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property taxes

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.

Mayor seeks one-year tax hike for Harvey cleanup

This stuff isn’t going to pay for itself, you know.

Mayor Sylvester Turner

Mayor Sylvester Turner will ask City Council to approve an 8.9 percent hike in the city’s tax rate this fall to help Houston recover from Tropical Storm Harvey, in what would be the first tax rate hike from City Hall in more than two decades.

The average Houston homeowner would pay $118 more in property taxes next year under the proposal, which will begin a series of public hearings later this month and reach a formal vote in mid-October.

The tax rate would rise from 58.64 cents per $100 of appraised value – the lowest city tax rate since the late 1980s – to 63.87 cents. That was the rate from 2009 through 2013, when a 13-year-old voter-imposed limit on Houston’s property tax collections first began forcing City Council to cut the rate each year to avoid bringing in more revenue than was allowed.

Turner is able to propose an increase beyond the strictures of the revenue cap – allowing the city to collect an extra $113 million for one year – because Harvey placed Houston under a federal disaster declaration.

“If this is not an emergency, I don’t know what is. What we’re able to recoup from one year, the $113 million, will not even be enough to cover the expenses we will have incurred,” Turner said Monday. “What we don’t get from the feds we’ll have to come up with ourselves. I would be not doing my job if I did not advance it.”

Debris removal could cost more than $200 million and will require Houston to foot 10 percent of the bill without being reimbursed. The city also lost 334 vehicles to floodwaters and saw its municipal courts complex, city hall and its adjacent annex and two wastewater treatment plants knocked offline.

[…]

If adopted, the higher rate would take effect only for homeowners’ January 2018 tax bills. Come the following January, the emergency period would end and the city’s tax rate again would be dictated by the voter-imposed cap, which limits the annual growth of Houston’s property tax revenue to the combined rates of inflation and population growth, or 4.5 percent, whichever is lower.

State Sen. Paul Bettencourt, R-Houston and key revenue cap proponent, said he wants to speak with the mayor to remind him that homeowners’ assessed values are rising, meaning a tax rate hike would amount to a double increase.

Bettencourt refrained from outright criticism of the proposal and praised much of the mayor’s response to the storm. He urged caution on the tax proposal, however.

“The rate is just one half of the equation. The other half is how much the value has gone up,” he said. “This is a delicate public policy issue because we’ve got Houstonians that are literally flooded out of their homes and many people have been affected so they’re not in a position to pay the bill easily, much less if it increases.”

The average Houstonian in a $225,000 home with a standard homestead exemption sends $1,321 to City Hall annually. Turner’s proposal would see that bill rise by $117.86 next year.

Let’s be clear about a couple of things. Thanks to the revenue cap charter amendment, this can only be a one-year increase. The rate will be what we had from 2008 to 2013, so it’s not like this is some unprecedented assessment. The city can’t run a deficit, and it can’t borrow money without getting authorization from the voters. The property tax rate is basically the only mechanism the city has to raise this kind of money. The city will get some federal funds, but it may not have control over their appropriation, and some of those funds as noted in the story are contingent on the city putting up money as well. Lord only knows what the state will pay for, and the county will do its own thing.

The point here is that the city has some big unexpected bills to pay. It has to pay for a lot of overtime for police officers and firefighters who were rescuing people during the floods and who are dealing with aftereffects like traffic control. It has to pay for a lot of overtime to Solid Waste employees who are working to pick up the enormous piles of trash around the city. Your taxes are going up by a couple hundred bucks to pay for this. If you have a problem with that, I don’t know what to tell you, other than I can’t abide that kind of thinking.

Some people will say that we should find costs to cut instead. I will remind you that the vast majority of the city’s expenses are for personnel, and in this particular case the extra unbudgeted expenses are largely for overtime pay. Unless you think all these people should have worked for free, this argument is nonsense. Every time a government entity faces a budget shortfall, I hear people justify cutting programs and services as “shared sacrifice”. In my experience, most of the people who say that aren’t themselves sacrificing much of anything. The difference between those cuts and this rate increase is that this time the bulk of the sacrifice is being felt by a different crowd. If you don’t like it, maybe keep that in mind for the next time.

To address Sen. Bettencourt’s concern, I’m fine with exempting the people who were flooded out from the rate increase. If you filed a FEMA claim, you get to be assessed at the current rate. As for the Council members quoted in the story who say they can’t go along with this, I say no trash gets collected in their neighborhoods until every last piece of Harvey debris has been carted off. There’s a little shared sacrifice for you. The Press has more.

Let’s play two?

Oh, God, please, no.

Gov. Greg Abbott on Wednesday put blame on the House — particularly Speaker Joe Straus — for the shortcomings of the special session and left the door open to calling another one.

“I’m disappointed that all 20 items that I put on the agenda did not receive the up-or-down vote that I wanted but more importantly that the constituents of these members deserved,” Abbott said in a KTRH radio interview. “They had plenty of time to consider all of these items, and the voters of the state of Texas deserved to know where their legislators stood on these issues.”

The comments came the morning after lawmakers closed out the special session without taking action on Abbott’s No. 1 issue, property tax reform. Abbott ended up seeing legislation get sent to his desk that addressed half his agenda.

As the Senate prepared to adjourn Tuesday night, some senators said they wanted Abbott to call them back for another special session on property taxes. Asked about that possibility Wednesday, the governor said “all options are always on the table.”

“There is a deep divide between the House and Senate on these important issues,” Abbott said in the interview. “So I’m going to be making decisions later on about whether we call another special session, but in the meantime, what we must do is we need to all work to get more support for these priorities and to eliminate or try to dissolve the difference between the House and the Senate on these issues so we can get at a minimum an up-or-down vote on these issues or to pass it.”

