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property taxes

House passes its budget out of committee

On to the full House, then the real fight occurs.

A panel of House budget writers gave initial approval Monday to a budget that would spend $115 billion in state funds, including a $9 billion infusion of new funds for Texas public schools and property tax relief.

Now that the House Appropriations Committee has approved the 2020-21 spending plan, House Bill 1, the legislation moves to the floor of the 150-member House.

[…]

Among the highlights of the House’s spending plan are:

$9 billion in new state funding for K-12 education and property tax relief, contingent on lawmakers passing reforms to the way the state funds public schools. The budget does not dictate the breakdown of those funds, but a bill backed by Speaker Dennis Bonnen would give about $6 billion to school districts and use the remaining $3 billion to pay for a reduction in local school district property taxes.

A $2.8 billion increase in state and federal funds for health and human services above what the House proposed in January. That includes a $25 million increase for early childhood intervention services, $6.7 million to reduce caseloads for Adult Protective Services workers, $31 million to expand capacity at local mental health clinics for low-income Texans and $87 million to raise the pay of personal attendants, who care for the elderly and disabled, by about 10 cents an hour.

A $168 million expenditure to give some Texas prison guards and parole officers a pay raise.

Rep. Matt Schaefer was the lone No vote in committee, so presume that this will get some pushback from the wingnuts. The story notes that the House budget draws $2 billion from the Rainy Day Fund, but it doesn’t specify what it’s used for. There’s more here on the House school finance proposal. The budget is the one thing the Lege absolutely has to do. With some cracks beneath the surface on other “priority” items, it’s nice to see this get a head start.

Senate files its school finance bill

Here it is.

Sen. Larry Taylor

On the night of the deadline to file bills this legislative session, Texas Senate leaders turned in their first crack at legislation designed to reform school finance — rounding out a series of proposals in the upper chamber aiming to address rising property taxes and fix the way the state pays for its schools.

The bill was clearly incomplete and included some placeholder language. But its Republican author, Senate Education Chairman Larry Taylor, said it includes proposals that would fund full-day pre-K, incentivize school districts to improve their third-grade reading performance, offer money for teacher merit pay and increase funding for low-income students. The bill does not appear to require school districts to use standardized tests to determine funding.

Taylor didn’t give an indication of how much the bill would cost, or how it would affect local school district property taxes.

“Our focus should be on improving the academic outcomes of our low-income students, who make up the largest and fastest growing demographic in our public school system,” he said in a statement.

Some of the proposals in the bill appear similar to recommendations from a state school finance commission, which Taylor helped create.

See here, here, and here for some background. We don’t know enough about this bill yet – if there’s ever an application for the old saying about the devil being in the details, it’s with school finance bills – but so far I don’t see anything that makes me want to put my shields up. We’re starting out in a better place now than we’ve done in previous sessions. We still need to finish there.

Here comes the House school finance plan

Not surprisingly, they go bigger than the Senate.

Rep. Dan Huberty

With Texas House lawmakers unveiling their long-awaited school finance proposal Tuesday and the Senate’s version likely close behind, teacher pay appears to be emerging as one of the biggest sticking points between the two chambers.

House Public Education Committee Chairman Dan Huberty, R-Houston, and House Speaker Dennis Bonnen, R-Angleton, laid out their reform proposal at a press conference Tuesday, calling for raising minimum salaries for a broad group of educators, increasing health and pension benefits, and offering opportunities for merit pay programs. That approach differs substantially from the $4 billion proposal that sailed through the Senate on Monday that would provide mandatory across-the-board $5,000 raises for classroom teachers and librarians.

When asked about the Senate’s proposal, which Lt. Gov. Dan Patrick has championed, Bonnen said, “I don’t know how you call a $5,000 across-the-board teacher pay raise … with no discussion of reducing recapture, no discussion of reducing property taxes, no discussion of early childhood education, no discussion of incentivizing the teachers going to a tougher school to teach” a school finance plan.

“What we have is a plan,” he added. “I think teachers are some of the smartest people in Texas, and they are going to figure out that the Texas House has a winning plan for the teachers and students in Texas.”

[…]

The House proposal, House Bill 3, would increase the base funding per student while requiring school districts to meet a higher minimum base pay for classroom teachers, full-time counselors, full-time librarians and full-time registered nurses. Many districts already exceed the current minimum salaries for educators at different experience levels.

It would work hand-in-hand with House Bill 9, filed Monday by the speaker’s brother, Rep. Greg Bonnen, R-Friendswood, which would increase the state’s contribution to Teacher Retirement System pensions over time while keeping active member and district contributions the same.

HB 3 would also provide funding for districts that offer a merit pay program, rating their teachers and providing the top-rated ones with more money — modeled on a Dallas ISD program touted among lawmakers. The Senate is expected to include a similar proposal in its school finance bill later this week.

The politics surrounding the Senate’s teacher pay raise bill this session are unusual, with Patrick, who has previously clashed with educators, advocating for a proposal many teachers like. Meanwhile, conservative group Empower Texans, a key contributor to Patrick’s campaign, has come out against the bill, with one employeecriticizing conservatives like Patrick for “kowtowing” to liberals.

That bill has divided the education community, with superintendents and school boards arguing they need more flexibility with additional funds and many teachers supporting the directed raises.

Huberty said Tuesday that the House would “certainly have a hearing on that [Senate] bill” but that the school finance panel that worked to develop recommendations for lawmakers did not include across-the-board raises.

He said HB 3 provides more opportunity for local school boards and superintendents to decide how to use increased funding. More than 85 House members have signed on as co-authors of HB 3, and in a public show of support, many of them were present at Tuesday’s press conference.

See here and here for some background. A preview story about the House bill is here, and a story about that Senate bill is here. The Senate bill covers raises for teachers and librarians, but not other support personnel like nurses or bus drivers, which is one reason why the more-flexible approach is favored by school districts; that said, the president of the Texas State Teachers Association released a statement emphasizing the need for a Senate-style guaranteed teacher pay raise. The House is also taking a different approach on property taxes, as noted in that preview story:

According to the summary, the bill would increase the base funding per student by $890 to $6,030 — the first time that allotment has been raised in four years. It would also lower school district property tax rates statewide by 4 cents per $100 of taxable property value, helping to reduce so-called Robin Hood payments that redistribute money from wealthier districts to poorer ones. The compression could save the owner of a home with $250,000 in taxable value about $100 annually in school district taxes.

That method of property tax relief is different than one proposed by Gov. Greg Abbott last year, which would cap annual increases in school districts’ tax revenues at 2.5 percent.

There’s also the Democratic proposal, some of which is in HB3. All of this is a starting point, so I don’t want to get too far into the weeds. None of these bills will be adopted as is, and some of them may not get adopted at all. This and the budget will be the last pieces of business the Lege deals with, and the main reason why there could be a special session. We’ll keep an eye on it all. The Chron has more.

Dems propose their school finance bills

It’s good to have a broad array of options.

The Texas House Democratic Caucus laid out a $14.5 billion plan for school finance reform and property tax relief Thursday, releasing a list of priorities in advance of a key school finance bill Republican education leaders are expected to file and support.

The Democrats’ plan is composed of dozens of bills members have filed — or will file — to increase teacher pay and benefits, pay schools more for educating low-income students, and provide more counselors for school districts. It does not include two policy items that may be included in Republican-filed legislation: merit pay for teachers or paying schools more for higher student test scores.

“We hope to work with our colleagues to incorporate some of these ideas into their bills,” said state Rep. Chris Turner, D-Grand Prairie, who chairs the caucus.

[…]

Some of the House Democrats’ proposals dovetail with recommendations in the school finance panel’s report. [Rep. Mary] González filed House Bill 89, which would increase the base funding districts get per student and ensure they receive more funding for low-income students and those learning English.

A few House Democrats have filed bills that would fund full-day pre-K for all school districts, an estimated cost of $1.6 billion.

The proposal also includes $3.78 billion for teacher pay and benefits — around the same amount Senate Republican leaders have proposed in across-the-board $5,000 raises for full-time classroom teachers. House Democrats are championing proposals that would increase salaries for not just teachers, but also support staff, while also boosting financial support for teacher health care premiums. The exact amount of the proposed raises for each person has not yet been determined.

See here for more on the school finance panel report. Some of these ideas will be included, in whole or in part, in the omnibus school finance bill that Rep. Dan Huberty will file. Others are there more as a statement of values, since none of these bills will pass without sufficient Republican support. If I could pick just one thing to make it to Abbott’s desk, it would be the full day pre-K, which will have a big return on investment if we do it right. When all is said and done, I’d love to know how much of what was on offer today makes it through into the final bill.

Let’s check in on the HCDE

How are things with the new Board?

Within an hour and 37 minutes of his first meeting as a trustee on the Harris County Department of Education’s board of trustees, Josh Flynn had a new role: President.

The former Harris County Republican Party treasurer and local accountant, who ran on a platform of bringing more transparency and accountability to Texas’ last remaining county education department, won the votes of three other trustees at the Jan. 16 meeting.

Minutes later, Flynn joined those same three in firing the department’s lobbying firm, a move that raised concerns among other trustees and Superintendent James Colbert Jr. that a lack of advocates in Austin could leave them with little recourse if lawmakers target the agency during the 2019 legislative session. Flynn did not return messages for comment.

Together, the votes signal a new majority on the seven-member board, one that Trustee Don Sumners said will provide a chance to lift the hood on HCDE’s departments and to make the agency more accountable to taxpayers. All four have questioned or criticized the department or some of its actions in the past, and one has filed motions to study closing the agency.

“We’ll probably go through the whole department one division at a time and do some evaluation,” Sumners said. “We really haven’t been able to get to the nuts and bolts very easily, and I think now that we have more interested participation, we’ll be able to realize this department for efficiency. We haven’t been able to do that before.”

Others, however, worry that actions like some of those taken at the Jan. 16 meeting could do irreparable harm to the state’s last remaining county department of education.

“I’m concerned, I’m definitely concerned,” said Trustee Danny Norris, a Texas Southern University law professor who also joined the board on January. “I think the vote to cancel our contract with (our lobbyists) specifically worried me a good bit, because we usually have a few bills to shut us down each session. This session, I’m the most worried.”

[…]

Trustee Eric Dick, a longtime Republican, noted at the meeting that other school districts, political parties and government entities also hire lobbyists. About a week after the vote, he said any government agency that is able to generate more than 70 percent of its budget from sources other than local tax dollars should be a model of good governance that conservatives should want to protect and other government agencies should look to for inspiration. About 28 percent of HCDE’s roughly $117 million budget in 2017-2018 came from property taxes, with the rest coming from state and federal grants, fees paid by local school districts and its cooperative purchasing program.

“You have an organization that actually runs at a profit, that’s actually in the black, that turns one dollar into five dollars. What should happen is ISDs should replicate and try to do something similar. So should the city of Houston,” Dick said. “I think worst thing that you could do is take something that works and cut it up.”

sigh Okay, three things here. One is that Flynn won his race by a tiny margin, 0.6 percentage points, less than 2,000 votes out of over 300K cast. Even in a dominant year for Dems in Harris County, one low-profile downballot race can make a difference by going the other way. Two, assuming the HCDE survives another legislative session, it’s very likely that it will flip back to a Democratic majority after the 2020 election, when At Large members Michael Wolfe (yeah, that guy again) and Don Sumners will almost certainly get voted out. And three, I can’t believe I’m about to say something nice about Eric Dick, but he has the right idea here, and I appreciate his vote on this matter. Let’s hope this is just a minor kerfuffle and nothing bad happens in the Lege.

