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More on recapture and the Rainy Day Fund

There are some conditions that have to be met to get our recapture money back.

Houston Independent School District won’t have to hand millions of dollars to the state to spend at other schools if HISD needs that money to recover from Hurricane Harvey, but the district will have to apply for that money, Texas Education Commissioner Mike Morath said Friday.

The same goes for any of the roughly 250 school districts in declared disaster areas that are required to pay so-called recapture payments to the state as part of the “Robin Hood” program that siphons money from property wealthy school districts to give to property poor ones.

Morath, who leads the Texas Education Agency, said school districts will need to apply for the funds with the state and pay any recapture money not need for Harvey recovery. First, districts will have to exhaust their insurance and federal aid before trying to tap that money, he said.

“They have to have exhausted all their other funding sources first,” said Morath.

See here for the background. I get it, we want to make sure that all sources of recovery revenue are fully tapped. Let’s just make sure this doesn’t turn into a reason to nickel-and-dime the school districts, or to bury them under paperwork. The priority is the kids and their schools and teachers. We should not lose sight of that.

In related news, the state may make a bigger commitment to helping school districts recover.

Lt. Gov. Dan Patrick and Education Commissioner Mike Morath signaled Wednesday that the state will use rainy day funds to help schools saddled with Hurricane Harvey-related expenses, but the chances are slim that the state will delay state standardized tests planned for next spring.

Patrick, a Houston Republican, made vows to close to 45 superintendents from storm damaged areas in southeast Texas that he would support holding funding at current levels for school districts losing students due to Harvey, and for increasing money for school systems gaining displaced students.

[…]

Morath’s statements came one day after Patrick met with superintendents vowing state aid for storm-related costs not covered by insurance or the Federal Emergency Management Agency. The promise came during a meeting Tuesday between Patrick and administrators of school districts affected by flooding.

In a press release sent late Wednesday, Patrick doubled down on that support, but stopped short of promising the state would cover all costs not covered by insurance plans and federal agencies.

The state aid could help prevent deep financial cuts in the hardest-hit school districts, and it could keep districts’ “rainy day” funds intact. Several districts, including Houston and Aldine ISDs, dipped into their reserve funds this year to balance their budgets.

In a statement, Humble ISD Superintendent Elizabeth Fagen said Patrick “made it clear that it was his goal for districts to be made whole financially, both in terms of funding related to student attendance and facility repairs.” District officials don’t have an estimate of storm-related costs, but Kingwood High School, home to 2,800 students, will be closed for at least several months due to flood damage.

“The state’s intent to protect schools will help make a very difficult year more manageable, and we are encouraged,” Fagen said.

I’m glad, but I’m not inclined to take Dan Patrick’s word on anything, so I’ll want to see how this plays out. I can’t think of a good reason why the state shouldn’t completely fill any gaps that are left by insurance and the feds. There’s plenty of money in the Rainy Day Fund, and using it in this fashion would help districts avoid painful cuts or possibly tax increases. There needs to be a commitment to getting every district, school, and student back to where they were before the storm. If that’s asking for a lot, well, Harvey did a lot of damage. Are we going to shrug our shoulders, or are we going to be up to the challenge?

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10 Comments

  1. Bill Daniels says:

    ” I can’t think of a good reason why the state shouldn’t completely fill any gaps that are left by insurance and the feds. There’s plenty of money in the Rainy Day Fund, and using it in this fashion would help districts avoid painful cuts or possibly tax increases. There needs to be a commitment to getting every district, school, and student back to where they were before the storm.”

    I agree completely.

  2. Mark Kerrissey says:

    If Harvey doesn’t meet the definition of Rainy Day Fund, I have no earthly idea what would.

    We have four months before HISD writes its first $30 million check to Mr. Morath for its current Recapture bill of $268 million. Like you said, Mr. Morath may nickle and dime us on the money while keeping the test dates firm. We would be smart to ramp up our legal team. We would also be smart to set up an exploratory committee to look at Option 4 of Robin Hood (Chapter 41) whereby, we fulfill our Recapture obligation in part by helping our neighboring school districts like Aldine. We need some hard nosed school board members in the same room with Mr. Morath.

  3. Joel says:

    if school districts refuse to pay robin hood, what happens? is this what houston was considering a year or so ago?

  4. Ross says:

    @Joel, districts can’t refuse to abide by Chapter 41. They have choices on how to comply, paying the recapture, detaching property, giving money to other districts, and another option that I can’t remember. Houston was considering detachment in hopes that the owners of the Galleria and the other properties that would go to Aldine or other districts with higher tax rates would beat on legislators to change the law. In the end, HISD via another election, chose to pay the recapture.

  5. Joel says:

    “districts can’t refuse to abide by Chapter 41.”

    my question is: what happens if they do refuse?

  6. Bill Daniels says:

    @Joel,

    Not a lawyer, didn’t stay at a Holiday in, but I would guess it would work like any other dispute where one side is owed by the other. State goes to court to get a judgement, then files a writ of execution, then sends a constable to HISD or to HISD’s bank to get a cashier’s check for the money owed.

