Leaders urge ‘no’ on HISD ballot measure

City, school leaders hope strategy will spur state revamp of funding system

City and HISD officials are asking voters to reject a ballot measure that would send $162 million in tax dollars to fund poorer districts.

As one Houston school board member sees it, the district’s November ballot measure regarding the state-mandated forfeiture of local tax dollars offers no good choice for voters.

“Do you want to be shot in the head or stabbed in the back? Both are not pleasant,” trustee Mike Lunceford said of the options.

The Houston Independent School District has been deemed so property wealthy that for the first time it must forfeit local property tax revenue — an estimated $162 million next year — to the state to help fund poorer districts. By Texas law, however, the district first needs voter approval to send away the money. The Houston district’s estimated recapture payment is expected to increase to $257 million in 2018 and to top $1 billion over four years.

The idea of willingly giving local property tax dollars to the state — especially when three-quarters of HISD students come from low-income families — is unacceptable to Mayor Sylvester Turner and other leaders who are urging voters to oppose the Nov. 8 ballot measure. The opposition strategy is an admitted gamble that lawmakers will be persuaded to revamp the state’s school-funding system in the 2017 legislative session.

“The Legislature moves when its back is up against the wall, especially on big issues,” Turner, a former legislator, said this week.

The bet, of course, may not pay off. For one, Lt. Gov. Dan Patrick, a Republican from Houston, does not support the opposition’s approach.

“If the HISD board doesn’t like the current school-finance system, they should come to Austin to work constructively to change it,” Allen Blakemore, a spokesman for Patrick, said in a statement to the Houston Chronicle. “Instead they lead their voters to make a political statement at a significant cost to the taxpayer.”

Even if the ballot measure fails, the state still would be entitled to the Houston school district’s money, but would have to obtain it another way: The education commissioner would assign the priciest commercial property in the district to property-

poor school systems for taxing purposes.

Under that detachment option, the Houston school district would take a bigger financial hit — an estimated $30 million more next year, on top of the $162 million. The extra loss would stem from the district not being able to tax the detached property for the purpose of paying down debt — a scenario that likely would lead to a small tax rate hike for homeowners and the remaining commercial owners.

The state’s so-called Robin Hood or “recapture” system, in place since 1993, was designed to even out funding across public school districts statewide with varied levels of property wealth. At the outset, fewer than three dozen districts were deemed property wealthy, and they paid a total of $131 million to the state.

Program balloons

Last school year, of more than 1,000 districts, 230 paid nearly $1.6 billion. The Houston-area districts that paid include Barbers Hill, Deer Park, Galveston, La Porte, Sheldon, Spring Branch and Texas City.

The recapture program has ballooned as local property values have increased, and the state has increasingly relied on that money, instead of other revenue — such as sales tax — to pay for public education.

Former state Rep. Scott Hochberg, widely considered an expert on school funding, said lawmakers never intended for so many districts to have to pay through the recapture system. Although he thinks more cash should be injected into the public schools, Hochberg said he disagrees with lobbying for the Houston ballot measure to fail.

“Districts with far more political influence than HISD have been paying recapture for years, and that hasn’t forced a major change,” Hochberg wrote in an opinion piece for the Chronicle.

House Speaker Joe Straus, R-San Antonio, cited Houston’s new recapture status as part of his charge in June asking his colleagues to study school financing. However, getting lawmakers to agree to changes to education funding is typically an uphill battle. The state budget is expected to be tight this year, and Patrick has been focused on voucher-like programs that would help finance private school or home-school education.

Lessening the pressure, the Texas Supreme Court ruled in May that the school-finance system was constitutional, though flawed. Some 600 districts, including Houston, had sued the state in 2011.

Bob Stein, a Rice University political science professor, said the recapture ballot measure is so confusing he gave up on trying to poll Houston voters on whether they supported or opposed it.

As a general rule, Stein said, people are more likely to vote against propositions if they’re not sure which option to pick. Yet, he estimates between 15 percent and 25 percent of voters will skip the Houston measure because it’s far down on the ballot.

‘Halfway decent’

Called Proposition 1, the ballot item asks whether voters authorize the Houston school board “to purchase attendance credits from the state with local tax revenues.” The language is mandated by state law.

A vote “for” the measure authorizes HISD to send the $162 million recapture payment to the state next year. It also authorizes future payments.

The district should be able to cover part of the recapture payments thanks to annual growth in local property values, but more budget cuts are expected, HISD budget manager Glenn Reed said.

This school year, with the $162 million recapture payment looming, the district’s budget shortfall was $95 million. To close the hole, the school board approved numerous cuts, including a $40 million decrease to campuses.

Turner has criticized the ballot language as misleading and suggested it could be challenged in court, just as the city was sued in 2015 over its measure concerning term limits. He added that “any half-way decent attorney” could sue on behalf of commercial property owners if their property was sent to another school district. Campaign advertising urging opposition to the ballot measure states that the proposition “is about shutting down neighborhood schools.”

The Houston district has not released how much money it would have to cut from the budget in future years because of recapture.

“We have to make the natural assumption that some of the schools are going to close, some of the programs are going to go away,” said Jeri Brooks, spokeswoman for the vote “against” campaign.

The state never has had to resort to property detachment for taxing purposes. Galveston voters rejected that district’s recapture proposition several years ago, then approved it in a future election.

The Houston school district could hold another election in May — five months into the legislative session — if necessary.