(It should be noted that among other things, former County Judge Ed Emmett was not a fan of the HCDE and supported eliminating it. I hope Judge Hidalgo is up to speed on this. The HCDE may not have its own lobbyist in Austin, but the county has them. They could advocate for HCDE in a pinch if needed. Something to keep in mind.)

UPDATE: From an email sent out by Andrea Duhon, who was the Democratic candidate against Josh Flynn and who is planning to run for one of those At Large positions next year:

Community advocates, parents, and teachers plan to attend and make their perspectives known at an unexpected Special HCDE meeting this Monday, February 11th at 4:00 PM at 6300 Irvington Dr. to push back against the politically motivated distribution of legal contracts and privatization attempts by Austin politicians.

Expected on the HCDE agenda is an attempt by some trustees to fire the current unbiased education attorney and replace her with the highly partisan law firm Strahan-Cain, of which far right State Representative and education privatization proponent Briscoe Cain is a partner.

The meeting was called late Friday afternoon with little notice and comes at a time when the Texas Legislature is not only in session but is actively pursuing overhaul of state education policy. Also relevant are efforts both past and present by State Senator Paul Bettencourt (R-SD7) to shutdown the department and consolidate public education resources into private buckets. The agenda also calls to replace Public Facilities Corporation board vacancies in an attempt to overturn contracts which have been approved.

Just last month, the HCDE surprisingly selected a first-term trustee as President of its board and voted to eliminate its own representation in Austin by firing HillCo Partners, leaving services vulnerable to attacks.

The community demands the department safeguard the programs and shared services it brings to Harris County and the jobs of more than 1,000 HCDE employees.

Here’s the agenda for that special Board meeting. Note that all of the action items on it were submitted by the Flynn/Wolfe/Sumners troika. Nothing good can come of this.

The state of the state 2019

Sometimes it’s what you don’t say that gets noticed.

Gov. Greg Abbott, in his biennial State of the State address Tuesday, stayed on message about schools and taxes, continuing state leaders’ so far unified focus on bread-and-butter policy reforms in a forum where he has in the past served up red meat.

Speaking in the Texas House to both chambers of the Legislature, Abbott named as emergency items the consensus priorities of school finance reform, teacher pay raises and property tax relief, the issues he and the state’s other top two Republican leaders have trumpeted almost single-mindedly in the months since the midterm elections. In doing so, he carefully avoided controversial social issues like the ones that headlined last session’s speech.

Also topping the governor’s priority list: school safety, disaster response and mental health programs. Abbott’s designation of those priorities allows lawmakers to take up such measures sooner, lifting the usual constitutional limitation that prevents the Legislature from passing bills within the first 60 days of the session.

“Our mission begins with our students,” Abbott said as he began to lay out his legislative priorities. To improve lackluster student outcomes — only 40 percent of third-graders are reading at grade level by the end of their third-grade year, he said, and less than 40 percent of students who take the ACT or SAT are prepared for college — “we must target education funding.”

[…]

Unlike in his first two State of the State addresses, Abbott did not deem ethics reform an emergency item. He tagged that issue with top priority status in 2015 and 2017, but didn’t mention it this year. Nor did he raise any proposals related to abortion. And there was hardly any other mention of health care, an expense that takes up nearly as large a share of the state’s budget as does education.

House and Senate Democrats called it “disappointing” that the governor didn’t propose expanding access to pre-K or lowering the costs of teachers’ health care.

And state Rep. Toni Rose, D-Dallas, who serves as the caucus’ second vice-chair, said that Abbott, for all his bragging on the state of Texas during his speech, failed to mention the state’s high uninsured rate for health care.

“Texas needs to expand Medicaid,” Rose said during the conference, “and we need to expand it today.”

Still, Democrats were optimistic about some of the notable absences. Two years ago, Abbott’s address was headlined by his call for an anti-“sanctuary cities” bill that Democrats would staunchly oppose. This year, the governor mostly stayed away from hot-button social issues.

“It certainly was a different speech than we heard two years ago,” state Rep. Chris Turner, the Democrat who heads his party’s caucus in the House, said after the speech. “It seems as though election results have consequences.”

Another conspicuous absence from the speech was the voter rolls debacle that has dogged state leaders in recent weeks. Last month, Texas Secretary of State David Whitley flagged for citizenship review nearly 100,000 Texas voters; in the weeks since, the list has been revealed to be deeply flawed, and civil rights groups have sued the state three times.

There’s still plenty of reason to be wary of the property tax proposals Abbott has made, and one reason why there are fewer red meat items on his agenda is that a lot of them – voter ID, “sanctuary cities”, campus carry – have already been passed. I will agree that this was much more temperate than the address from two years ago – there’s no way Abbott would admit this, but I think Rep. Turner is right in his assessment – and there are issues on Abbott’s list that will get broad bipartisan support. Let’s be glad for the small victories, and work to make them bigger. Ross Ramsey, Texas Monthly, and the Observer have more.

Always beware revenue caps

They’re always a bad idea.

Flanked by the state’s top legislative leaders, Gov. Greg Abbott announced Thursday that both chambers of the Texas Legislature will push to curb property tax growth by limiting how much money local governments collect without voter approval.

Fellow Republicans Lt. Gov. Dan Patrick and House Speaker Dennis Bonnen, as well as the heads of both chambers’ tax-writing committees, joined Abbott in making the announcement. Their news conference followed the filing of identical bills in both chambers, Senate Bill 2 and House Bill 2.

Abbott said it was “completely unprecedented” for lawmakers to be so closely aligned on such an important issue this early in the session.

“Most importantly, it’s a testament to the voters in this state,” he said. “The voters demanded this, and this demonstrates that the Texas Legislature is responsive to the needs of our voters.”

But two Democrats who sit on the House Ways and Means Committee said the proposed legislation is far from being a done deal. And an advocate for city governments said there are plenty of unintended consequences that need to be worked out. Chief among them is ensuring that cities aren’t suddenly unable to afford police officers and firefighters.

Thursday’s bills seek to require voters to approve tax rates that allow government entities like cities, counties and school districts to collect an additional 2.5 percent in revenues from existing property compared with a previous year. The threshold would not apply to small taxing units — those with potential property and sales tax collections of $15 million or less.

Currently, cities and counties can collect an additional 8 percent in revenues without involving voters. But even then, residents must collect enough signatures to force an election. The new pair of bills would automatically trigger what’s called a rollback election. If voters shoot down the measure, the government entity would have to set a tax rate that allows it only to collect revenues from existing properties that are less than 2.5 percent more than the previous year.

The rollback rate is also based on the appraised value of properties within a taxing unit’s borders. That means a city or county could hit the rollback election threshold without changing its tax rate — or even if it lowers the tax rate — if there is a significant increase in local property values.

The legislation does not apply a cap to individual property tax bills. Because it would limit only how much government entities can collect in property tax revenues before getting voter approval, an agency could stay below the rollback election rate, and that portion of a property owner’s tax bill could still increase.

Local officials are almost certain to to push back. Bennett Sandlin is the executive director of the Texas Municipal League, which advocates for city governments. His organization estimates that about 150 of the state’s largest cities would be affected if the legislation passes. He said that the rollback threshold is lower than inflation and could prevent cities from paying for first responders’ raises, filling potholes, and keeping recreation centers or libraries open.

As the story notes, this is more ambitious than what Abbott and Patrick pushed for in 2017, and they’re doing it with smaller majorities. On the other hand, these are the highest-priority bills they have (hence the HB2 and SB2 designations), and they’re no doubt going to go all out. It’s very possible they could succeed.

But here’s the thing. This is what they rolled out after making big promises about reforming school finance and giving more money to schools. Did you notice what was missing in this rollowt?

They were so tuned in to their harmonic convergence, they didn’t talk much about what their legislation would actually do, leaving the details to the bill sponsors to explain later.

They did say they were going for a 2.5-percent growth limit on property taxes in local school districts, cities, counties and other government bodies. It’s aimed at overall taxes, a leash on the overall mix of property values and tax rates that determine what happens to the average taxpayer’s bill. Anything that increases a local government’s property tax revenues by more than that would trigger an automatic November election asking voters for permission.

You might wonder how public education is going to get more financial help, as proposed by this same group of elected officials, if the state is going to limit school districts’ ability to levy taxes.

The short answer is that the state’s going to pay for it. The House’s proposed budget for the next two years adds billions to what the state is spending on schools. The Senate’s plan doesn’t spend as much, but the increases are significant (and in one case, more specific: Patrick has proposed $3.7 billion in teacher pay raises). Abbott floated the idea of holding down local taxes and tax increases — an answer to loud and persistent complaints about property taxes — and increasing state spending to fill the gap. And Comptroller Glenn Hegar, the fourth official at those weekly breakfasts, has proposed requiring the state to pay at least 40 percent of the cost of public education, along with any increases due to inflation.

But they haven’t said where the state money will come from. Nobody in the state government’s high places has proposed raising a tax, cutting other state spending to produce money for education, or weeding through the state’s tax exemptions and loopholes to shore up the state’s share of the public education load.

In other words, right now it’s all underpants gnomes. I don’t know about you, but I’m not expecting much more in the way of details about how this is supposed to do all the things they say it will do.

HISD’s last stand

They have their work cut out for them.

Houston ISD’s four Hispanic trustees took hold of the school board’s top officer positions Thursday, led by Trustee Diana Dávila winning election as president of the much-maligned governance team.

Dávila, who has spent a decade on the board spread over two separate terms, will take responsibility for setting the leadership tone in HISD following months of governance strife that has often cut across ethnic and racial lines. Elected officers do not have more voting power than other trustees, but the board president presides over board meetings and drives the agenda.

Dávila said her priorities will include ensuring the district’s longest-struggling schools get resources needed to meet state academic standards, fighting for more education funding and restructuring board meetings to foster greater engagement and transparency.

“I’m looking to be bringing back some of those things we used to do before, making sure that we respect each other as colleagues on the board and respect the administration,” said Dávila, who served as board president in 2006.

The best thing the Board can do at this time is minimize dissension within their ranks, speak with one voice as much as possible, and find a permanent Superintendent. Accomplishing those first two should make the third go more smoothly.

This joint op-ed by Rhonda Skillern-Jones and Elizabeth Santos is a good example of what I’m talking about.

This board was divided on some high-profile issues last year. The two of us have been on opposite sides on some of those fights. But we are united in a vision for a school district where neighborhood schools are cornerstones of their communities, equity is a guiding principle of resource allocation and all students receive educations that are tailored to their individual learning needs.

To achieve that vision, all levels of government involved in making education policy must take a long-term approach that addresses the costs of educating students living in poverty, English language learners and students with special needs. Unfortunately, state funding formulas — which have not changed in 30 years — woefully underestimate these costs.

[…]

Despite all of this, HISD has fared well under the flawed STAAR regime. The district earned an 84 percent rating with 91 percent of schools meeting standard. We reduced the number of schools that could trigger automatic state sanctions from 52 to 4, and we have maintained a recognized financial rating of 90 percent and a high bond rating.