In the interview, Abbott contrasted the House with the Senate, which moved quickly to pass all but two items on his agenda. The lower chamber started the special session by “dilly-dallying,” Abbott said, and focused on issues that had “nothing to do whatsoever” with his call.

Asked if he assigned blame to Straus, a San Antonio Republican, Abbott replied, “Well, of course.”

Such big talk from such a weak leader. I suspect there won’t be that much appetite for another special session (*), with the preferred strategy being to attack Straus and get the 2018 primaries up and running. Failure to pass certain bills is often as big a victory for the zealots as success is. Everyone has their talking points for the primaries, so why waste more time in Austin when you can be out raising funds?

(*) The one thing that might make House members want to come back is a court order to redraw the House map. Everyone will be keenly interested in that, especially if some districts are declared illegal. They’ll not want to leave that up to the court, so if it comes down to it, expect there to be pressure for a special session to come up with a compliant map.

Smell ya later, Senate

How about that?

The special legislative session is over — in one chamber, at least.

The Texas House abruptly gaveled out Sine Die – the formal designation meaning the end of a session – on Tuesday evening after voting to approve the Senate’s version of a school finance bill that largely stripped provisions the chamber had fought to keep.

Gov. Greg Abbott called lawmakers back for a special session on July 18. Special sessions can last for up to 30 days, which gave both chambers til Wednesday to work.

The House’s abrupt move came after days of difficult negotiations with the Senate on school finance and property tax bills — and leaves the fate of the latter in question.

House Ways and Means Chairman Dennis Bonnen had been expected to appoint conference committee members Tuesday so that the two chambers could reconcile their versions of the bill.

But instead, shortly before the surprise motion to Sine Die, the Angleton Republican made an announcement.

“I have been working with members of the Senate for several days on SB 1, we have made our efforts, so I don’t want there to be in any way a suggestion that we have not, will not, would not work with the Senate on such an important issue,” he said.

So now the Senate can take it or lump it on SB1, which in the end was the bill Abbott was really pushing for. Dan Patrick has a press conference scheduled for today, and I expect it will be epic. I have no idea what happens next, but this is as fitting an ending for a stupid special session as one could imagine. Some things, including at least one really bad thing got done, but most of the petty attacks on local control, as well as the odious bathroom bill, got nowhere. We’ll see if Abbott takes his ball and goes home or drags everyone back out again.

House passes school finance bills

I doubt they’ll meet a different fate than they did in the regular session, but kudos anyway.

Rep. Dan Huberty

The Texas House on Friday passed a package of bills that would put $1.8 billion into public schools and help out struggling small, rural school districts.

House members voted 130-12 to approve the lower chamber’s main piece of school finance legislation, House Bill 21, just as they did during the regular session. The House also voted 131-11 to pass House Bill 30, which would fund the school finance bill by putting $1.8 billion into public schools. Once the House gives the measures final approval, they will head to the Senate.

The funds cited in the legislation would come from deferring a payment to public schools from fiscal year 2019 to 2020, and would allow an increase in the base funding per student from $5,140 to $5,350 statewide.

[…]

The House Public Education Committee’s chairman, state Rep. Dan Huberty, R-Houston, the author of HB 21, has pushed his bill as a preliminary step to fixing a beleaguered system for allocating money to public schools.

“You cannot have property tax reform unless you have school finance reform. That is just a fact,” he said Friday. “We have the time to get this done. We just have to have the will to get this done.”

HB 21 would increase the base per-student funding the state gives to school districts, in part by increasing funding for students who are dyslexic and bilingual. It would also gradually remove an existing financial penalty for school districts smaller than 300 square miles, which was originally intended to encourage them to consolidate.

[…]

The House voted 67-61 Friday against approving House Bill 22, a separate measure that would have continued ASATR for two years before letting it expire in September 2019. Some school districts have warned they might have to close without the program, which totaled about $400 million this year.

See here for the first go-round on HB21, and here for the ASATR story. I don’t expect anything to happen with any of this, but I suppose a surprise is possible. The House and the Senate are on such different pages that it seems unlikely in the extreme, though.

House committee hears largely pointless property tax bills

Something will probably come out of this, but it’s hard to understand why.

Rep. Dennis Bonnen

A Texas House committee on Tuesday spent more than seven hours plowing through more than 30 bills that aim to tackle rising property tax bills — months after similar legislation died amid an intra-GOP war over how conservatively state officials should govern.

And while the Senate spent the past five days — including the weekend— tearing through the 20 issues Gov. Greg Abbott wants addressed in the special legislative session, the House Ways and Means Committee on Tuesday tackled property taxes from several angles that collectively go far beyond the upper chamber’s major property tax bill that’s poised to pass this week.

Among the legislation debated was House Bill 4 by state Rep. Dennis Bonnen, the committee’s chair, which includes a provision that requires cities, counties and special purpose districts to get voter approval if they plan to increase property tax revenues on existing land and buildings by 5 percent or more.

During the regular session, such an election provision died in Bonnen’s committee. Its absence from property tax legislation led to an impasse between the two chambers that — along with the House’s refusal to pass legislation regulating bathrooms that transgender Texans can use — eventually resulted in Abbott calling lawmakers back to Austin this summer.

The dozens of bills that House members discussed Tuesday aim to slow property tax growth, overhaul the appraisal process, simplify tax notices and increase or provide exemptions to some elderly and disabled Texans and military members.

Bonnen, R-Angleton, repeatedly asked fellow lawmakers how legislation that was introduced had fared during the regular session, highlighting how some of the matters died either in the Senate or at the hands of Tea Party-aligned House members.

He vehemently defended HB 4 against criticism from city and county leaders but also admitted it would do nothing to lower individual Texans’ tax bills. Instead, it would only allow them to slow the growth in property tax increases that are often largely driven by rising property values.

