HISD weighs paying state
Voters must approve $160M bill or top-value properties’ taxes could go to poorer districts
The Houston school board is expected to vote Thursday to call an election asking voters for approval to send about $160 million to the state next year because the district is considered too property wealthy.
Even if the board calls the election, to be held Nov. 8, board members may want voters to defeat the measure.
It’s a complicated scenario for the Houston Independent School District.
If voters say “no” to sending the money to the state, the Texas education commissioner then has the power to detach the school district’s highest-value properties and to assign them to property-poor districts. That means owners of these properties — likely downtown high-rises — would be paying taxes to another school district.
The detachment, however, would not be immediate. The commissioner’s actions would not take effect until July 3, 2017, according to a timeline spelled out in a Texas Education Agency manual.
The Houston school board’s attorney, David Thompson, said during a board meeting Monday that the state Legislature reconvenes in January, before the education commissioner would act. That timeline would give lawmakers the opportunity to adjust the school-finance system if they
wanted to do so, Thompson said.
Leaving the district’s fate to lawmakers could be a gamble, as Houston board member Mike Lunceford said Monday. If the Legislature leaves the schoolfunding system alone and the education commissioner takes property from HISD, then the district loses those buildings for all taxing purposes — even to repay debt. The loss would hit hard amid the district’s ongoing $1.9 billion construction program, funded by a voter-approved bond referendum in 2012.
Chapter 41 status
Detachment by the commissioner would be unprecedented.
HISD has a few other options under law, but most require agreements from other school districts and are not feasible, according to Thompson and Austinbased school-finance consultant Joe Wisnoski, who previously worked at the Texas Education Agency.
The whole situation stems from the Houston school district for the first time tipping into so-called Chapter 41 status, deemed so property wealthy that the state is supposed to “recapture” funds from the district to share with poorer school systems. The district would have to start paying the state in February, if voters approve the recapture measure.
Houston-area districts that paid recapture last year included Galveston, Spring Branch, Deer Park and Sheldon. Galveston ISD paid the most among those: $12.3 million.
Galveston voters rejected the “recapture” proposition in 2006. That district got temporary, atypical relief from the state, but then had to call an election again and won voter approval that time.
HISD officials argue that while Houston has significant property wealth, about three-quarters of the students in the school district come from low-income families.
Reviewing recapture
HISD board member Greg Meyers called a school-funding system that punishes the state’s largest district “criminal.”
“You can count on it that I will speak my mind,” Meyers said, adding later that he is conflicted about how people should vote. He said he has “serious angst” about having to send money to the state but is concerned the district could lose property for taxing purposes to repay bonds if the education commissioner is forced to act.
Houston board member Harvin Moore said that he expects voters will say “hell no” to sending money to the state, once informed on the matter.
In June, Texas House Speaker Joe Straus, R-San Antonio, called on a legislative committee to study ways to reduce the state’s reliance on recapture and specifically noted Houston’s situation. However, fixing recapture could be costly, and conservative lawmakers have been reluctant to pour more money into public education.
Adding to the confusion would be the ballot item language, spelled out under state law, that HISD would have to use. It would not mention “recapture” or the $160 million that voters would be asked to approve sending to the state, but would ask for authorization “to purchase attendance credits from the state with local tax revenues.”