It is baffling that HISD taxpayers are required to foot the entire bill for their district and also forfeit $100 million in “recaptured” dollars — and growing — to supplement the state’s obligation to other districts, while at the same time facing the risk of being stripped of their right to elect their own governing board. That hardly seems democratic or just.

Apparently “no taxation without representation” is just something we teach in our history classes.

I agree with pretty much everything they say in this piece. I hope over the next eight months – and, ideally, a lot longer than that – we can focus on those things, and not on whatever is going on with the Board.

State House mulls big increase in school funding

That’s a good start.

As Texas’ Republican leadership calls for property tax cuts and a school finance overhaul, the Texas House on Monday pitched a bold proposal: Pump roughly $7 billion more state funds into public schools — but only if lawmakers can satisfactorily overhaul the school finance system to slow the growth of property taxes.

Budget documents published Monday evening show the House has offered up a whopping 17 percent increase in K-12 public education funding so long as lawmakers achieve a few lofty goals in reforming how the state pays for public schools: Reduce the state’s reliance on property taxes, decrease the need for the unpopular Robin Hood system that requires property-wealthy school districts to subsidize poorer ones, and maintain an equitable system of school finance, as required by the state Constitution.

Counting all sources of funding — including local property taxes, state revenue and federal dollars — the state’s public education budget would grow to about $70.6 billion in the two-year cycle from 2020 to 2021, according to a Legislative Budget Board summary of the proposed House budget. That’s an increase of 16.7 percent from the previous two-year budget cycle, when the state spent about $60.5 billion on public schools.

[…]

The state is forecasted to have about 8.1 percent more funding available to spend over the next, two-year budget cycle. The House’s proposed budget would also withdraw $633 million out of the state savings account, called the Economic Stabilization Fund, to pay for retired teachers’ pensions, school safety improvements and disaster-relief programs.

That account, also known as the rainy day fund, has grown to a record level thanks to booming oil and gas production. Even after the House’s proposed $633 million withdrawal, the fund’s balance is projected to reach $14.7 billion in 2021.

The budget recommends spending $109 million on school safety, which lawmakers have discussed as a priority item since the 2018 Santa Fe High School shooting near Houston left 10 dead. Included in school safety funding would be about $12 million for children’s mental health programs.

Notably, the House budget decreases state funding for health care and human services by about 3.2 percent. Education and health care make up the vast majority of state spending.

Medicaid, the federal-state insurance program for the poor and disabled, would see a decrease of $1.4 billion in state funds, for example.

There are a lot of details to be filled in here. Making this contingent on property tax reform can be dicey, as the last time the Lege “fixed” school finance by way of tax reform they screwed over the revenue stream for years to come. Cutting Medicaid payments is a serious no-go. All of this has to actually be written into the budget and then approved by both chambers and not line-item-vetoed by Abbott. Lots of things can go wrong or turn out bad. But all that said, this is a great starting point, and hugely refreshing after too many sessions of cuts.

Meanwhile, in the Senate:

Leaders of the Texas Senate are proposing giving schools $3.7 billion to provide $5,000 pay raises to all full-time classroom teachers — on the heels of a House budget proposal that includes $7 billion more for public education.

Sen. Jane Nelson, R-Flower Mound, filed Senate Bill 3 Tuesday morning, which would mandate that schools use the billions in additional funding specifically for teacher pay raises. Speaking at his inauguration Tuesday morning, Lt. Gov. Dan Patrick, who presides over the Senate, lauded the proposal as one of his main priorities this legislative session and said the funding would be permanent.

[…]

Nelson’s proposal appears to build a new formula into the school finance system that would distribute state funding to schools based on the number of full-time classroom teachers they employ, and require they use that money for raises over the previous year.

Here’s SB3. We now know that while the Senate is also proposing more money overall for school finance, it’s not as much as what the House is proposing. This is what I mean when I say there’s a long way to go to get to a finished product. Be that as it may, this too is a good start.

Our pretty decent revenue estimate

We’ve seen much worse.

At a time when legislators are vowing to spend more money on public schools and slow the growth of Texans’ property tax bills, the state should have enough money at its disposal to do just that.

That is, if its newest predictions hold true.

Texas Comptroller Glenn Hegar on Monday offered a cautiously optimistic outlook for the Texas economy, telling lawmakers they will have about 8.1 percent more state funds available to budget for public programs — primarily schools, highways and health care — in 2020 and 2021. Hegar projected there would be about $119.1 billion in state funds available for the next two-year budget, up from $110.2 in the last two-year budget.

But falling oil prices in the last month, along with heightened uncertainty in the U.S. economy and international financial markets, led Hegar to deliver a “cloudy” forecast with some trepidation.

“We remain cautiously optimistic but recognize we’re unlikely to see continued revenue growth at the unusually strong rates we’ve seen in recent months,” he said.

[…]

Meanwhile, the state’s savings account, known as the rainy day fund, is projected to reach a record high balance of $15 billion. Lawmakers will debate whether to dip into that Economic Stabilization Fund to pay for bills coming due from the last two-year budget period, including Hurricane Harvey recovery, and in the upcoming two-year budget.

Advocates for greater investment in public schools reacted positively to the revenue estimate, saying lawmakers now have no excuse not to increase spending, given a growing budget and unprecedentedly large savings account balance.

“This is good news,” said Eva DeLuna Castro, a state budget analyst at the left-leaning Center for Public Policy Priorities. “This is enough to not cut state services.”

It is good news, but as always it comes with a warning label.

[T]he Republican-controlled Legislature has excelled at finding new ways to squander available funds on everything from inefficient property tax relief, piecemeal school finance fixes and heaps of corporate subsidies and tax cuts. Dan Patrick and the tea party faction are also intent on keeping the overflowing Rainy Day Fund under lock and key, despite the continued urgency of Hurricane Harvey relief. That could be a big wild card — given that Governor Greg Abbott never called a special session after Harvey, the Legislature has yet to allocate any state relief money. Leaders in the affected Gulf Coast region, from Rockport to Port Arthur, are sure to call on legislators to step up.

Of course, the devil will be in the details — GOP lawmakers are experienced at promising to tackle weighty, complicated issues like property tax relief and school finance reform while pushing policy that doesn’t really fix anything, or makes things worse. Abbott is intent on settling the property tax dilemma by handcuffing local governments’ ability to levy property tax increases, all while ignoring the larger problem at hand: the state needs to dedicate a lot more money for schools.

The state school finance system is in desperate need of an overhaul. Texas’ spending per student is around $10,000 a year, about $2,300 below the national average. Funding has remained relatively stagnant over the past decade and the state has plummeted to 36th in the nation in terms of per pupil spending. Meanwhile, as the state’s population has grown rapidly, the Legislature has forced local governments to pick up a larger share of the education tab through property tax revenues (thus fueling the current property tax crisis). In 2008, the state and local funding shares were split evenly, but the state’s contribution has since fallen to its current rate of 38 percent, according to the Center for Public Policy Priorities. Without a fix, that number is projected to fall even further. This has created a perpetual underfunding of the school system and has worsened the inequities between rich and poor districts.

But Hegar’s estimate is a heartening sign for advocates hoping for a substantial injection of state funding for public education — as much as $5 billion, which is what [outgoing Speaker Joe] Straus has said the state can afford. Perhaps an emboldened caucus of House and Senate Democrats, in tandem with Republicans who saw the writing on the wall in November, will be able to succeed in pushing for a more comprehensive solution.

The need is great, but the temptation to splurge on wasteful tax cuts that they call “school finance reform” is greater still. Even if there’s a zombie bathroom bill, that’s going to be the fight of the session. Texas Monthly has more.

Here comes the latest school finance report

I figure the smart money is always on efforts like this to fail, but you never know.

After hours of discussion Wednesday, a state panel studying school finance stripped its final report of language that blamed the state for inadequate education spending — and that added urgency to a need for more money to improve student performance.

The original version of the report, unveiled last Tuesday, included stronger language that held the state accountable for the lack of education funding and urged lawmakers to immediately inject more than a billion dollars of new funding into public schools. Scott Brister, the panel’s chairman and a former Texas Supreme Court justice, led the charge to make those changes, which he said would be more palatable to lawmakers and keep Texas from being sued in the future.

“I do have a problem several places where it says our school system has failed. I do think that’s asking for trouble,” he said.

Some lawmakers and educators on the panel pushed back before agreeing to compromise.

“I think we have failed our schools and we haven’t funded them, in my view, adequately or equitably,” responded state Rep. Dan Huberty, R-Houston, who chairs the House Public Education Committee.

Despite the conflict, the 13-member commission unanimously approved more than 30 recommendations on Wednesday aimed at boosting public education funding, improving student performance, cleaning up a messy funding distribution system — and providing property tax relief for Texans.

A final report will be sent to lawmakers, who are convening next month amid calls from state leadership to overhaul a long-embattled school finance system. Gov. Greg Abbott supported the panel’s vote in a statement Wednesday afternoon: “Today’s school finance commission report made clear that the state must reform the broken Robin Hood system and allocate more state funding to education. This session, we will do just that.”

[…]

Among the recommendations the commission plans to send to lawmakers are:

  • $100 million a year to school districts that want to develop their own teacher evaluation metrics and tie pay to performance. The total amount available should increase $100 million each year until it reaches $1 billion.
  • Up to $150 million to incentivize school districts to offer dual language programs, which instruct students in both English and Spanish, and to improve their dyslexia programs.
  • $800 million to incentivize school districts to improve students’ reading level in early grades and to succeed in college or a career after graduating high school.
  • $1.1 billion to improve education for low-income students, with school districts that have a higher share of needy students getting more money.
  • Create a new goal of having 60 percent of third-grade students reading on or above grade level and 60 percent of high school seniors graduating with a technical certificate, military inscription, or college enrollment without the need for remedial classes.
  • Cap local school district tax rates in order to offer property tax relief and a small amount of funding for schools — a proposal from Abbott.
  • No extra funding for special education programs until the state has completed overhauling those programs in line with a federal mandate.

The report hasn’t been published yet, so this is all we know. I don’t see any reason to trust Greg Abbott, who is more interested in cutting property taxes than in providing schools with the resources they need, and of course Dan Patrick will be heavily involved in whatever happens. I think the commission has generally good motives and for the most part the ideas are fine, but we could do a lot more, and that’s before we address the huge need for special ed funding. It’s all a matter of our priorities, and of our view of what “fixing” school finance looks like. The Chron has more.

The problem with the revenue cap, in two short paragraphs

From the Chron:

The average homeowner has saved a cumulative $436 thanks to the rate adjustments driven by the revenue cap since 2014, an average of $87 per year.

The same adjustments have prevented the city from collecting $533 million than it otherwise would have.

So in return for a negligible reduction in your property tax bill, which you almost certainly didn’t notice, the city of Houston lost over a half billion dollars in revenue over the past five years. That’s more than enough on a per-year basis to bridge all the shortfalls that have been projected, more than enough to cover even the highest-end estimate of what the firefighters’ pay parity proposal would cost, more than enough to hire however many more cops we’re supposed to need, more than enough to make all of the employee pension systems a hell of a lot more stable, more than enough to buy out a crapload of floodplain-located homes, etc etc etc. Amazing what a little thing like $500 million dollars can do, isn’t it? And don’t forget, even though the average property tax cut was small, the biggest share of it went to the people with the most expensive property. (Not to mention, if you’re a renter, you got exactly zero out of this.) This right here is why I hold self-proclaimed fiscal peacocks who favor the revenue cap like a certain former Mayoral candidate I feel no need to name in such contempt. We cannot undo this stupid, harmful policy soon enough.

