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recapture

HISD will not change its funding mechanism

Not this year, at least.

Houston ISD officials have abandoned plans to overhaul the way the district funds its schools, opting to keep HISD’s long-standing financing system as they work to fill a $115 million budget deficit.

Schools will continue to receive an allotment of money based on their enrollments next school year, but the amount campuses receive will shrink by nearly $200 per student.

The announcement walked back proposals made by former Superintendent Richard Carranza in January to centralize some staffing and budgeting decisions now made by principals.

Interim Superintendent Grenita Lathan said the district needs to do more outreach and study its funding mechanisms before changing the way schools are allotted money. The district will create a committee in the coming months to study resource allocation.

“We wanted to pause and take a step back and give some proposals to the board about how do we engage the community about the funding allocation,” Lathan said. “What does it look like for HISD and our community?”

See here and here for some background. I was in full-on primary mode when the original plan was announced and I never quite had the brain space to pay close attention to it, and now it looks like I won’t have to. The plan now is the old-fashioned easier-to-understand one of cutting back a little bit here, there, and everywhere. It may be simpler, but I hope HISD will do outreach to make sure everyone has a chance to know what to expect. The Press has more.

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.

Another contemplation of turnout

Let’s see where this one takes us. Last time, I made some guesses about turnout in the HISD races based on overall turnout in the city of Houston. Now I’m going to turn that around and take a shot at pegging city turnout based on HISD.

It was suggested to me that we do have a model for a low-turnout HISD election scenario, and that was the May special election to revisit the recapture question. A total of 28,978 people showed up for that exercise. How can we extrapolate from that to the full city? Most years there isn’t a direct connection, since most years there isn’t an election for all of HISD. But such a connection does exist in two recent years, years in which HISD had a bond issue on the ballot. Let’s take a look at 2007 and 2012, the latter of which works because there were also city bond issues up for a vote. Here are the numbers:

2007: Houston = 123,410 HISD = 85,288 Share = 69.1%

2012: Houston = 576,549 HISD = 388,982 Share = 67.5%

“Share” is just the ratio of HISD turnout to Houston turnout. It’s quite pleasingly compact. If we take the midpoint of the two – 68.3% – and apply it to the May 2017 special, and we get a projected total for the city of 42,428. Which, also pleasingly, is well in line with the numbers I was noodling with last time.

What does that tell us? In some sense, not that much, as we don’t have a district-wide election in November, we have six district races. But it does give another figure for our estimate of hardcore voters, and a tad more faith in my own guess of around 50K total for the city. We can get from there to numbers for the individual races if we want. It’s still all hocus-pocus, but at least it’s based on something.

On a tangential note, we do remember that there’s also another Heights alcohol vote on the ballot, right? I’ve heard basically nothing about this since the petitions were validated. The signs like the one embedded above started showing up within the past week or so, but that’s the only activity I’ve seen or heard about, and this light Press story is the only news I’ve found. The area that will be voting has some overlap with HISD I, so it’s not touching many voters who wouldn’t already have a reason to be engaged, and as such probably wouldn’t be much of a factor even if it were a hotter ticket. Anyway, I just wanted to work something about this item in, and this seemed like as good a place as any.

More on recapture and the Rainy Day Fund

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

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

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

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

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

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

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

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

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

[…]

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

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

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

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

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

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

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.

What will this school year be like?

School has finally started for most of HISD and many surrounding districts, but with the devastation and disruption of Harvey, what can we expect from this academic year?

Many students in Houston ISD lost everything – their homes, their school supplies, their clothes, their toys.

Some are staying in the mega-shelters at the George R. Brown Convention Center and NRG Park. Others were flown by military helicopter to Dallas and San Antonio, where they have already started school. Still more are shaken after being plucked from their flooded homes by boats and Humvees.

With more than 600,000 Houston-area students set to return to the classroom Monday, teachers and school officials wonder how many will show up – and if they’ll be ready to learn.

And at some schools, business as usual will be a distant memory.

“It’s hard to focus on the lesson of the day when you’re worried about, ‘How is my home? How is my family?” said Ezemenari Obasi, associate dean for research in the University of Houston’s College of Education. “Those questions and worries become more salient than the lesson plan at school.”

[…]

While school can help provide some sense of normalcy, Obasi said paying attention to lessons and regurgitating a year’s worth of knowledge during hours-long standardized tests could prove much more difficult for flood-affected students.

He said the brain’s ability to focus can be severely hampered after experiencing significant anxiety, especially for children and teens’ whose brains are still developing.