“None of this reduces property taxes at all,” he said. “It’s sort of ridiculous that there’s any level of suggestion … that there is.”

There’s more, but that quote sums it all up pretty well. It’s a Potemkin bill designed to allow Republican legislators to tell the seething hordes of primary voters that they Did Something About Taxes, without really doing anything substantive or beneficial about taxes. It’s probable that one of these bills will pass, and if it does it’s not the end of the world, but it will be another brick in the wall of stupid policymaking whose main goal is to shift the burden and deflect the blame from Austin to the locals. That goal, at least, it has a chance of achieving.

War on local control update

Example one:

Sen. Craig Estes’ Senate Bill 18 would require cities and counties to get voter approval if they plan to spend a certain amount more than they did in a previous year. His bill ties such an election trigger to inflation and statewide population growth.

“You ask people about that and they generally think that’s a good thing,” the Wichita Falls Republican said Friday.

But local government officials and advocates for municipal government say the measure will hinder their ability to afford services that residents expect. They also say it will make it hard to keep up with population growth — especially in booming suburbs growing much faster than the state as a whole.

“We’re planning our budgets multiple years in the future because we’ve got so many capital projects that we can’t just look at budgets from year to year,” said Frisco Mayor Jeff Cheney, whose North Texas city grew almost four times as fast as Texas did from 2015 to 2016.

Estes’ bill, plus others aimed at giving voters more frequent say over their property tax rates, are on the docket for Senate committees this weekend. They fall in line with several items on Gov. Greg Abbott’s special session call that seek to limit powers cities and counties have long exercised. Other bills being considered Saturday and Sunday would change how and when municipalities regulate land use and annex land outside their borders.

State leaders say they are trying to both respond to Texans’ complaints about rising property tax bills and protect landowners’ rights from local regulations. But local elected officials say lawmakers and top state leaders are unfairly portraying cities and counties as irresponsible stewards of taxpayer money to score political points with voters ahead of next year’s primaries.

Such tensions highlight a growing divide over how much say city and county officials should have over local matters. San Antonio Mayor Ron Nirenberg said the proposed spending cap is another example of lawmakers trying to control officials who are elected to represent Texans at the local level.

“It certainly flies in the face of the very important democratic principle that we’ve adhered to for centuries in self governance,” Nirenberg said.

[…]

Estes couldn’t point to any examples of cities or counties dramatically increasing their spending in recent years. He said his office is currently collecting data from local governments on it. And he said he’s open to tweaking provisions in his bill as it moves through the Legislature.

But he shrugged off the notion that the state shouldn’t be telling local governments what to do. He said counties are extensions of state government, and that cities “reside in the state.”

“I don’t think that’s really an issue, that we don’t have any jurisdiction in what they’re doing,” he said. “We do.”

Don’t bother making the analogy to states and the country, because that’s Totally Different and Not The Same Thing At All, because it just is and that’s that. I would just point out that several of the Mayors who signed that letter opposing stuff like this are Republicans. This is not a partisan issue, it’s one of power and the belief of Abbott and Patrick, enabled by Patrick’s minions in the Senate, that they’re the only legitimate form of government. It’s crazy that we’ve come to this place, but here we are.

Example two:

A bill aimed at protecting property owners’ rights from changing local government regulations could undo years of safety and land use rules and create a building environment in Texas with the potential for bars to pop up in residential neighborhoods, critics say.

Some local officials are calling Senate Bill 12 the “hyper-grandfathering” bill that goes far beyond current state provisions by retroactively applying to each property the land use and safety codes that were in place the last time the property was sold. In the extreme, SB 12 could lead to broad land use possibilities for parcels of land that haven’t changed hands in decades, according to six local government and public policy experts tracking the bill.

[…]

The bill’s author, Sen. Dawn Buckingham, R-Lakeway, said in a statement it would protect property owners from new county or city regulations that would upend the plans that people had when they bought the land.

“Since filing Senate Bill 12, I have been working with stakeholder groups across Texas, and I look forward to passing legislation that will protect the rights of Texans to develop their property,” Buckingham said.

In Austin, the passage of SB 12 would drastically undermine the city’s ongoing efforts to rewrite its entire land use code, known as CodeNext. If the City Council signs off next spring as planned on CodeNext, none of its provisions would take effect on a piece of property until the land changed hands, Planning and Zoning Director Greg Guernsey said.

“Let’s say CodeNext gets approved,” Guernsey said “It is not worth a whole lot if I have to deal with property codes from 10, 20 or 30 years (ago).”

I’ll bet the lawyers who specialize in land use codes will make a killing, though. Bear in mind, while the state would impose this requirement, it’s the cities and counties that will get stuck with the costs of implementing and enforcing it. I don’t even know what to say.

Example three:

A Texas Senate committee approved a bill Saturday that would outlaw local restrictions on using a cellphone while driving.

Senate Bill 15 would pre-empt local ordinances on mobile phone usage, effectively rolling back provisions in more than 40 Texas cities that currently post hands-free ordinances stricter than the statewide texting ban. That measure now heads to the full Senate. It was one of several items the Senate Business and Commerce Committee took up Saturday that target local regulations and ordinances.

That committee also passed a bill that would require women to pay a separate premium for insurance coverage of an abortion that is not considered medically necessary.

Gov. Greg Abbott has argued that stricter local cellphone ordinances make for a confusing “patchwork” of regulations across the state, leaving drivers confused as they navigate between areas with different rules. Opponents of SB 15, including police officers from San Antonio and Austin who testified against the measure on Saturday, argue that the state should not pre-empt city ordinances that make people safer.

State Sen. Judith Zaffirini, D-Laredo, the Senate sponsor of the statewide texting-while-driving ban that goes into effect in September, said SB 15 would be a “huge step back.”