    Maybe Kubosh could weigh in on this?

  7. Ross says:

    If HISD refused to follow the law, there would be a court order to follow the law, followed by some sort of civil or criminal proceeding against the Trustees, probably followed by a State takeover of the district. It’s not the sort of thing they should even think about doing.

  8. Mark Kerrissey says:

    We can discuss the legal dimension of Recapture, but we are overlooking how “dark money” influenced the May Recapture vote. We all realize that Recapture is BIG, BIG money. $268 million this year heading to a half billion in a couple of years. Of course, Mike Morath and his GOP bosses want our property tax revenue for their general fund. Recapture is a cash cow. In their eyes school finances is not broken. For our big commercial property owners sending the Recapture check to the state general fund allowed them to avoid the Aldine ISD 10% higher tax rate. After 200,000 Houston voters said Hell No to sending the check (Option 3 under Chapter 41) in the November general election, Morath and his GOP bosses teamed up with the Greater Houston Partnership’s commercial property owners wing headed by Dean of high end realtors Mr. Welcome Wilson to form a PAC – Houston Taxpayers for Quality Education to reverse the large November No Vote. Chapter 41 requires voter approval of Option 3 (send the check to the general fund) and Option 4 (send resources/money to “property poor” surrounding districts like Aldine and Alief.)

    The first obstacle for the dark money gang was getting the Option 3 Recapture on the ballot for the voters, a requirement of Chapter 41. In February Morath pulled HISD trustees Adams, Eastman, and Skilern Jones into a private meeting to tell them you either put Recapture on a special May ballot or I will dissolve your board. To help spur them on he offered them the now infamous bait and switch $72 million discount. The select trustees kept other trustees out of the loop.

    Once the HISD board voted in March to put Recapture the ballot again, the Houston Taxpayers for Quality Education PAC launched its vote Yes to send the check. According to financial records, Houston Taxpayers for Quality Education spent $251,298.16 on the May Recapture election. Local big contributors to Mr. Wilson’s efforts included Anheuser Busch ($10K), Mischer Healthcare Services ($10K), Lyondell ($20K), HEB Grocery ($25K), and Friedkin Business Services ($25K). Not surprisingly dark money flowed in from the outside including $10K from BOP Heritage LLC Toronto, $5K from Zions Management Services Utah, and $27K from TRZ Holdings Toronto. Flush with $250K, PAC Houston Taxpayers for Quality Education hired Elite Change and Mammouth Marketing of Houston to carry out operations to canvass, phone bank, and field support. Strategic Media out of Arlington, VA handled the TV blitz for $45K. As a side note, Elite Change manages Trustee Adams’ website.

    The May Recapture election was nothing less than a coup d’erat by a few powerful elites pursuing their special interest to overturn the many. In short 24,195 voters in May vacated the will of 209,309 November voters. The Chronicle reporter writes that 84% of the May voters said write the check to the general fund which is fluff. The real story is voter disfranchisement, We know the elderly, especially in the African America community. vote via mail in elections. In the November election 28,725 voted by Mail In. In May the Mail In vote was 4,747. What gives? It would revealing to see what part of town the 4,747 Mail In ballots came from. I bet a beer that Elite Change did its homework to sway and exclude.

    Let me say the May election was a political power grab by Morath and the GPH real estate moguls at the expense of the children and taxpayers. The only trustee who did not join in with Morath to siphon our money away from our kids was Jolanda. If you do the math, each HISD kid is sending $500 of his education money to Abbott’s general fund. Recapture is a regressive tax. It is a cap on PUA.

    But alas, we talk about the legal dimension. Yet, no one is questioning why Morath is using a 1993 Cost of Education index to help calculate districts’ WADA. Morath, GOP leadership, the GHP, and countless of education expert consultants will say nothing because Recapture/School Finances is working. Money is flowing in to them. High end commercial properties are under assessed. On the other side, local school board members are cast as the bad guys who cut campus PUA and district services while forced to raise property taxes. Dark money in May won.

    Sorry for ranting but this story has not been told.

  9. The state is already talking details of how to address Robin Hood. At the same time, revenue poor districts, whether inside Harvey’s path or not, do indeed want to make sure they don’t get screwed.

  10. Mark Kerrissey says:

    SocraticGadfly,

    I hope the TEA at least update its Cost of Education Index at least now. We can not wait two years before the legislature addresses this finance system. When Robin Hood was enacted in 1993, there were 35 property rich districts. It is now around 285 I believe heading towards 400 districts. Dallas ISD is up next. Having 35% of Texas’ school districts writing checks is politically unsustainable IMHO. And yes, the poor districts need to make sure they don’t screwed. If TEA gives back money to property rich districts like HISD under home exemptions, there is less money for the poor districts. That is why some Valley districts sued to stop TEA giving HISD the $72 m. discount. No one can assure me that Robin Hood money is going into public education. The general fund is a black hole.

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