t find a discrepancy you didn’t flag.
Sources: Senate Bill 1025 and Senate Bill 506, 89th Texas Legislature; Texas Election Code Sections 52.072(e), 52.072(f), 52.072(g), 255.003; Texas Education Code Sections 45.003(b-1) and 45.003(g); Texas Tax Code Section 26.08(b); Texas Government Code Sections 402.044, 1202.003, 1202.006, 1251.052; Office of the Attorney General, Public Finance Division, All Bond Counsel letter dated July 30, 2025 (Leslie Brock, Assistant Attorney General, Chief, Public Finance Division); Office of the Attorney General, All Bond Counsel letter dated July 3, 2020; Austin American-Statesman analysis of tax rate election results; Texas Public Radio and Texas Scorecard reporting on November 2024 and November 2025 election results.
Note: the Attorney General’s July 30, 2025 letter states that it does not dictate how a court may rule in a legal proceeding. It reflects the Attorney General’s construction of the statutes, which is controlling in practice because the Attorney General approves the bonds, but it is not a judicial holding.
This blog is the writer’s understanding of the current requirements. He is not an attorney, and the reader is advised to seek advice from a local governments City Attorney or Bond Counsel.