“I’ve never cried as a senator,” said Zaffirini, a senator since 1987. If this passes, “I think I would cry.”

The committee vote on SB 15 was 7-2.

The Buckingham bill was not voted on in committee, with some comments from the author that it could get reworked. Call me crazy, but maybe this is the sort of thing that needs a more deliberate process, if only to see if there is any legitimate purpose for it. If there’s one bit of good news in all this, it’s that the general insider belief is that most of Abbott’s agenda won’t get passed. There’s still plenty of room for damage even if only a few of his items make it through. The House offers the better chance of non-action, so let your representative know what you think.

What West Texas can do to improve their schools

Here’s an op-ed from the Statesman about one educator in West Texas who has had enough.

My hero this week is Graydon Hicks, Fort Davis superintendent of schools.

A West Texas publication published his open letter to Gov. Greg Abbott and Lt. Gov. Dan Patrick raking them over the coals for “the lack of positive legislative action for public schools in Texas” at the most recent session, which adjourned at the end of May without passing a school finance bill.

Hicks is a West Point graduate and an experienced school administrator. He is no-nonsense guy who does not mince words. After detailing the effect of shrinking state financial support for public schools on Fort Davis schools over the past 10 years — combined with an increasing number of unfunded mandates and requirements — Hicks wrote, “How much more do you want to harm our children?

“If your intent is to dissolve public education (and your actions are more than a clear signal of such), then simply go on the record with that statement and remove the state’s authority to further overburden us without financial support. Quit pontificating about bathrooms. Quit hiding your intentions behind righteous statements about school vouchers and choice.”

Hicks accompanied his letter with a chart showing the annually declining amount of state funding available to the Fort Davis school district and the increasing burden on local taxpayers since 2008. That year, state funding amounted to $3.9 million, or 68 percent of the school district’s budget. Local property taxes provided $1.8 million, or 32 percent. In 2017, the state will contribute $378,000 — about one-tenth of its 2008 commitment, or 15 percent of the total budget. Local taxes this year will provide $2.2 million, or 85 percent.

“The Fort Davis ISD has 226 students,” Hicks wrote. “It has no cafeteria, has no bus routes, has dropped our band program, has eliminated (or not filled) 15 staff positions, has cut stipends for extra-curricular activities, has frozen (or reduced) staff pay for one year, has cut extra-curricular programs, has no debt, and has increased our local tax rate to the maximum allowed by the law.

“We have nothing left to cut.”

I agree that Superintendent Hicks sounds like a fine fellow who is speaking truth to power. That said, I feel compelled to point out how Jeff Davis County (*), which is where Fort Davis ISD, voted in the last gubernatorial election:


Governor
			
Greg Abbott             623  60.54%
Wendy R. Davis          366  35.57%
Kathie Glass             31   3.01%
Brandon Parmer            9   0.87%


Lieutenant Governor
			
Dan Patrick             560  56.62%
Leticia Van de Putte    375  37.92%
Robert D. Butler         48   4.85%
Chandrakantha Courtney    6   0.61%

Hold that thought. Now here’s a similar story about the school funding woes in West Texas:

Educators were excited to hear Gov. Greg Abbott announce he would call lawmakers back to Austin for a special legislative session to consider $1,000 teacher pay raises.

But Donna Hale, superintendent at 200-student Miami ISD in rural Roberts County, is wondering where the money is going to come from. An unfunded mandate, she said, could throw a wrench into their already difficult budgeting process.

“That’s the last thing we really need – the state saying you’ve got to do this when they’re not offering any support for us,” said Hale, who already doubles as the district’s librarian and said she was considering taking over as principal to cut payroll costs.

A wind farm and a sea of oil and natural gas wells in Roberts County has been good to Miami ISD, giving the district a flush tax base to pay for teachers and buildings. But its $1 billion dollar tax roll was cut in half this last year amid tumbling oil and gas prices. A state aid provision that it has relied on in recent years to guard against economic downturns expires in September and will take more than a third of the district’s budget with it.

Many rural schools like Miami ISD, the only school district in the county, are facing a similar dilemma and pleading with the State Legislature to act. Lawmakers return to the Capitol next month for a legislative overtime period, but school finance reform has taken a back seat to bills regulating bathroom use and creating a school choice program.

Again, I sympathize, and again, I wonder how did Roberts County vote in 2014?


Governor
			
Greg Abbott             324  93.91%
Wendy R. Davis           15   4.35%
Kathie Glass              5   1.45%
Brandon Parmer            1   0.29%


Lieutenant Governor			

Dan Patrick             320  93.29%
Leticia Van de Putte     12   3.50%
Robert D. Butler         10   2.92%
Chandrakantha Courtney    1   0.29%

I think you get where I’m going with this. Now, I will stipulate that in 2014, one might have been able to believe that Greg Abbott, who was touting an expansion of pre-K, and Dan Patrick, who had served as the Senate Education Committee chair and had passed some bipartisan bills during that time, could at least have been okay on education and school finance issues. Here in June of 2017, after a session that included the Senate refusing to consider HB21 and a special session that includes vouchers on the agenda, it’s really hard to believe that now. Further, both counties are represented in the Lege by pro-education members. Roberts County is served by Sen. Kel Seliger, who was the only Senate Republican to oppose the main voucher bill, and by Rep. Ken King, who was endorsed by Texas Parent PAC in the 2012 primary. Jeff Davis County has two Democrats, Sen. Jose Rodriguez and Rep. Cesar Blanco, in the Lege. Both were unopposed in 2016, and Blanco was unopposed in 2014, but in all three cases they drew a comparable number of votes to Republicans on the ballot. In addition, former Rep. Pete Gallego carried Jeff Davis County in 2010, even as Rick Perry and the rest of the Republicans were also winning it. The voters there do vote for pro-education candidates. Will they – and other counties like them – recognize in 2018 that “pro-education” does not describe Abbott or Patrick? I for one will have a lot more sympathy for their plight if they do.