“It’s really difficult to assess a person’s capacity when they’re not 100 percent available to focus and attempt the task,” Obasi said. “Many things we measure in schools involve students having to focus. They have to have good spatial processing or cognitive abilities, and if you can’t focus, it’s going to be extremely difficult to do anything, let alone ace an important standardized test.”

Obasi said stress can cause a host of physical and mental ailments, from sleeplessness and an inability to concentrate in the short-term to addiction and diabetes in the long-term.

Exhaustion is a real concern, Obasi said, as many have issues falling asleep and staying asleep during times of significant stress. On top of that, anxiety can hamper the brain’s ability each morning to release cortisol, a hormone that helps people get out of bed and going, making such tasks exponentially more tiresome for students.

Then there are the constant distractions – random triggers that will remind students of the worst days of their lives, questions about where their family will live, uncertainty about where their next meal will come from.

There are so many challenges facing HISD this year, from schools that aren’t ready to open and in some cases may never be to teachers who are still dealing with their own damaged houses and cars to students who have been displaced to points unknown. Indeed, quite a few of these students are now homeless, for who knows how long.

The Texas Homeless Education Office estimates that about 35,000 to 40,000 students have been affected by Hurricane Harvey. On top of that, more than 200 school districts and charter schools statewide canceled or delayed classes, some indefinitely.

Jeanne Stamp, the office’s director, said some families have relocated to Dallas and San Antonio but Houston is sure to see their already large number of homeless children balloon.

Federal protections require schools to immediately enroll children who have lost their regular homes, including those affected by a natural disaster.

That federal law allows homeless children to either stay in the school they were attending or enroll in the school in the neighborhood where they are currently staying, with transportation costs divided equally between the two districts if there’s a funding dispute.

The Texas “Third Choice” law goes even further, allowing homeless students the choice to enroll in any school district in the state, regardless of their school of origin or the location of the place where they are staying.

But the state law doesn’t require transportation to be provided, something Michael Santos, an attorney with the National Law Center on Homelessness and Poverty, urged schools to offer in order to comply with the over-arching federal law.

“That falls under the obligation to remove barriers for the student attending school,” Santos said. “Transportation is controversial and it’s expensive.”

For Houston, the transportation issue could be even more heightened as many displaced families are likely to have to commute across the sprawling metro area, between where they want to go to school and where they’re stuck sleeping at night.

“Sometimes public bus passes help get kids to school. Sometimes parents have a vehicle but don’t have funds for gas,” Stamp said. “It is a very costly piece of the service but it’s a necessarily piece of the service.”

Hey, you know what one of the ancillary effects of HISD going into recapture was? They lost state funding for transportation. Hell of a time for that to happen, with all these students needing to travel farther to go to school, right? Layered on top of all that is the takeover threat from the TEA if certain campuses don’t show sufficient improvement on the STAAR test. I don’t know how the state can enforce that threat in good conscience this year given the extreme exogenous circumstances HISD must deal with, but as yet there’s been no discussion, let alone decisions, to that effect.

The point is that this was going to be a tough year for HISD no matter what, but before Harvey hit you could see a path to holding off the TEA from doing anything undesirable. It’s a lot harder to see such a path now. And as bad as HISD has it, some others have it worse. This is why some folks are petitioning for a halt to STAAR testing for the ISDs affected by Harvey. I don’t think that will get anywhere, and to be honest I’m not sure that it should. But I do know that the TEA and the Lege need to take a far more measured approach to accountability this year. No one – no student, no school, no district – should be penalized for having to go through all this.

No changes to HISD magnet programs

Not this year, anyway.

Houston ISD Superintendent Richard Carranza this week withdrew a plan to deeply cut funding for the district’s magnet programs over the next three years, shelving a proposal that had angered parents and some school board members who consider the specialized academic programs to be jewels in an oft-troubled school system.

The proposed cuts, outlined in a presentation to the HISD board last week, would have eliminated all extra funding per student to many of the district’s 121 magnet programs by the 2019-2020 school year while cutting funding to many of the other programs by hundreds of dollars per student. Only funding for secondary-language and early-college programs were spared.

But after the plan triggered a backlash from magnet school supporters, Carranza and district officials pulled back the proposal and said they instead planned to conduct a review of the district’s magnet funding and programs.

HISD spokeswoman Lila Hollin said in a written statement on Wednesday that the district had no plans to cut funding or make changes to magnet schools for the coming 2017-2018 school year.