Property tax revenue up, school funding down

Welcome to Texas.

An early projection has Texas decreasing state funding to public education, and largely using local taxes to fill the gap.

In its preliminary budget request ahead of next year’s legislative session, the Texas Education Agency projected a drop in the state’s general revenue for public education by more than $3.5 billion over the next couple of years, in part because the revenue from local property taxes is expected to skyrocket. General revenue only makes up part of the state’s education funding.

Texas Education Commissioner Mike Morath confirmed this projection in front of a state budget panel Wednesday morning as he laid out the state agency’s budget request through 2021.

The Foundation School Program, the main way of distributing state funds to Texas public schools, includes both state general revenue and local property tax revenue. Local property values are expected to grow by about 6.8 percent each year, and existing statute requires the state to use that money first before factoring in state funding.

Just a reminder, it doesn’t have to be this way. There are lots of things that could be done differently, but they all require legislative action, not to mention state leadership. There is one thing we can all do to facilitate this kind of necessary change, and that’s to vote for candidates who want to make that happen. Start with Mike Collier, who has plenty of ideas for how to fix this mess, but don’t stop there. We have a years-long record to tell us what we’re going to get if we have the same old same old in government next year. Vote to do something different or quit complaining when you don’t get it. The Chron editorial board has more.

And now we’re going to fight about when elections can be

I have thoughts about this.

School districts and other local governments are intentionally holding elections at odd times this summer to drive down turnout in hopes it will help them win voter approval for tax increases and bond issues, state lawmakers say.

Local government leaders say they don’t set elections on odd days in hopes of a more favorable outcome at the ballot box, but the issue is fast becoming a new tension point in the sometimes adversarial relationship between local government agencies and the Republican-led Texas Legislature.

“There will be a response from the Legislature,” pledged State Sen. Paul Bettencourt, a Houston Republican.

Just last month the Klein Independent School District in Harris County held a tax increase election on June 16 — a Saturday. That was three weeks after Texas voters took to the polls for statewide runoff elections on May 22. And three weeks before that, the city of Houston held a special election on May 5 to fill a city council vacancy.

Next up: South San Antonio Independent School District is holding an election on Aug. 14 in an attempt to raise the district’s property tax rate by 13 cents per $100 of taxable value, which would increase school taxes by $130 a year for the owner of a $100,000 home.

And on August 25, Harris County will ask voters to approve a $2.5 billion bond issue to cover the cost of flood control projects. That same day, voters in Floresville ISD, just outside of San Antonio, are being asked to approve a tax increase.

“It is preposterously bad public policy to spend taxpayer money to hold special elections in the dog days of summer that almost always have a low voter turnout,” Bettencourt said.

Harris County Judge Ed Emmett shot back. “People who live in Senator Bettencourt’s senate district were affected by the flooding. He should be doing more to help them instead of worrying about election dates,” he said.

[…]

Klein ISD superintendent Bret Champion said the district wasn’t playing games with the June election. The district was looking for the earliest possible date in order to have time to prepare for the next school year budget, whether the measure passed or failed.

If the district had waited until November, he said, the election would have been two months into the budget year and its failure would have forced adjustments with the school year already well underway.

“It was a budgetary reason, not a political one,” Champion said.

As a matter of principle, I too would rather see elections generally held in November and May, when people expect them to be. It’s what I wanted for the flood bond referendum, as you may recall. It’s not just a matter of being more democratic, it’s also that I believe higher turnout is generally better for issues and candidates I care about. Not all the time, of course (Exhibit A: the year 2010), but more often than not. There’s a reason I care about things like registering voters and making it easier and more convenient to vote. I’ll admit it can be a tossup for things like the Klein ISD tax ratification election, where only the most interested will participate and it’s not obvious who those people will be, but give me a choice and I’ll take the higher turnout scenario.

That said, I have some sympathy for school districts that are only holding these dumb elections because legislators like Paul Bettencourt forced them to as a way to impose a low-tax low-revenue orthodoxy on them, and I can understand the rationale for the August flood bond election date even if I disagree with it. It’s especially rich to hear Bettencourt sing the praises of higher turnout, given his long career in the Harris County Tax Assessor’s office of purging the voter rolls as a tool of voter suppression, not to mention his party’s enthusiastic embrace of voter ID. Tell you what, Paul I’ll support your push for May and November-only elections if you’ll support online and same-day voter registration. You want to encourage higher turnout in elections, put your money where your mouth is.

HISD approves its budget

In the end, they took what they initially rejected.

Houston ISD trustees unanimously passed a $2 billion budget Monday that is nearly identical to the one they narrowly rejected two weeks ago, signing off on significant cuts and agreeing to draw as much as $17 million from the district’s rainy-day fund.

At an hourlong early-morning meeting, trustees said they wanted to pass balanced budgets after back-to-back years of dipping into reserves, but they ultimately approved the spending plan ahead of a June 30 deadline.

[…]

The approved budget calls for about $83 million in spending cuts, which will result in hundreds of layoffs of support service staff. Hundreds of teaching positions also will be eliminated, but HISD administrators said they expect the vast majority of those jobs will be cut through attrition.

The budget includes about $17 million in new spending on dyslexia services, special education, the district’s plan for low-performing campuses and a comprehensive outside performance review. Trustees shaved about $1.5 million off the projected shortfall in recent days by choosing to use the state’s Legislative Budget Board for the performance review instead of a third-party vendor.

Trustees approved a budget last year that used $106 million in reserves to cover a shortfall and pay for raises ranging from 2 to 4 percent for many staff members, though they ultimately used less rainy-day money than expected.

At the June 14 budget meeting, several trustees said they were reluctant to tap reserves again, even on a smaller scale.

Glenn Reed, HISD’s general manager of budgeting and financial planning, said the district likely will not spend as much as is currently budgeted, and it could receive more tax revenue than was projected. As a result, Reed said: “I don’t expect to dip into our reserves next year.”

Administrators built the plan assuming a 1 percent increase in property values, but the Harris County Appraisal District expects HISD to see a 2 percent increase. Concerns about property appraisal appeals related to Hurricane Harvey led to the conservative projection.

HISD is expected to have about $275 million in reserves at the end of June, equal to about a month and a half of operating expenses. District officials have recommended keeping at least 3 months’ worth of operating expenses in reserve to cover emergency costs.

See here for the background. They could have done this last week, but it was definitely more exciting this way. In all seriousness, I get the urge to not want to dip into the reserve fund again, but 1) given the justifiably conservative revenue estimates that the district will almost certainly exceed, they probably won’t need to, and 2) sometimes the alternatives are worse. This was one of those times, so good call on taking the original path. The Press has more.

The June elections

You may not realize this, but there are multiple elections going on right now around Texas. I’m aware of three:

1. The Klein ISD Tax Ratification Election:

Our shared vision in Klein ISD is that every student enters with a promise and exits with a purpose. In order to make our vision a reality for EVERY student, we need resources. We believe it’s important that every member of the Klein community understands how our schools are funded by the State and local taxpayers. For example, you might be surprised to know that as your home value grows causing you to pay higher school taxes, the State decreases their share of funding.

The above videos explain the current school funding system and the impact it has on the Klein ISD budget. It also explains steps the district has taken over the years to maintain the current educational programs.

See here and here for some news coverage about this election. I only know about it because Klein ISD is in Harris County, up near the Woodlands, and I’ve been getting the daily early vote totals for it. The EV period for this is over and the election itself is tomorrow, the 16th. You can find your polling place here if that applies to you. I’ve no idea why this is being held now as opposed to the May uniform election date, but you can learn more about TREs and why school boards need to have them here and here.

2. The Pearland City Council runoff:

After neither candidate garnered more than 50 percent of the vote as polls closed Saturday, Adrian Hernandez and Dalia Kasseb will face each other in a runoff next month to decide who will be the next Position 4 council member.

“I’m overwhelmed by the amount of support. … I’m excited to keep going,” Hernandez said. “It’s no different today than it was yesterday or how it will be tomorrow. I’ve been serving the city and I’ll keep doing that. I’m going to keep doing what I’ve been doing.”

It’s a familiar result for Kasseb, who faced six candidates in 2017 for a council position before ultimately losing to Woody Owens in a runoff for Position 7.

“I am buoyed to know I can count on growing support from the community,” Kasseb said. “We will continue the fight to become that voice for all on city council and be the solution to the challenges we face in our rapidly growing community.”

In early vote totals, Hernandez had a winning margin of votes, but as Election Day ballots were counted, both Kasseb and G. Sonny Atkins picked away at his lead.

“She’s a formidable opponent,” Hernandez said. “We’re going to look to those people we have not reached yet and fill in those gaps.”

Pearland City Council has staggered three-year terms, so they have elections for a subset of their members every year. Mike Snyder had a decent overview of this a couple of weeks ago. Like the Klein ISD TRE, this one will happen on Saturday, as early voting ended on Tuesday. Voting location information is here and a map is here. At least the runoff this year seems to be a lot less ugly than last year’s was.

3. The special election in CD27.

Twice.

That’s the number of times candidates for Texas’ 27th Congressional District have already had their names on a ballot. For months they’ve traveled the district, shaken hands, and gone to meet and greets. They’ll need to get used to that campaign trail.

That’s because even when the top two contenders to fill the seat — Republican Michael Cloud and Democrat Eric Holguin — arose, the battle on the ballot was still far from over.

Voters will next cast their ballots in the June 30 special election. There could be two more elections after that as well. At the very least there’s one more in November.

[…]

The winner will be in office for less than a year.

That time could be cut down even more if one of the nine candidates on the ballot does not get more than half of the votes. If that happens, a runoff would follow.

When voters head to the polls they’ll see nine names on the ballot — Democrats, Republicans, Libertarians and Independents alike.

Three of those names should be familiar to voters: Holguin, Cloud and Raul “Roy” Barrera. Win or lose in the special election Holguin, a Democrat, and Cloud, a Republican, will face off again in the November general election.

On the last election night, Holguin said the primary runoff election’s outcome would play a “huge role” going into June.

“It shows who the top two candidates are,” he said. “I know there are nine candidates, but we are the ones that are going to be going face to face in November. So we’re the ones that people are going to be paying attention to and really focusing on.”

Last month, Bech Bruun, who lost to Cloud in May, endorsed the former Victoria GOP chair, asking people to vote for him in both June and November. Bruun’s name still will appear on the June ballot.

Bruun said a large part of the endorsement was so hopefully his supporters would switch to Cloud and a runoff would be avoided.

The Corpus Christi Caller also endorsed Cloud for the special election, though they reserved the right to change their mind for November. TDP Chair Gilberto Hinojosa endorsed Eric Holguin, as the only chance Dems have is in a low-turnout context with the bulk of Dem votes going to Holguin. I don’t care for his odds, but we’ll see if the trend of Dems cutting into Republican margins from 2016 holds here. Early voting for this one started on Wednesday, with E-Day on June 30. Oh, and just so we’re clear, Blake Farenthold is still a leech.

