HISD proposal simply a matter of pocketbook
Writing check will be cheaper than losing property to the state
A yes vote on HISD Proposition 1 costs less for Houston Independent School District taxpayers than a no vote, with no downside. It’s that simple.
A yes vote would allow the HISD board to write a “recapture” check to the state. That’s bad, but the alternative is worse.
If the district doesn’t pay its bill, the commissioner of education is required to remove enough commercial property from HISD’s tax rolls to reduce the district’s property tax collections by the amount it owes the state.
So HISD loses the recapture money, one way or another, even if it doesn’t actually write a check.
And the state gets its money one way or another, because the taxes from the removed properties will go to a poorer district in Harris County, letting the state reduce its funding to that district.
But here’s the thing: If HISD writes a check to the state, it loses only the amount of the check. But, if the district gives up taxable property, it loses the recapture amount, plus all the bond taxes the district would have collected off that property.
That means the tax rate we all pay for bond payments, now and in the future, has to go up to make up for the taxes lost from the lost property.
And, once the property is gone, it’s gone forever. No take backs or fingers crossed.
State law actually favors districts that send cash. There’s an “early decision” discount available for those districts. A no vote means we pay the full price.
Voting no is like giving away your garage to avoid paying property taxes on your house. That’s why no district in the state has ever chosen the option of having property removed instead of sending a check. It’s a bad deal.
The argument for voting no is that it will “send a message” to the legislature that it needs to fix the school funding system, and the legislature will obey. Maybe, but I served 20 years in the Texas Legislature work-
ing on these issues, and I don’t buy it. It’s not a bet I would make, much less risk HISD taxpayers’ money on.
First, HISD overestimates its influence on the Legislature. It’s just one of more than 1,000 school districts, most of which are far poorer in property per student than HISD. True, it’s the largest, but even so it represents fewer than 5 percent of the students in the state. It’s a large fish, but in a much larger pond. Districts with more political influence have been paying recapture for years, and that hasn’t forced a major change.
And, it’s been no secret that recapture was coming for HISD, yet the Legislature did nothing to avoid it, so it’s not like the Legislature shudders at the thought.
Some say that even if the Legislature isn’t cowed by HISD having to make recapture payments, the prospect of taking property away will have a bigger impact.
That’s a long shot, and the results are unpredictable. Worse yet, some legislators could view it as a “stunt”, so it could have the opposite effect. Nobody knows.
I don’t disagree that the school finance system is a mess. Cuts in state education funding have forced districts to depend more on local property taxes. So, as property values have risen again, more districts are considered “rich,” which is the trap that caught HISD.
The state’s school funding formula has never come close to providing for the cost of educating low-income students and English language learners. When those parts of the formula were created in the 1980s, they were knowingly set at half of what the data showed was needed, as “a start.” Thirty years later, they haven’t changed. If those costs were fully recognized, HISD, which overwhelmingly serves low-income students, would no longer be classified as rich.
Those shortfalls hurt many districts in our area. For HISD, they lead to recapture. For most other districts, which have less taxable property, they reduce those districts’ share of state funding.
Instead of seeking a quick fix for rich districts, HISD would be better off joining with districts that have similar demographics to fight for formula updates, so that HISD would no longer be considered rich.
Fixing these problems will not be easy politically or financially. But gambling on a more expensive option for HISD taxpayers is a poor way to start.