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Endorsement watch: Against recapture

The Chron recommends a No vote on the forthcoming HISD referendum to authorize recapture.

BagOfMoney

Voters will face a test on Election Day, and whether they answer correctly will determine the future of the Houston Independent School District. It should be a simple question, but it’s written in the obtuse vernacular of lawmakers who really don’t want voters to understand it.

The ballot provision will ask voters to authorize the board of trustees of HISD to purchase attendance credits from the state with local tax revenue. That sounds like a good, progressive measure, but be warned – it is a trick question.

The ballot is really asking whether HISD should submit itself to state recapture and send $162  million in local property tax dollars to Austin. The correct answer is “NO.”

If this misleading ballot provision passes, HISD will not only be required to send $162 million in local property tax dollars to the state next year. The district will also likely face higher annual payments for the foreseeable future under the state’s broken school finance system.

[…]

Technically these recaptured funds are supposed to help schools that need the resources. If the provision worked like a true Robin Hood, it would “rob” from the rich and “give” to the poor. But in reality, the system robs from the poor and gives to legislators so that they don’t have to raise state taxes. There’s no guarantee that poor schools will receive a single extra dime if HISD pays up.

How does this work? Simply put, the state keeps two bank accounts: one for general revenue and one for the recaptured Robin Hood sums. Every dollar that the state pays from Robin Hood frees up general revenue money that the state otherwise would have to spend to help poor schools. So instead of giving extra money to needy districts, any HISD money will essentially be spent on highways, border security or some other appropriation besides education.

If this passes, then HISD is projected to send more than $1 billion of our local property taxes to the state over the next four years. Not only does that hurt HISD, but it looks an awful lot like a state property tax – which is prohibited in the Texas Constitution.

See here and here for the background. I should note that if the referendum goes down and the state takes properties away from HISD, that also has the effect of diminishing HISD’s bonding abilities. Let me quote from a Facebook discussion on Jay Aiyer’s page, with the following coming from Aiyer, who strongly disagreed with the Chron’s position:

I am in no way advocating for the current system. The issue is the basic math behind recapture means that HISD and local taxpayers will lose MORE money by voting against it. Under the recapture system the choice is either make a recapture payment or lose the taxable value of property that would yield the amount in question. In the case of HISD that approaches nearly $18 billion in commercial real estate. There is no third option. The value of that property removed would be lost permanently for M&O and all future debt payment–reducing the debt capacity for the district and increasing the cost of borrowing, shifting that cost to local taxpayers. The loss of revenue from the property and the increased debt service cost is greater than the recapture payment. It is precisely why no ISD has chosen the loss of property route. The argument to vote NO is entirely based on a political argument that it will force the legislature to change the system, which would in effect require the legislature to appropriate billions more to public education. Absent a legal requirement to do so–I am very skeptical. I recognize the desire to want to vote no–but it’s an act of political defiance not a data driven decision. It’s a gamble that could cost local taxpayers.

Jay’s point is well taken, but I don’t know how many people will be with him. There is already opposition to the referendum, and it is my understanding that there will be a formal campaign against it, while any official support for it has been invisible so far. The case against is easy to understand, even if the ballot language is unclear. I just think there’s a greater chance that Dan Patrick will win the next season of RuPaul’s Drag Race than of the Lege taking any action to fix the underlying problem. I’m still leaning towards a No vote on this, as I hate the idea of rolling over, but I just don’t know what happens after that. It’s a losing choice either way.

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One Comment

  1. Uncle Bevo says:

    Well, if a District owes recapture, they WILL pay it, one way or the other. It’s not a choice. There are 5 options to satisfy the excess wealth provisions of the “Robin Hood” recapture,cand 3 of them are bad. The two most palatable ways are to give excess revenue to 1. Another district, or 2. The state.

    A NO answer on an authorizing vote from the public just means that TEA will withhold the amount owed from state payments.

    So voting NO is just ignorant because it removes one option from the District. A YES vote doesn’t mean you like recapture, or agree with it. It just means you are dealing with its reality.