But wait! I hear you cry. Wasn’t there also supposed to be a runoff in the special election for HD13? Yes there was, and no there won’t be.

Following a March 6 Primary Election, May 5 Special Election and a May 22 Primary Runoff Election, former Grimes County Judge Ben Leman will take the oath of office Thursday, May 31, as the new Texas State Representative of District 13.

According to the Texas Secretary of State office, Leman was considered duly elected to fill the vacated seat for the remainder of the current term following the withdrawal of opponent Jill Wolfskill from the runoff special election that was set to occur in late summer. Wolfskill made a formal concession from the race May 23 via her Facebook page and submitted a “signed, notarized withdrawal to the office of the Secretary of State” to announce her decision.

“I want to say a big thank you to my family, friends, supporters, and volunteers on the Jill Wolfskill campaign these past four months,” said Wolfskill. “Running this race in has been a great honor and I am so blessed by the amazing support I received, and by the people I’ve had the opportunity to meet throughout this district.”

Wolfskill and Leman had both previously made public comments regarding the concession of the candidate who received the least number of votes in the May 22 Primary Runoff Election to prevent unnecessary financial burdens to the seven counties in House District 13. Leman took the majority of the 14,602 votes with 57.33 percent, while Wolfskill had 43.03 percent.

Leman still has to win the November election against Cecil Webster, but if he does he will have a head start in seniority over his fellow members of the class of 2018. And the good news is we should get the entire month of July off from elections.

We’ll be voting on flood control bonds in August

Not my first choice, but it is what it is.

Harris County Commissioners Court voted Tuesday to seek a special election on Aug. 25 for what likely will be a multi-billion-dollar bond package that, if approved by voters, would be the largest local investment in the region’s flood control system after Hurricane Harvey.

The move comes a month before the start of the 2018 hurricane season and more than seven months after Hurricane Harvey, with the election timed to coincide with the storm’s one-year anniversary. County officials have spent months wrangling over when best to schedule the election, lest the measure fail and scuttle efforts to overhaul the area’s flood control efforts after one of the biggest rain storms in United States history.

“Why August 25?” Harris County Judge Ed Emmett said. “It’s the one year anniversary of Harvey. I don’t think we want to go a year and not be able to say we’re doing something. People who care about mitigation, resilience, flood control, they’ll be energized and they’ll want to go out. Will there be somebody who wants to stand in the face of what we went through during Harvey and say ‘I want to be against it’? I kind of dare them to do it.”

It is not clear yet what the bond referendum will include. The court on Tuesday floated a $2.5 billion price tag — a number that could change as a priority list of flood control projects emerges. Emmett said the number of projects would be in the “hundreds” and likely would include the buy-out of all of the county’s high-priority areas at highest-risk of flooding, approximately 5,500 properties.

A huge chunk of funds, between $500 and $700 million officials estimate, could go toward local matches for federal grants and projects. A match could be required for the completion of four bayou widening and straightening projects underway with the U.S. Army Corps of Engineers along Hunting, White Oak, Brays Bayou and Clear Creek. Bayou engineering projects on Halls and Greens Bayou — some of the areas in the county most vulnerable to flooding — also likely would be targeted.

Emmett said all of the county’s 22 watersheds would see some sort of investment.

The bond funds also could help finance the construction of an oft-discussed third reservoir northwest of the city to contain storm water from Cypress Creek.

See here for the background. I would have preferred to have this on the November ballot, and from the article most of the Commissioners at least started out with that same preference. County Judge Ed Emmett pushed for the August date, and convinced them to go along. Again, I get the reasoning, but the county is really going to have to sell this. Recent history has shown that even non-controversial bond issues with no organized opposition don’t pass by much. This one will have a big price tag, a (minor) property tax increase, and no obvious benefit for anyone who wasn’t directly affected by Harvey, all wrapped up in a weird election date. This should pass – it’s easy to scratch your head and say “how could it not?” – but do not take it for granted. The county still has to get approval from Greg Abbott, which should be straightforward, then formally call the election. I hope they start gearing up the campaign for this in the meantime.

Many more school districts are feeling the pinch

Not just HISD. Not by a long shot.

For eight-straight years, Cypress-Fairbanks and Conroe ISDs earned the Texas Smart Schools Award, bestowed on school districts with prudent financial practices and high academic achievement.

Now, Cypress-Fairbanks faces a $50 million deficit next school year, and Conroe is projected to face its first deficit in nearly a decade in the next two to four years.

They are not alone.

As the Texas Legislature studies potential changes to the state’s school funding mechanisms, the majority of large Houston-area school districts are facing budget shortfalls they say stem from a lack of state aid. Of the 10 largest Houston-area school districts, all but three approved budgets last summer that included deficits of more than $1 million, according to a Chronicle review. At least nine say they may have to dip into reserve funds within the next three to five years if revenues do not increase.

For some, it is more dire. If nothing changes at the state or local level, district officials say Spring Branch ISD in west Houston will be financially insolvent in three years. Cypress-Fairbanks ISD will use up all its reserve funds in four or five years. Pasadena ISD only avoided a $20 million shortfall for the next school year by passing a tax hike referendum, and multiple districts are considering similar measures to keep their schools afloat.

That pain is felt in large and small districts across the state. North East ISD in San Antonio expects to cut $12 million from its budget next year, likely leading to teacher layoffs, according to the San Antonio Express-News. By 2020, budget documents in Ysleta ISD near El Paso show the district likely will draw down its reserve funds by $12 million. Friendswood ISD, which educates roughly 6,000 students in a sliver of southeast Greater Houston, is facing a $1.9 million budget shortfall next year.

“If we’ve been one of the most efficient districts in the state, and we’re facing this crisis, imagine what other districts are dealing with,” Cy-Fair ISD Chief Financial Officer Stuart Snow said.

[…]

Sen. Paul Bettencourt, R-Houston, who sits on the Commission of Public Education Funding, said districts should expand their revenue streams to include sources other than local property taxes and the state. He pointed to Dallas ISD, which pulls in about $10 million annually from philanthropy. United Airlines also staffed one of DISD’s schools with 25 full-time employees, a partnership Bettencourt said should inspire districts elsewhere.

“It’s not going to be one-size fits all — there are many, many ways to do it right,” Bettencourt said. “At end of the day, we want the education system to get students the best educations they can get for best deals taxpayers can support. But we need to look for all the ways we can do it right.”

First of all, to Paul Bettencourt: You cannot be serious. Philanthropy? Are you kidding me? Dallas ISD’s 2017-2018 general revenue expenditures were over $1.4 billion. That $10 million represents 0.7% of the total. You gonna suggest everyone search their couch cushions, too? Oh, and I don’t know about you, but I’m old enough to remember when two of the biggest philanthropic entities in Houston were Enron and Continental Airlines. Good thing HISD didn’t make itself dependent on them, you know?

This is entirely the Legislature’s responsibility. We are here because they refuse to adequately fund schools, and because they use the increases in property valuations to fund the rest of the budget, while blaming local officials for their shortfalls and tax hikes. As with everything else in this state, nothing will change until the people we elect change. If you live in one of these districts, don’t take your frustrations out on your school board trustees. Take it out on the State Reps and State Senators who skimp on school finance, and the Governor and Lt. Governor who push them to keep doing it.

HISD’s budget deficit is a little smaller

A bit of good news.

Houston ISD administrators do not expect to cut magnet programs or re-open the magnet application process ahead of the 2018-19 school year, an announcement likely to ease fears among parents who send their children to choice schools.

Houston ISD leaders said Monday they are lowering the district’s projected budget deficit from about $209 million to $115 million, which would dramatically reduce the level of potential staff and program cuts.

The two announcements reflect the shifting nature of Houston ISD’s plans for major changes throughout the district, which have provoked anxiety among many parents and staff members. District leaders are proposing changes to the district’s magnet and funding systems — with the goal of providing more resources and programs to students in lower-income neighborhoods while facing a significant budget deficit largely brought on by the state’s school finance law.

Administrators are considering whether to phase out some magnet programs that have relatively little student interest or no consistent programming throughout a feeder pattern. District leaders want to better align magnets so students follow the same program from elementary through high school.

Administrators do not expect to cut many magnet programs, but any changes would not be made until 2019-20. Chief School Support Officer Mark Smith said the district did not want to rush any reductions that would force parents to immediately seek new options for their children.

See here for the background. What drove the sunnier budget estimate? Here’s the explanation.

When HISD first began budgeting for the 2018-2019 school year, it was in the immediate aftermath of Hurricane Harvey. Using a worst-case scenario, the district’s financial team projected a $208 million deficit based on four dynamic factors: the Local Optional Homestead Exemption (LOHE) lawsuit, a recapture payment to the state, a potential property tax value decreaseand an anticipated student enrollment decline. Taking direction from HISD Board President Rhonda Skillern-Jones, district administrators crafted a revised budget outlook for the 2018-19 school year.

The district’s legal team feels strongly that the state will prevail in the LOHE lawsuit. For HISD, this means a reduction in its recapture payment because the TEA will recognize half of the 20 percent local homestead exemption given to homeowners. A decision in the lawsuit could come after a hearing this spring. A win would reduce HISD’s recapture payment by $51 million.

Under the Texas Education Code, TEA Commissioner Mike Morath has the authority to adjust property values. Based on the damage sustained from Hurricane Harvey and the lasting impact of the storm on our students and staff, we anticipate the commissioner will adjust property values, which in turn, would reduce our recapture payment. Governor Greg Abbott, Lt. Governor Dan Patrick, and other state leaders have publicly stated their support for this action. Click here to review a September 2017 press release from Lt. Governor Dan Patrick that confirms his support for schools districts in Region IV impacted by Hurricane Harvey, which includes HISD. In addition, Commissioner Morath surveyed school districts after the hurricane to gather projections on their property tax collections post-Harvey. HISD estimates a $42 million adjustment for property value loss associated with Hurricane Harvey.

It was prudent to budget under the worst-case assumption, and it makes sense to adjust on the reasonable expectation that he reality is better. HISD still has a big hole to fill, and changes to the magnet programs will be difficult and disruptive, though long overdue. I confess that I haven’t been following all this very closely – sorry, all the election stuff has taken over my brain – but I will get back into it as the process begins.

HISD working on a bond issue

It’s going to be quite the year for HISD.

Voters living in Houston ISD could be asked to approve a new school bond totaling at least $1.2 billion as early as November, according to a recently unveiled district financial plan.

The bond would finance major construction projects, technology upgrades, fine arts purchases and other capital costs. If the bond request totals $1.2 billion, it would likely come with a tax increase of 3 cents to 7 cents per $100 of taxable value, depending on Hurricane Harvey’s impact on property values, district administrators said.

For a homeowner with a property valued at about $275,000, roughly the average in HISD in recent years, the increase would amount to $80 to $190 per year.

District leaders unveiled the plans over the weekend during a wide-ranging preview of major changes to the district’s budget, magnet schools program and approach to long-failing schools. HISD’s last bond election came in 2012, when two-thirds of voters approved a $1.89 billion request.

District leaders did not present specific projects or amounts, but they’re expected in the coming months to finalize a proposal for school board members. Board trustees must approve sending a bond election to voters.

Administrators said the bond would help finance new campuses in pockets of the city’s west and south sides, where student enrollment has grown, along with upgrades to outdated elementary and middle schools. The 2012 bond largely focused on renovating and building new high schools, with 26 campuses getting about $1.3 billion worth of construction.