(*) Yeah, I know.

Budget passes

The Legislature’s one mandated duty has been completed.

Both chambers of the Texas Legislature voted Saturday evening to approve a $217 billion, two-year budget that would boost funding for the state’s beleaguered child welfare agency, increase the number of state troopers on the Texas-Mexico border and avoid serious reforms to the state’s much-criticized school finance system.

The final vote in the House was 135-14. The vote in the Senate was 30-1.

Scrounging for cash in a tight-fisted legislative session, budget leaders from both chambers agreed to a compromise that settled a bitter debate over how to finance the state budget. The two-year budget is shored up by both $1 billion taken from the state’s savings account, often referred to as the Rainy Day Fund, and an accounting trick that would use nearly $2 billion from a pot of funding intended for highway projects. The House had favored tapping the Rainy Day Fund and leaving the transportation funding alone. The Senate had taken the opposite position.

[…]

The compromise proposal was skimpier than the original budget draft that the House voted out in April. In the House, the final version won the approval of Tea Party Republicans who had originally opposed the House version, while losing the support of almost one-third of the chamber’s Democrats.

State Sen. Sylvia Garcia, D-Houston, was the lone no vote in the upper chamber.

“This budget is more of the same and fails Texas families,” Garcia said in a statement. “There’s no new money for pre-k, there’s continued spending on more border militarization, and it continues to shortchange education and healthcare.”

The budget includes funding to cover growing enrollment at public schools, but it reduces state funding for schools by about $1.1 billion. That funding is offset primarily by growth in local property taxes.

See here for some background, and read the rest for the details if you want. The thing I want to focus on is in that last paragraph, and for that let me quote from a post Deece Eckstein wrote on Facebook:

The state budget adopted today relies on school property taxes increasing by 7% annually to balance the State budget. In other words, the Legislature is reducing its aid to schools because it assumes your taxes will increase by at least 7% a year.

So, when you’re frustrated by rising property taxes and someone tells you to blame your local school board, just read them the language below. School property taxes now exceed 55% of the average person’s property tax bill. We will not get property tax relief until the Legislature fixes school finance!

Kudos to Kirk Watson and Donna Howard, who have been calling out their colleagues on this hypocrisy. Jeers to Dan Patrick and Paul Bettencourt, who insist on manufacturing villains at the local level to blame for rising property taxes.

It’s an effective con, you have to admit. But if you’ve paying attention, now you know the real story. Don’t be a sucker.

So the big remaining question is whether this will herald the end of the legislative season, as it normally does, or whether Dan Patrick will succeed in strong-arming Greg Abbott into calling a special session to try and force through a bathroom bill. Patrick’s gonna do what Patrick’s gonna do, so do what you can do and call Abbott’s office at 512 463 2000 and tell him no special session. There’s no reason to go down without a fight. RG Ratcliffe has more.

MALDEF gets injunction in recapture lawsuit

From their website:

Please attribute the following statement on a Texas court ruling ordering state education officials to cease bypassing existing school funding rules to Marisa Bono, Southwest regional counsel of MALDEF (Mexican American Legal Defense and Educational Fund):

“MALDEF is pleased that the District Court saw through efforts by the Texas Education Agency to circumvent school funding rules. The court was abundantly clear in its finding that efforts to relieve wealthier school districts of their responsibilities to poorer districts under ‘recapture’ amounted to ‘an inadequate, improper, and invalid attempt at a rule amendment.’ As MALDEF argued, and the court found, state education officials failed to comply with the mandatory requirement that any changes in funding rules must include a fiscal impact statement – TEA’s own witness confirmed that this rule change will cost public schools $88 million a year. We call on the Texas legislature to take immediate and binding steps to bar the TEA from doing this again.”

Read the injunction order here.

Read the jurisdiction order here.

See here for the background. I started writing this before there was any reporting on it, just a bit of chatter on Facebook that led me to Google and the MALDEF statement. Now here is the Chron story.

Just weeks after voters approved a $77.5 million payment to the state in so-called “recapture” fees, the Houston school district could be stuck with another $60 million in fees after a judge’s ruling that the state improperly slashed wealthy districts’ bills.

The ruling, by state District Judge Darlene Byrne in Travis County, temporarily halts an agreement by the Texas Education Agency that allowed the Houston Independent School District and other property-rich districts to reduce the amount of “equalization” payments required to fund public education.

The ruling throws HISD’s recapture bill back into question and could affect more than a dozen other property wealthy districts across the state, though no official list has been released.

“We understand the financial situation even wealthy school districts are in, which is why we’re pushing for school finance reform in the Legislature,” said Marisa Bono, southwest regional council for the Mexican American Legal Defense and Educational Fund, a civil rights organization that filed the suit.

“But the solution is not to give wealthy districts a tax break on the backs of property poor districts.”

[…]

The deal was cut in February, when TEA said it would give districts such as HISD credit for half of their local homestead exemptions, along with adjustments for student enrollment and property values, to cut the districts’ recapture bills.

The changes were outlined in a Feb. 1 memo penned by TEA Chief School Finance Officer Leo Lopez that were later incorporated into TEA’s recapture manual.

TEA officials at the time concluded the would result in “no fiscal implications to state or local government, including local school districts.”

But attorneys for the property-poor districts argued the state would lose $88 million in funding, causing significant financial loss to local governments.

In a ruling released late Friday, Byrne concluded that the reprieve granted by TEA was “inadequate, improper and invalid,” and that the TEA manual did not contain an accurate financial note describing the fiscal impact of the changes.

She granted a temporary injunction to halt the recapture calculations until the case can go to trial Aug. 11.

