HISD versus HCAD

One way or the other, this will lead to a bad outcome.

The Houston school board voted Thursday to sue the state comptroller's office if the school district loses its appeal over rising property values.

The Houston Independent School District argues that Comptroller Susan Combs' office overvalues property and that the discrepancy is costing the district state funding -- an estimated $3 million last year, according to HISD.

Combs' office counters that the property in HISD, particularly commercial buildings and apartment complexes, is being undervalued by the Harris County Appraisal District.

The school district's appeal is pending before a state hearing examiner.

[...]

The discrepancy is wide. The Harris County Appraisal District put the value of property in HISD at $97.6 billion in 2007. According to the comptroller, the value is $110.7 billion.

Harris County Tax Assessor-Collector Paul Bettencourt said the problem stems from the local appraisal district using a different method than the comptroller's office. And, he added, school districts are penalized under the comptroller's system when property owners protest their bills and are granted relief.

[...]

The comptroller's office is charged with studying property values across Texas to keep local appraisal districts in check and to ensure school districts get the appropriate amount of state aid. To equalize school funding statewide, those districts with higher property wealth are supposed to get less state funding.

HISD already has appealed the comptroller's 2007 property assessment to the comptroller's hearing examiner. The preliminary ruling by the examiner, Michael Esparza, was generally favorable to HISD, said Houston attorney Robert Mott, who is representing the school district.

The comptroller's office and HISD have until today to raise exceptions to the ruling before the hearing examiner issues a final opinion.

As we've discussed before, I believe HCAD underappraises commercial properties, as do most appraisal districts, which means that homeowners are paying a disproportionate share of the property tax burden. Unfortunately, if HCAD were closer to the mark, the screwy school finance system would deem HISD a "rich" district and subject it to recapture. It's a nasty little problem, and one that doesn't really have a solution under the current configuration of our state government. Maybe with a better Legislature, we can make a genuine effort to fix school finance, and eliminate conundrums like this. You can help with that.

Posted by Charles Kuffner on June 21, 2008 to Budget ballyhoo