The district’s financial staff estimates that a $500 million bond request could be passed without raising taxes, but the amount “would not do much for a school district of this size,” HISD Chief Operating Officer Brian Busby said.

“It would be something that would possibly pass, depending on what you do, but it would not be as impactful as we need a bond to be, based on our strategic vision moving forward,” Busby said.

Add this to the other items already on the plate and once again you can see what a busy year the Board has for itself. The initial reaction I saw to this on Facebook was not positive, which may have been the result of this coming on the heels of the announcement about changes to the magnet school program – lots of people I know are already plenty anxious about that. It’s also a weird year for politics, people feel like there’s too many things for them to keep track of, and I’m sure some people are wondering why there’s another bond issue six years after the last one. HISD bond issues generally pass easily – the one in 2012 got 69% of the vote – but I suspect the Board and Superintendent Carranza are going to have to put together a solid plan and sell it to the voters, with a strong promise of engagement and accountability. I would not take anything for granted.

HISD faces major changes

This is a very big story, but a key component to it is not discussed here.

Houston ISD officials said Saturday the district will need to cut about $200 million from its 2018-19 budget to bring spending in line with an increasingly gloomy financial outlook.

In an equally momentous move, Houston ISD officials also proposed far-reaching changes to how the district operates its magnet and school choice systems, some of the boldest moves to date by second-year Superintendent Richard Carranza.

Still reeling from Hurricane Harvey, Houston Independent School District officials revealed at a board meeting Saturday that the district is facing a double whammy: A multimillion-dollar, state-mandated “recapture” payment requiring districts with high property values to “share the wealth,” and an expected drop in enrollment and tax revenue because of the devastating storm, which severely damaged schools and delayed the start of classes by two weeks.

The proposed cuts come at an inopportune time, with the district battling to stave off a potential state takeover because of 10 chronically under-performing schools.

Although the measures outlined Saturday are preliminary and could change significantly before HISD’s board votes on them, officials acknowledged that the district is entering an uncertain time.

“It’s a sea change for HISD,” said Rene Barajas, the district’s chief financial officer. “But at the end of the day, from a budgetary perspective, we’re still going to get the job done. It’s just going to be harder.”

There’s a lot more and there’s too much to adequately summarize, so go read the rest. We know about the recapture payments, which even though they have been reduced due to Harvey are still significant. We know HISD has been talking about revamping its magnet programs for some time, and there’s a cost-savings component to that as well. We know that property values and enrollment have been affected by Harvey, and we know how daily attendance determines the amount of money the district gets from the state. So none of this is a surprise, though having to deal with all of it at once is a big shock.

What’s missing from this article is any mention of what the state could and should do to help ameliorate this blow. I think everyone agrees that if a school building is destroyed by a catastrophic weather event, it should be rebuilt via a combination of funding sources, mostly private insurance and emergency allocations from the state. Why shouldn’t that also apply to the secondary effects of that same catastrophe? It’s not HISD’s fault that its revenues, both from taxes and from state appropriations, will be down. There needs to be a mechanism to at least soften, if not remove, this burden. Bear in mind that one reason why the drop in property values is such a hit is because the state has shoved more and more of the responsibility for school finance on local districts. If Harvey had happened even a decade ago, the appraisal loss would still be felt, but not by as much. That’s not HISD’s doing, it’s the Legislature’s and the Governor’s and the Lieutenant Governor’s, all with the approval of the Supreme Court.

But what can be done can be undone. With little to no pain on its part, the Lege could tap into the Rainy Day Fund to get HISD past the worst of this, or it could recognize that the nearly one billion it appropriated last session for “border security” is little more than macho posturing, an endless boondoggle for a handful of sheriffs, and an sharp increase in traffic citations, and redirect some of that money to HISD and any other district in similar straits. There are other things the Lege could do, but all of it starts with the basic principle that the Lege should do something to help out here. When are we going to talk about that?

State of the County 2017: Ed Emmett versus state leadership

That sound you heard was a fight breaking out.

Judge Ed Emmett

Harris County Judge Ed Emmett on Tuesday used his annual State of the County speech to blast state leaders who he said attack local governments and seek to cut needed taxes but offer no real solutions to the myriad problems Texas’ large urban counties face.

Before a crowd of hundreds at NRG Center, Emmett called on state officials to invest roughly $500 million in a third reservoir and dam to boost area flood control efforts, fund a beleaguered indigent health care system, and revamp “broken” tax policies that force the county to rely on property taxes to serve an unincorporated area that, on its own, would be the fifth-largest city in the country.

In addition to helping with the county’s flood control efforts, Emmett called on the state to contribute more for mental health care and transportation improvements, citing the need for an Interstate 69 bypass on the east side of the county and renewed emphasis on railroads and technology to move freight from area ports.

He also reiterated his call for state leaders to accept increased Medicaid funding from Washington.

“The next time a state official makes a big deal about a fraction of a cent cut in the property tax rate, ask them why they won’t help Harris County property taxpayers fund indigent health care,” the judge said. “State leaders who are eager to seek for disaster relief should also be willing to accept federal dollars to provide health care for poor people. That would be real property tax relief.”

The state, he said, should treat the county more like a city, which by law can levy a sales tax and pass ordinances. The county is an arm of state government and relies on property taxes for most of its revenue.

“The whole point of today’s speech was to say ‘enough is enough,'” Emmett said afterward. “We need to be able to provide the services and the government that people expect in an unincorporated area.”

[…]

Emmett criticized the bills that would have forced the county to get voter approval on taxes and spending.

“Such a populist approach might sound reasonable, but the late British Prime Minister Margaret Thatcher, who nobody ever accused of being a liberal, described direct referenda as ‘a device for dictators and demagogues'” he said.

He also lit into lawmakers’ attempts to limit property tax collections during the last legislative session, saying leaders “attacked counties and cities and other local governments, all the while offering no real solutions.”

“County government relies almost completely on property tax revenue, but the property tax is widely hated, and wholly inadequate as a means of financing the unique urban government that we have. Unfortunately, narrow-minded politics has pushed unfunded mandates from the state onto county government,” Emmett said.

“It is just pure ugly politics. And, by the way, the portion of county taxes paid by business is, I don’t need to tell the business community in this room, growing. We are reaching the point where tax policies are a drag on economic development.”

You can read the whole speech here. Most of the criticisms Emmett made about state leadership and recent political actions are in the story, but the whole thing is worth a read. Oh, and he was introduced by outgoing House Speaker Joe Straus, which was a further provocation. Like the useless demagogues they are, Dan Patrick and Paul Bettencourt responded petulantly in the story. This is another skirmish in the culture wars of the Republican Party, and Republicans who are in the Ed Emmett/Joe Straus camp – including Emmett himself – are going to have to decide next year if they really want the likes of Greg Abbott and Dan Patrick dictating to them. A vote for the status quo is a vote for four more years of the things that Emmett was railing against in his speech.

Council passes dumb forced tax cut

This is where we are.

Mayor Sylvester Turner

City Council rejected Mayor Sylvester Turner’s proposal to leave Houston’s tax rate unchanged from last year Wednesday, instead approving a tiny rate cut to comply with the voter-imposed cap on property tax revenues.

Turner had proposed using Hurricane Harvey to invoke a disaster exception clause in the 13-year-old revenue cap and leave the rate at 58.642 cents per $100 in assessed value. That plan would have let the city collect $7.8 million next year for storm recovery costs in addition to what the cap otherwise would allow, or about $7 next year for the typical homeowner.

It was the same process, Turner stressed, that his administration and former mayor Annise Parker’s administration had followed to collect funding above the revenue cap after floods in each of the last two years – actions that went unnoticed by council members and news media at the time.

The council nonetheless voted 15-2 to approve an amendment from Councilman Mike Knox to lower the rate by 0.221 cents – the rate City Controller Chris Brown had said the revenue cap dictated independent of Harvey-related expenses.

You can read the rest if you want to. I’ve said my piece, and I don’t have anything to add to that. If you need a little more, go read Mayor Turner’s response to Paul Bettencourt, which is exactly what needs to be said to that little toady.

Another property tax rate dustup

I have four things to say about this:

Mayor Sylvester Turner

Mayor Sylvester Turner plans to ask city council on Wednesday to sidestep the voter-imposed revenue cap by approving the same property tax rate as last year.

According to City Controller Chris Brown, the city would need to cut the property tax rate by about one fifth of one cent to comply with the revenue cap. The difference would mean about $7 next year to the average Houston homeowner, but the potential political damage to Turner could be much more.

Council must set the tax rate at its Wednesday meeting, but no specific rate was listed on the council agenda and no explanatory backup material was provided to council members until Monday night. Several council members, informed of Brown’s Monday afternoon memo outlining the mayor’s plan, responded with an incredulous, “What?”

The information angered the mayor’s critics and confused his allies on the council a week before voters begin heading to the polls to consider a crucial $1 billion bond that would cement Turner’s landmark pension reforms and another $495 million in city improvement bonds.

To comply with the revenue cap, Brown said, the council would need to set the tax rate at 58.421 cents per $100 of assessed value, not leave it at last year’s 58.642 cents. The difference to the city general fund, he estimated, is $7.9 million.

“I’d love to think of it as a misunderstanding,” Councilman David Robinson said. “Conspicuously on the agenda today it was not disclosed, so it certainly raised a lot of questions. Call it, what – $8 million? It sounds like a very small amount to have a standoff about.”

[…]

Turner’s spokesman Alan Bernstein said Monday afternoon that the mayor’s proposal to leave the rate flat did not rely on invoking the disaster declaration language, but hours later acknowledged that clause is the basis for keeping the same rate.

“The mayor clearly said at this meeting, the press conference with the governor and everybody, ‘We are not going to be invoking the disaster clause,'” Brown said late Monday. “So, now they’re saying they’re going to do it. OK, they can do that. My opposition is not if they do it or don’t, my opposition is that they do it and nobody knows about it.”

A Monday evening memo from interim finance director Tantri Emo said the charter not only allows the mayor to invoke the disaster clause to collect an extra $7.9 million for Harvey expenses, but also provides no process by which Brown is required to verify the tax rate. Therefore, Bernstein added, it is not relevant that Brown cannot verify the city’s estimated $1.1 billion in general fund damages from Harvey before federal and insurance reimbursements.

“Since he can’t independently validate them, he’s not counting them,” Bernstein said. “Well, we’re counting them, and we feel like he’s not interpreting this all correctly. We’re certainly not busting the tax cap. The mayor disagrees with the controller’s conclusion.”

1. Let’s get one thing straight up front: This is not in any way an “increase”. This is because leaving something the same as it was before is not an increase, in the same way that my remaining the same height does not mean that I have gotten taller even if for some reason I was supposed to shrink. One of the Council members quoted in the story referred to this as an “increase”, and you can be sure others will echo him. Don’t fall for it.

2. I don’t know what was going on in the Mayor’s office with this, in particular with the peculiar lack of communication followed by the about-face on their rationale, but this was handled badly. They should have been up front about the fact that all their calculations were based on leaving the tax rate the same. Which, let’s be clear, in a sane non-revenue-cap world is exactly what would have happened without anyone even noticing that it was a thing that was happening. Bring it up early on, during the (successful) standoff with Greg Abbott, and there would be nothing more to it by now. Like I said, I don’t know what they were thinking, but this is a mess of their own making, and they need to clean it up.