Unless the state works out another way to grant HISD and the other districts a reprieve, the district could be forced to pay $137 million. The adjustments for enrollment and property values were allowed to stand, said Bono, the MALDEF lawyer.

So there you have it. It’s very frustrating, especially with the Senate undermining efforts to address the problem. I don’t know what happens next, but I hope HISD and the TEA can work something out that will be accepted by the judge and the plaintiffs.

Budget deal reached

The one bill that must get passed is on its way.

After months of private squabbling and public threats of a legislative overtime session, the Texas House and Senate finally compromised to unveil a joint budget late Saturday.

Lawmakers, scrounging for cash in a tight-fisted legislative session, agreed to dip into the state’s savings account and to make use of an accounting trick using funds set aside last session for highway projects.

“We have reached a consensus on what I believe is a responsible, compassionate and smart budget for the people of Texas,” said state Sen. Jane Nelson, R-Flower Mound and the upper chamber’s top budget writer, at a committee hearing that lasted late into Saturday night.

“This has been a laborious process, I have to say,” said state Rep. John Zerwas, a Republican from Richmond and Nelson’s counterpart on the House Appropriations Committee. He called the budget “fiscally conservative” during “a time when it’s a little bit more lean.”

Budget documents indicated around $1 billion would come from the state’s Rainy Day Fund, a $10 billion savings account available to shore up the budget in difficult years. That money would pay for priorities such as repairs to the state’s aging mental health hospitals and bulletproof vests for police officers.

Nearly $2 billion more would come from an accounting trick related to transportation funding approved in 2015. The proposed budget would delay a payment to the state highway fund in order to free up that funding for other needs in the current two-year budget. The House had previously been critical of the possibility.

Though lawmakers were creative in tapping alternative money sources to avoid steep cuts this budget cycle, some high-dollar expenditures, notably Medicaid, the federal-state health insurance program for the poor and disabled, were not fully funded. That means lawmakers will almost certainly need to address those underfunded parts of the budget in 2019 — their next legislative session — in the form of a supplemental budget.

The House had originally intended to use $1.4 billion from the Rainy Day Fund, then considered upping it to $2.4 billion, while the Senate aimed for $2.5 billion in pay-delay gimmickry. Nice to see everyone can give a little to get a little, I guess. No budget is ever going to be good under our current political circumstances, but this one could have been worse, and that’s about all you can hope for.

In other business from Saturday:

On property taxes, the lower chamber unanimously approved an amendment that contained key language from Senate Bill 2 — which, among other things, requires local governments to give constituents more information about proposed property tax increases — and attached it to Senate Bill 669.

The House sponsor of the bill, state Rep. Dennis Bonnen, R-Angleton, had been trying to move the legislation for weeks, and it wasn’t scheduled to come to the House floor until early next week.

The Senate bill is an item Lt. Gov. Dan Patrick has deemed must-pass legislation — he threatened on Wednesday to ask Gov. Greg Abbott to call lawmakers back for a special session if that and other measures didn’t pass. Whether Bonnen’s amendment is enough for Patrick and the more conservative Senate is still unclear: Bonnen’s amendment lacked a key provision that would require voter approval for some tax rate increases, something Patrick stated repeatedly he wanted included.

[…]

An amendment by state Rep. Four Price, R-Amarillo, would extend the lives of several state agencies that were scheduled to “sunset” – or expire. A separate measure that dealt with that specific issue didn’t survive last week’s deadline for the House to pass bills on second reading.

But Price added his language to Senate Bill 80, a measure that seeks to streamline reporting requirements for state agencies. The Senate must now concur with the changes to SB 80 in order for Price’s amendment to survive.

“The goal of the amendment originally as contemplated would not have had to extend these agencies, but for the fact they were caught up in that last night on the calendar,” he said. “It goes hand in hand [so] yes, it had the effect of extending the agencies to 2021.”

SB2 was one item on Dan Patrick’s hostage list, while the sunset bill was his leverage for it. Late last night there was a limited bathroom amendment attached to a Senate bill (I’ll have more on this tomorrow), and SB2 isn’t as Patrick wanted it, so we can’t say as yet whether his tantrum has been mollified. I’m sure he will let us know soon enough.

Bill King wants you to lower his property taxes

That’s not what he says in this op-ed, but it is the effect of what he’s arguing for, even if he’s not honest enough to come out and say it.

Let’s start with the basic point that despite King’s disingenuous attempt to rebrand it, what the city has is indeed a revenue cap and not a property tax cap. The mechanism that causes the cap to kick in is a combination of inflation and population growth, and if the city’s total revenue from one year to the next exceeds that combination, the cap gets enforced, which has so far always meant a reduction in the property tax rate. My point is that it doesn’t have to be an increase in property tax collections that triggers the cap. If sales tax collections were sufficiently robust, it could tip the revenue increase past the limit. If population growth plus inflation, which together have at best a small influence on the city’s expenses, are sufficiently small then even a modest increase in revenue could cause the cap to come into play. The factors that define the cap have basically nothing to do with the things that drive the city’s finances.

What the revenue cap does above all is prioritize property tax cuts over anything else the city might choose to do. If in a flush year the city wanted to pay down some bond debt or make an extra payment into the pension funds, well, too bad. The cap says the city has to cut the property tax rate, which doesn’t just affect the flush year in question. The reduced rate remains in place, thus hampering the city further in bad times like we just experienced. It also takes the option of increasing the tax rate off the table, which is one reason why Mayor Parker raised fees so much. These are the policy decisions that get made when policy options are artificially limited by bad laws. The effect of the cap is especially pernicious when the city is recovering from down years, as it is now, because even the process of revenues getting back to previous levels after falling due to a bad economy can trigger it. Every candidate for office in Houston I have ever interviewed has talked about spurring economic growth to improve the city’s bottom line. The revenue cap puts a limit on how much that growth can be leveraged. Why would anyone think that’s good policy?

And let’s be clear about who the main beneficiaries are when these forced property tax cuts are enacted: Wealthy property owners like Bill King. Renters get nothing, while owners of lower-priced houses get nominal reductions. It’s only once you get up int seven figures and more that the cuts start to add up. To be sure, it’s still not that much, mere pocket change to the beneficiaries, but the point is that the lion’s share of those benefits go to those who have the most to begin with.

Which brings me back to my main point. If Bill King thinks this dumb law is really good public policy, even if ratings services that he likes to cite when he argues about how to fix the city’s finances think it’s a dumb law, then fine, he’s allowed to argue for it. But just as people have been asking how much Donald Trump would benefit from the tax “reform” plans that are being floated by his administration and its Congressional enablers, we should ask how much he himself has benefited in recent years from the coerced property tax rate cuts that he wants us to go along with. The least he can do is tell us how much this policy that he advocates will add to his own bottom line.

UPDATE: King insists in the comments and via email that “other revenue sources” like sales taxes don’t trigger the charter amendment. Fine, whatever. This does not change my point that the revenue cap is a stupid idea, nor that people who have benefited from it, like Bill King, should be honest about that when they advocate for its continued existence.

Patrick takes some hostages

This is what passes for leadership in our state.

With deadlines looming, Lt. Gov. Dan Patrick on Wednesday threatened to push for a special session of the Legislature to pass a bill to regulate bathroom use for transgender Texans and legislation to set new thresholds for when cities and counties must get voter approval for their tax rates.

Patrick deemed Senate Bill 2, a property tax bill from state Sen. Paul Bettencourt, and either Senate Bill 6, the “bathroom bill” from state Sen. Lois Kolkhorst, or similar language amended to another bill, as must-pass measures to avoid a special session. Both bills have passed the Senate and are currently in the House.

The last day of the legislative session is May 29.

“If we must go to a special session, I will respectfully ask the governor to add both of these bills — plus other legislation he has voiced support for — in that special session call,” Patrick said during a press conference at the Capitol. “If the bills don’t pass in the special and they’re blocked again, I will ask the governor to call us back again and again and again.”

Only the governor can call a special session, but Patrick’s key source of leverage is a measure known as the “sunset safety net bill,” which lawmakers have to pass each session to keep a long list of state agencies from shutting down. All state agencies must undergo periodic “sunset” reviews by the Legislature or be forced to shut down if reforms aren’t passed.

The conservative House Freedom Caucus managed to delay consideration of bills in the House long enough to keep it from passing its version of the “safety net” bill last week, leaving the Senate version as a critical measure.

Patrick on Wednesday said the Senate had less than 48 hours to pass its version of the legislation and avoid the need for a special session.

But he added that he “must see action in the House to pass several key” pieces of legislation before moving on the Senate’s sunset legislation.

Patrick’s threat came a day after a letter from House Speaker Joe Straus to the lieutenant governor was leaked to press. Straus wrote that the Legislature could avoid a special session if it finished its work on the budget and passed the sunset safety net bill.

There’s more, so go read the rest. There’s always a certain amount of brinksmanship at the end of a legislative session as deadlines loom, but I’d take Patrick at his word. The talk we’re used to hearing at this point in a session has been by people who want to get things done and go home. Patrick has leverage and he has no qualms about using it.

All this looks bad, and it almost certainly is bad. There’s still a number of ways this can play out, but one thing is certain: The only language Dan Patrick will understand is losing elections. The business lobby has invested a ton of resources into preventing a bathroom bill from passing. Patrick has made it perfectly clear that he could not care less about what the business lobby wants. So I ask again, if Patrick gets his way as he often does, will the business lobby roll over and accept getting their asses handed to them, or will they fight back next year? Will they loudly and forcefully back opponents to Patrick and his minions in the Legislature (both chambers), or will they reveal themselves to be the political equivalent of an arthritic Chihuaha? We’ll find out, one way or another. The Chron and the Observer have more.

More on the HISD recapture re-referendum

Here’s the full Chron story about Saturday’s re-vote on recapture.

About 84 percent of constituents voted “for” HISD’s Proposition 1, giving the school district the green light to send $77.5 million to the Texas Education Agency rather than let the state forcibly remove some of most valuable commercial properties from the district’s tax rolls.

The reversal from the “come-and-take-it” mentality followed trustees’ meetings with state officials and lawmakers earlier this year. Board members feared vindictive action from Austin and also had second thoughts about going with the more costly “detachment” option.

Christopher Busby, an HISD teacher at the Sam Houston Math, Science, and Technology Center who voted for Proposition 1 on Saturday, said paying recapture was the lesser of two evils.

“Recapture is not on the ballot; recapture has already happened. This is about how we handle recapture,” Busby said. “The solution that does the least damage to the district is a ‘for’ vote.”

Mark Jones, a political science fellow at Rice University’s Baker Institute, said HISD gained nothing through the two referenda, which cost the district an estimated $1.7 million.

“In the end, what HISD has done is use a lot of its political capital and has gained absolutely nothing,” Jones said. “They used political capital in (the) fall to persuade people to vote no, and they used political capital this spring to get those same people to vote yes. But they could have just said yes and paid the state like everyone else.”

[…]

Most trustees agree that referendum produced some desirable outcomes – the Senate authorized a work-study committee to look into overhauling the state’s school finance system in January, and Rep. Dan Huberty, R-Houston, proposed a bill that would increase state education spending and lessen the amount districts would pay under recapture.

After the November vote, board President Wanda Adams and trustees Skillern-Jones, Anna Eastman and Mike Lunceford grew worried that refusing to pay the state recapture fee willingly would have dire consequences for the district and the board.