3. More to the point, this was a missed opportunity to drive home the message that the revenue cap is stupid, harmful policy. If we didn’t have a revenue cap forcing this on us, would anyone have proposed a tax rate cut right now? Can you imagine it: “Hey, let’s make a tiny little cut to the tax rate that will have no effect at all on anyone but will cost the city eight million dollars at a time when we’re up to our necks in hurricane recovery expenses”? It’s stupid policy that forces us to make stupid choices. The revenue cap needs to go.

4. All that said, I think CM Robinson has the right answer. If this were the Lege, as Mayor Turner surely knows, they’d have solved this by delaying payment of an invoice or two from this accounting cycle to the next one, thus making the “deficit” disappear in a puff of magic pixie dust. I have to believe that the city can do something similar if it comes down to it.

The lost Harvey tax break

I have mixed feelings about this.

Rep. Sarah Davis

Owners of nearly 300,000 homes damaged by Hurricane Harvey in Texas won’t see any break in their property taxes because of political wrangling this year in the state Legislature over completely unrelated issues – including, one Houston Republican says, the bathroom bill.

A property tax reform bill that would have required all local governments to reappraise damaged homes and businesses and lower the tax bills came within a single round of votes on four different occasions. If the mandatory reappraisal proposal had become law, it would have all but assured that the tens of thousands of homes and businesses damaged or destroyed statewide because of Harvey would have received a reduction in property taxes this year.

But it never passed, and according to the state lawmaker who came up with the idea, it’s because of the bathroom bill. Rep. Sarah Davis, R-Houston, lays the blame on Lt. Gov. Dan Patrick, who she contends was trying to blackball her bills.

“I have little doubt its slow death in the Senate is because of social issues like the bathroom bill,” said Davis, whose district flooded badly during the 2015 Memorial Day storms and the 2016 tax day storms.

Currently, reappraisals after natural disasters are optional for local governments and most are like Harris County and Aransas County in saying they won’t do it because they cannot afford it.

A home in Houston that was valued at $200,000 before the hurricane, but worth just $30,000 after, would have seen a $700 cut just in school taxes, according to the Texas Taxpayers and Research Association, which strongly backed the Davis proposal.

“It was really one of my No. 1 priorities,” said Davis, whose original bill would have taken effect Sept. 1.

But that is likely why the bill never cleared the Senate, she said. Davis was a vocal opponent of the so-called bathroom bill that was a top priority in the Texas Senate.

[…]

Texas law already allows counties, cities and other local governments to reappraise properties after a storm, but few ever do because of the lost revenues that it could result in and because of how expensive and time consuming the reappraisal process could be during a time governments are trying to finalize their budgets. If governments do the reappraisals, the full cost is on the local governments.

“It’s not a very workable solution,” Harris County Judge Ed Emmett, a Republican, said about why he has not voluntarily called for the reappraisals in Harris. “It’s not that I don’t have sympathy for people and what they’ve lost.”

He said the problem is the reappraisals would cost $10 million in a county as big and urban as Harris County. Plus the county would lose revenue from tax collections at a time it most needs the money to address the natural disaster recovery.

He added that property owners still will get the benefit of the Jan. 1 appraisals for the next year’s taxes. That almost certainly will result in lower tax bills for homeowners with damaged properties next year.

Similarly, in Aransas County – where Harvey made landfall as a Category 4 and demolished 36 percent of all homes and businesses – there will be no reappraisal. Aransas County Judge C.H. “Burt” Mills Jr. said there isn’t time or money to get it done and said it would only hurt tax revenues at a time when every source of funding the county relies on is in jeopardy.

“All of our income is in the toilet,” Mills said of a county that relies heavily on tourists to generate sales taxes and fill rental properties.

Let’s start with the obvious. Of course the bathroom bill was the reason why this bill never got a vote in the Senate. This is how Dan Patrick operates. You can admire his hard-nosed tactical consistency, or you can bemoan his willingness to sacrifice the greater good in service of his narrow partisan interests, but you can’t deny the premise.

I certainly get the impetus for Rep. Davis’ bill. Though all the activity on this came before Harvey, Davis represents neighborhoods that were hard hit by the floods of 2015 and 2016. Giving people whose houses have been greatly damaged or destroyed a break on their property taxes has a lot of obvious appeal. That said, I agree with Judges Emmett and Mills. The counties – and cities and school districts – that these houses are in will be facing large extra expenses as a result of the disaster in question, and they’ve built their budgets for the year based in part on the original values of those houses. When the houses are reappraised for the next year, everyone can plan their budgets based on the expected lower values. Is the benefit of an extra year’s lower tax bill for affected homeowners worth the cost?

There is, of course, a simple enough way to resolve this: Have the state cover the difference. We agree that homeowners whose houses have been devastated deserve a break. We agree (I hope) that the cost of that break should not be a burden on counties and school districts that are themselves recovering from the damage of the natural disaster. The amount in question would be a relative pittance for the state. Why not let the state budget make the affected local government entities whole? Because that’s not what we do. Dan Patrick and his buddies take from the locals, they don’t give back. They’d be more than willing to take the credit for the cut, but it’ll be a cold day in August before they’d be willing to bear the cost. I appreciate what Rep. Davis was trying to do with her bill, but without this I can’t quite support it.

You don’t have to attend those tax rate hearings now

They’re not a thing any more.

Mayor Sylvester Turner

Mayor Sylvester Turner on Friday said he would withdraw a proposed property tax rate hike after Gov. Greg Abbott handed him a check for $50 million to help fund the city’s recovery from Hurricane Harvey.

That also likely means few public hearings on the proposed rate hike, which would have been the first from City Hall in two decades.

  • The first was held last Monday, and featured a few fireworks.
  • The second hearing remains scheduled for tonight at 6 p.m., since the governor’s check (which matched the $50 million Turner had intended to collect from raising taxes) was delivered too late to change the meeting time.
  • Council on Wednesday will consider cancelling the third hearing, which had been set for Oct. 11 at 9 a.m.

Turner initially had announced plans to enact an 8.9 percent tax rate hike, noting that a voter-imposed cap on property tax collections allowed him to propose a one-year exemption in the event of a federally declared disaster. Such a hike would produce about $113 million in additional revenue.

[…]

Some council members opposed to the increase said they believed the mayor lacked the votes to pass it. And if it had passed — days before the start of early voting — many at City Hall believe the rate hike could have angered voters enough to threaten the city’s plans to issue $495 million in general obligation bonds in November, in addition to $1 billion in bonds tied to Turner’s landmark pension reform plan.

See here for the background. I wouldn’t get too wrapped up in the claims that the proposed tax rate hike didn’t have the votes to pass. None of that would have mattered until the day Council actually voted on it. Besides, the goal wasn’t raising the rate, that was just a means to an end. The goal was paying the bills that were coming due – trash removal, insurance deductible, and the next insurance premium. Council members would have been welcome to argue against those things, or to propose alternate ways of paying for them, at the meeting when a vote was scheduled, or any time before then. Now they don’t have to. If Mayor Turner is relieved to not have to push this through now, I daresay the Council members who didn’t want to oppose him on it are relieved, too.

Houston gets state recovery funds, property tax rate hike shelved

Was that so hard? I ask you.

Mayor Sylvester Turner

Mayor Sylvester Turner on Friday said he would withdraw a proposed property tax rate hike after Gov. Greg Abbott handed him a check for $50 million to help fund the city’s recovery from Hurricane Harvey.

The exchange came as the mayor and governor held a joint City Hall news conference, a sharp departure from the last several days when the pair had traded letters and criticism over each other’s Harvey response.

Turner had tried to pin his proposed tax hike on the state’s unwillingness to tap its $10 billion savings account, while state officials viewed the city as seeking a blank check rather than targeting specific emergency funds in the state budget.

Ultimately, Abbott said he would draw upon a disaster fund within the discretion of his office, producing the $50 million amount Turner had intended to collect from residents’ property taxes.

See here and here for the background. The Trib adds some details.

The money, which comes from the $100 million disaster relief fund appropriated to Abbott’s office during the last legislative session, will go toward immediate relief needs such as reconstruction, Abbott and Turner said at a joint news conference in Houston. Abbott said long-term recovery and preventive measures would be funded by the federal government and the state’s $10 billion savings account, known as the Rainy Day Fund, but not until exact costs for recovery are known.

“The time to use the thrust of the Rainy Day Fund is when the expenses are known,” Abbott said. “So the members of the Legislature know how best to use the Rainy Day Fund.”

[…]

During the Friday news conference, Abbott said there “is a possibility for a special session” to allocate funds for recovery and prevention once those costs are better known.

“Now that the hurricane winds are calm … it’s time that we begin the process of rebuilding Texas, and that’s a tall task,” Abbott said. “This is what the state of Texas is for … We’re proud to be here wearing the same jersey working for the same team.”

Still, Abbott said the $10 billion Rainy Day Fund would only be able to cover a “fraction of the costs” of longer term recovery and prevention. Turner added that he and Abbott have discussed future preventative measures such as a third reservoir for flood waters, which could cost up to $400 million, and expanding bayous, which could cost $311 million. The two said they have also discussed a “coastal spine” — a protective seawall and floodgate system — along the coast, which Turner estimated to be a roughly $12 billion project.

So the money ultimately came from a funding source Abbott controlled, not the Rainy Day Fund, though as noted there may be some use of that later on. I don’t care what the provenance of the money is, but I do wonder why this was handled so clumsily by Abbott. Was this always what he intended to do but just never could explain it lucidly, or was this where he ended up after realizing how ridiculous he looked? I have no idea. That said, one must give credit where it is due, so kudos to Abbott for eventually figuring this out and doing the right thing. Even bigger kudos to Mayor Turner for getting the job done. This is what we elected him for.

Harris County considers its budget post-Harvey

They have some choices, and some constraints.

Harris County government departments could see their budgets reduced by up to 5 percent as property taxes take an expected dip due to Hurricane Harvey’s widespread destruction.

The estimate is preliminary, County Budget Officer Bill Jackson said Friday. The extent of an anticipated decrease in property tax revenues will be determined after properties are appraised Jan. 1.

Jackson said the county plans to keep budgets flat, if possible. Most departments have received increases every year since the 2008 recession.

[…]

It is not clear yet how much the storm has affected Harris County’s tax base as the extent of damage to property still is being determined.

Damaged homes will be worth less, and those owners can expect smaller property tax bills. In other cases, repairs to homes or other buildings could bring them back up to their original value. Properties unaffected by floodwaters could see a jump in value.

Jackson said the county’s public contingency fund – roughly $100 million – has helped pay for Harvey-related expenses, such as debris cleanup and overtime for county personnel who worked during and immediately after the storm. Jackson said Harvey-related overtime has totaled some $12 million, so far.

The county still is assessing what is likely to be hundreds of millions of dollars of damage to infrastructure, but most of that will be covered by insurance and some repairs can be reimbursed by the federal government.

Harvey’s impact on the county’s budget likely will come from a dip in property tax revenues, Jackson said. The county relies on property taxes for most of its revenue. Unlike the city, it does not collect a sales tax.