Trustees Jolanda Jones and Manuel Rodriguez Jr. insisted that the district hold fast in its decision to withhold the recapture money. Otherwise, they argued, HISD risked losing ground in getting the state to rethink recapture and its school funding formulas.

“The whole point was to get the Legislature to move on this. The only reason they’re paying attention was not because we have a great lobbying team, it’s because we voted no,” Jones said in February. “The second we relent and bend over, it’ll ruin this for rest of state and our momentum because everyone is looking at Houston.”

Jones with Rice’s Baker Institute said the state’s actions were more likely the result of a May 2016 Texas Supreme Court ruling that found while the state’s school finance formula was constitutional, it desperately needed to be overhauled.

Please note that the November election was required by state law once HISD was put into recapture. Only the May election was optional. As you know, I agree with the trustee’s interpretation of what the November “No” vote meant, and I disagree with Mark Jones. I’ll cite David Thompson as my evidence for that. What happens from here is unclear, but I believe that there is now a greater appreciation of how messed up our school finance system is – I mean, raise your hand if you knew six months ago that recapture funds helped offset state spending on education instead of going to other school districts – and I believe there is a greater consensus about what needs to be done to fix it. Not at the top, of course – we’re never going to get a real fix with the Governor and Lt. Governor we now have – but among legislators themselves. There’s still a lot of work to do – HISD in particular can and should keep pushing the TEA to give it and other recaptured school districts credit for transportation costs and pre-k programs – but progress has been made. I’m happy with the way things played out.

One last look at the recapture re-vote

There’s a lot at stake here, and not a whole lot of people voting on it.

For the second time in seven months, voters within the Houston Independent School District will determine how – and if – it should pay tens of millions to help subsidize districts that collect little in property taxes.

The vote Saturday comes as some HISD trustees have reassessed a decision by voters in November not to write a $77.5 million check to the state to comply with Texas’ “recapture” policy.

While district leaders don’t think it’s fair that an urban district with many poor students and English-language learners should be slapped with such a financial penalty, they’re split over the best way to respond.

Some trustees argue that Proposition 1 will deal a blow to progress in getting state legislators to rethink Texas’ widely criticized school finance system. They believe refusing to pay will allow the district to sue the state to free HISD of its recapture obligations.

Others believe that voters should hold their nose and vote for the measure, especially with Texas Education Commissioner Mike Morath threatening that a “no” vote would prompt him to move some of Houston’s most valuable commercial properties out of the district’s taxable area.

That “detachment” scenario has never happened in Texas and could cost HISD $98.4 million in lost tax revenue this year, district officials estimate.

“Either scenario is bad,” acknowledged Glenn Reed, HISD’s general manager of budget and financial planning, adding that the district could end up losing more than 15 percent of its annual budget in a few years under either option. “You get used to living at a certain level, but now you can’t deal with cost increases. You have to start selling off furniture and only eat out once a week. It causes you to change how you do business.”

[…]

While Houston will owe $77.5 million in recapture fees this year, that number will soon balloon to $376 million owed just for the 2019-2020 school year, according to Houston ISD budget estimates. That same school year, Houston could lose as much as $413.2 million under the “detachment” scenario if property values rise (it would lose less than that amount if property values remain stagnant or decline).

Trustees including board President Wanda Adams, Rhonda Skillern-Jones and Mike Lunceford said they now fear vindictive action from the Texas Education Agency and lawmakers if the district doesn’t pay the recapture fees. But other trustees, including Jolanda Jones and Manuel Rodriguez Jr., want the district to hold steadfast in its decision not to pay the recapture fees. Jones said the district could take the state to court and argue that detachment is unconstitutional.

She contends that Houston ISD – the state’s largest school district – has the power to pressure the state to change its funding formulas.

“We can’t debate detachment until there’s an actual detachment,” Jones said. “No district has voted to detach, so that hasn’t been heard at all (in the courts).”

It should be noted that TEA Commissioner Morath isn’t “threatening” to detach properties. The TEA has already identified the properties it will detach. It’s just that the process doesn’t formally take place for another month or two, which is why HISD had the opportunity for the re-vote, which could prevent detachment from going through. Either we buy the attendance credits – i.e., vote Yes on the recapture proposition – or we experience detachment. Those are the choices.

Well, except that Trustee Jolanda Jones argues that detachment is unconstitutional. Which I suppose it could be – I Am Not A Lawyer, remember – but as Jones notes since no district has ever undergone detachment, the issues has not been litigated. I take that to mean that if the No vote wins again, someone will sue the TEA to stop detachment from happening. That does not strike me as the soundest of strategies, but I can’t say that it wouldn’t work. I can say that I personally would not choose to risk it, which is why I voted Yes.

Anyway. To get back to the matter of how many people are voting in this election, the final EV turnout document indicates about 8,500 in person early votes cast in HISD (basically, take the overall total and subtract the bottom five lines, to remove Pasadena, Humble, and Lone Star College from the amount), plus maybe 3,000 mail ballots. That suggests a final overall turnout in the 18-20K range. There’s no way to do a direct comparison to other HISD elections because the Trustees are on staggered four year terms, meaning that in a given election only some of the Trustees are on the ballot. HISD elections are also concurrent with city of Houston elections (though that will be different this year barring an order throwing out the term limits referendum), so turnout numbers in HISD districts are at least somewhat affected by that as well. To give a small amount of context, in 2013 there were 41,392 total ballots cast in three contested Trustee races (the County Clerk doesn’t provide the returns on uncontested Trustee races; state law allows for uncontested races to be skipped, which may be what happens in these cases), while in 2015 there were 76,184 voters in four contested races. Turnout rates ranged from 17 to 22 percent in the three districts in 2013, and from 21 to 28 percent in the four districts in 2015. Make of all that what you will.