The possible property tax rate hike would come in the event the county does float bonds to rebuild and fortify its flood mitigation infrastructure. For now, the tax rate remains the same. The county also spent some money to buy out 200 homes in the more flood-prone areas. Needless to say, there would need to be a lot more of that to really make a difference, but it’s a start.

Abbott has no interest in helping Houston

So much for that.

If the state taps into the Rainy Day Fund to help with recovery following Hurricane Harvey, it won’t be until the next legislative session, Gov. Greg Abbott said during a news conference Tuesday.

Abbott’s announcement comes after Houston Mayor Sylvester Turner wrote to the governor asking the state to use the $10 billion fund. Turner said without significant state help, Houston will be forced to raise property taxes for one year to bring in $50 million for recovery efforts, which would cost the owner of an average Houston house $48.

Turner said he would not have proposed the tax hike had the governor called a special session to tap into the fund.

Abbott, who has said the state has enough resources to address Harvey-related needs between now and the next legislative session, added Tuesday that the state has already granted Houston almost $100 million for debris removal and established an “accelerated reimbursement program” for recovery efforts.

Abbott said he would pay any invoice the city submits to the state within 10 days.

Turner “has all the money that he needs,” Abbott said. “He just needs to tap into it,” referring to money in Tax Increment Reinvestment Zones.

In an emailed statement Tuesday, Turner spokesman Alan Bernstein said Houston “cannot raid funds that the state has indicated cannot be raided – and which are largely for drainage projects to prevent future flooding anyway.”

Remember when we were talking about how Harvey has changed things in the state? Boy, those were the days. I believe this should settle once and for all what the Rainy Day Fund is for: Absolutely nothing. It’s an illusion. We should take all the money in this fund, convert it to gold bullion, and bury it in Greg Abbott’s backyard, perhaps next to one of the wells he had drilled to water his lawn during droughts. That would do us as much good as the fund actually does now. Maybe this might inspire someone to run against Abbott. It’s as easy an issue as you’ll get to run on. In any event, we’re on our own, because special sessions are for potties but not hurricane recovery. Thanks, Abbott!

UPDATE: Also, too, other parts of the state are in really bad shape. Sure, there’s insurance and FEMA and charity and volunteers, and all of those things should be utilized to the maximum. But does that mean the state gets off the hook, or that it just gets to sit back and wait to see what’s left over, which it then may get around to helping out with if it feels like it and if it doesn’t feel “blackmailed” by local officials who are trying to do their jobs? The lack of leadership here is as deep and pervasive as the rainfall was a month ago.

Mayor Turner lowers tax rate hike amount

I’m sure we’re all glad to see this.

Mayor Sylvester Turner

Mayor Sylvester Turner on Wednesday said the temporary property tax rate hike he has proposed would be cut in half after federal officials approved his request to increase reimbursement for the city’s Hurricane Harvey recovery efforts.

Turner earlier this month had pitched an 8.9 percent increase for one year, but said it would not be enough to cover all of the city’s cost of recovering from the unprecedented storm and flooding. It would be the first rate hike in two decades.

On Wednesday, he said that increase could be halved – to an extra $50 next yearfor the owner of a $225,000 home with a standard homestead exemption – thanks to a White House decision to boost reimbursement of many of the city’s recovery costs from 75 to 90 percent.

“We’re going to do everything we can to hold our line. We’re trying to minimize our request,” Turner said. “I understand what people’s concerns are with what they’re going through in their homes, and we don’t want to add to the burden.”

[…]

No tax hike would be necessary, Turner said, if state leaders agree to tap their roughly $10 billion rainy day fund. That suggestion drew support from council members.

“We need it now. It’s raining,” said Councilman Jack Christie, who has spoken against a tax rate hike. “We’re behind you to do that to where we don’t have to raise taxes.”

Several times in recent days, Gov. Greg Abbott has said he expects funds will be tapped to pay for Harvey costs, but said damage estimates must be completed before dollars are withdrawn. The latest tally Wednesday projected $574 million in damage to public infrastructure, including $177 million in Harris County.

“I think most people understand that Texas will be tapping into the rainy day fund,” he said in San Antonio last week. “The important thing, though, is that we address the economic issues appropriately. We need to first understand what obligations we’re going to have, how much they will amount to, and decide upon the best strategies to pay for that.”

See here and here for the background. You know what could eliminate the need for any tax hike whatsoever? If the state of Texas, which has some $10 billion sitting around doing nothing, were to cover the remaining costs that insurance and the feds won’t. I wonder if anyone has briefed Paul Bettencourt about this possibility, since he seems to be so entirely bereft of constructive ideas. To be sure, even Dan Patrick has been talking about using the Rainy Day Fund to help Houston and everywhere else recover from Harvey. That’s both good and necessary. But the city of Houston has to pay for things now, and it has to make sure it has the financial wherewithal to pay for those things now since it is not allowed to carry expenses over from one accounting year to another (this is another way of saying the city must “balance” its budget), so unless there’s a firm commitment in place from the state that the city can rely on, it’s got to make its own plans to pay for any uncovered expenses. If Paul Bettencourt and the usual suspects on City Council don’t like that, they are welcome to direct their concerns to Greg Abbott and Dan Patrick. The Press has more.

Paul Bettencourt advocates doing nothing to rebuild after Harvey

He has nothing constructive to offer, that’s for sure.

Sen. Paul Bettencourt

One of the top Republicans leaders in the Texas Legislature is slamming the city of Houston and other local governments for trying to raise taxes on homeowners in the name of hurricane recovery.

And he’s certain the increase will provoke a response of some sort from the Legislature.

“I don’t understand this mindset,” state Sen. Paul Bettencourt, a Republican from Houston, said. “It’s callous.”

He said homes have been flooded and damaged, and local governments’ first reaction appears to be raise taxes on those same people even though local officials have emergency funds and federal aid is on the way.

“It’s beyond tone deaf,” said Bettencourt, who is the chairman of the Senate’s Republican caucus. “I don’t believe governments should be showing this type of attitude when people are down.”

But Houston Mayor Sylvester Turner’s office said they are left with few other choices. The city already dipped into its emergency funds and while they are getting federal help, they city is still left with 10 percent of the debris removal costs, said Alan Bernstein, communications director for Turner.

“So how’s it going to get done?” Bernstein asked if the city doesn’t get additional revenue to pay for it all.

Happy thoughts and pixie dust, I guess. You will note that Bettencourt does not even mention the possibility of using the Rainy Day Fund to help cover these costs. At this point, I have no idea what someone like Bettencourt thinks that fund is for. It’s clearly not for its intended purpose of economic stabilization during a downtown, and now it’s equally clear that he doesn’t think it’s for the Rick Perry-stated purpose of covering disaster costs. Nor does he offer any other suggestion as to what local governments could do, probably because saying things like “not pay their employees or contractors for the work they will need to do, and not invest in any form of flood mitigation” is probably something even he realizes would be unwise. That leaves doing nothing, and maybe finding a convenient scapegoat for one’s own inaction. The word for that is “craven” – I would accept “cowardly”, too – and it’s a perfect fit for Paul Bettencourt.

HISD may get a recapture reprieve thanks to Harvey

Talk about a mixed blessing.

The Houston Independent School District may be able to avoid paying part – or perhaps all – of its over $100 million state-mandated recapture payment.

The potential reprieve comes after a school board lawyer found a state law allows districts that suffer storm damage to use recapture dollars to help campuses get back on their feet.

[…]

David Thompson, an attorney for Houston ISD’s Board of Education, said the law is meant to allow districts to use what they would have paid to the state to cover disaster-related costs not covered by insurance or FEMA.

“Think of all the things districts spend money on that you can’t insure or reimburse,” Thompson said. “All the thousands of personnel hours, the transportation costs after all the bus routes are out the window and kids are scattered in different areas.”

Thompson said he doubts the law will allow the district to get out of paying its entire recapture bills for the 2017-2018 and 2018-2019 fiscal years, which could be over $200 million next year alone. But he said the law will still allow the district to keep a “significant” amount of its local money.

Well, I’m glad that law, which was passed in 2009 after Hurricane Ike, is on the books, and I’m extra glad that David Thompson was sharp enough to remember it and bring it to the state’s attention. The story doesn’t indicate what the process is for this, though I’d imagine that it’s up to the TEA to decide how much recapture money HISD gets to keep and how many times it gets to apply this exemption. HISD’s total costs for Harvey are higher than a couple years’ worth of recapture payments so it’s not a complete solution, but this sure will help. We’ll have to see how the Board makes up the difference.

Harris County may do Harvey bonds

Turns out Harvey recovery will cost money. Who knew?

A majority of the Harris County Commissioners Court on Wednesday said they would support a large bond issue, perhaps upwards of $1 billion, and a tax increase to pay for it. The bond issue would bolster cash-strapped flood control initiatives, which could include a improvements to waterways and buyouts of properties that repeatedly flood.

After Hurricane Harvey’s widespread devastation and severe floods of the last few years, Harris County Judge Ed Emmett and commissioners Steve Radack and Jack Cagle, all Republicans, said in interviews Wednesday afternoon that they would favor a bond issue.

A bond proposal and corresponding tax rate increase would have to be approved by voters countywide, after a majority of the five-member Commissioners Court vote in favor of calling the election and placing the proposal on the ballot.

As to how early such an election could be called, First Assistant County Attorney Robert Soard said his office was reviewing the potential timing of an election.

[…]

Emmett said the bond issue would likely need to be $1 billion at a minimum.

County Budget Officer Bill Jackson said it is not immediately clear how much of a tax rate hike, if any, would be needed to pay for the bonds. If the county issued $1 billion in bonds at once, today, it would need roughly a 2-cent hike in the property tax rate.

I presume it’s too late for this year. so it’s a matter of when this could be done in 2018. The county could easily do this next November, it’s more a question of whether they can get it on the ballot sooner than that if they want to. There will need to be details filled in on what this bond would entail, but it sure seems like a worthwhile thing to do. I mean, if you think repairing the damage and investing in better flood mitigation going forward are worthwhile, that is. Perhaps someone should ask the Harris County Republican Party, which reflexively opposed Mayor Turner’s proposal, saying the city should “follow Harris County’s lead”. One could argue the county is now following the city’s lead. I’d just argue that by taking action, both the city and county are leading. Isn’t that what we want?

Council to hold hearings on proposed tax rate increase

Here’s your chance to be heard.

Mayor Sylvester Turner

Houston City Council set the ball rolling Wednesday on Mayor Sylvester Turner’s proposed 8.9 percent tax rate hike to help fund Houston’s recovery from Hurricane Harvey, in what would be the first hike from City Hall in more than two decades.

The council voted to schedule three public hearings on the issue, which is expected to reach a formal vote on Oct. 18.

Those hearings will be held at City Hall on:

Sept. 25 at 6 p.m.
Oct. 2 at 6 p.m.
Oct. 11 at 9 a.m.

[…]

The mayor said his staff will work over the next two to three weeks to better estimate what the insurance policies will cover, what the Federal Emergency Management Agency will reimburse, and what the city will be left to pay itself.

After that review, Turner said, the proposed 8.9 percent increase could be reduced.

See here for the background. Campos says he wants specifics. Sounds like we ought to have them by the end of this process. I note in passing that the Harris County GOP has put out a statement opposing this proposal. I say no trash collection for them until all the Harvey debris has been carted off, too.