“HISD magnet programs are reviewed annually. Discussions about the equitable funding of schools – both magnet and neighborhood campuses – are part of that review process,” Hollin wrote.

She added that a comprehensive review of the magnet program would likely be completed by January.

[…]

Magnet schools and programs have been a touchy subject in Houston ISD as their prevalence and prominence has grown. While some are more diverse both in terms of race and economic status than many other district schools, critics have argued that they accept a much larger percentage of white and Asian students than those groups account for district-wide.

Only 8 percent of HISD’s students are white, according to TEA data, yet they make up about 36 percent of students at Carnegie Vanguard High. At DeBakey High, about 50 percent of the students are Asian, even though only about 4.7 percent of students district-wide belong to that ethnic group.

But the district’s demographics don’t match those of the city overall, largely because more-affluent white families have generally opted to send their children to private schools or to other districts. About 15 percent of those 18 and under in the city of Houston are white, according to Census data.

Houston ISD Trustee Anna Eastman said she’s glad the proposed cuts to magnet schools and programs appear to be off the table for next year, but she worries that any future cuts along the lines of the recent proposal would be “incredibly drastic.” She said cutting extra funding to the magnet programs is not the way to bring more diversity to those campuses.

“I think our goal should always be to create schools that draw the diversity of Houston into them and spread it across and throughout the district,” Eastman said. “I don’t think the problems in our other schools is the fault of kids in our magnet programs.”

I haven’t been paying close attention to this, but nothing that happened here surprises me. As the story notes, there have been reviews of the magnet program going on for some time, and they usually don’t get very far because the stakeholders really don’t like the proposals. The last section I quoted above captures the conflict succinctly – this program and its schools are very successful and desirable, but there’s limited space and the schools’ demographics don’t come close to mirroring the district as a whole, and they draw students away from their neighborhood schools, which can suffer as a result. It would be best to have more magnet-style programs in more schools all around the district, but that’s a hard thing to do when resources are scarce. I don’t see anything about this dynamic changing much in the near future.

School finance bill is dead

It started with this.

State Rep. Dan Huberty said Wednesday that he would not accept the Senate’s changes to his school finance bill, launching a last-ditch effort to hammer out a compromise with less than a week left in the session.

After a passionate speech railing on the Senate for gutting his bill, Huberty, a Houston Republican who is chairman of the House Public Education Committee, announced he has decided to request a conference committee with the Senate on House Bill 21.

The bill was originally intended to inject $1.5 billion into the state’s funding for the majority of public schools and to simplify some of the complex, outdated formulas for allocating money to school districts across the state. The Senate took that bill, reduced the funding to $530 million, and added what many public education advocates have called a “poison pill”: a “private school choice” program that would subsidize private school tuition and homeschooling for kids with disabilities.

“Members, some of your schools will be forced to close in the next year based on the committee substitute of House Bill 21,” as passed by the Senate, Huberty said, before moving to go to conference. “I refuse to give up. I’ll continue trying. Let’s at least attempt to rescue this bill.”

The House voted 134-15 to request a conference committee with the Senate on the bill.

See here and here for the background. The House’s request for a conference committee was denied by the Senate.

An effort to overhaul the state’s beleaguered school finance system has been declared dead after the Texas Senate Education Committee’s chairman said Wednesday that he would not appoint conferees to negotiate with the House.

“That deal is dead,” Larry Taylor, R-Friendswood, said.

Taylor’s remarks come after his counterpart in the House, Dan Huberty, R-Houston, gave a passionate speech in which he said he would not accept the Senate’s changes to House Bill 21 and would seek a conference committee with the Senate.

HB 21 was originally intended to inject $1.5 billion into the state’s funding for the majority of public schools and to simplify some of the complex, outdated formulas for allocating money to school districts across the state. The Senate took that bill, reduced the funding to $530 million, and added what many public education advocates have called a “poison pill”: a “private school choice” program that would subsidize private school tuition and homeschooling for kids with disabilities.

Lt. Gov. Dan Patrick pronounced the bill dead in a statement Wednesday afternoon.

“Although Texas House leaders have been obstinate and closed-minded on this issue throughout this session, I was hopeful when we put this package together last week that we had found an opening that would break the logjam. I simply did not believe they would vote against both disabled children and a substantial funding increase for public schools,” he said in the statement. “I was wrong. House Bill 21 is now dead.”

House Speaker Joe Straus said in a statement Wednesday that the Senate has not prioritized school finance reform this session.

“We appointed members of a conference committee today because the House was willing to continue to work on public school finance immediately. Unfortunately, the Senate walked away and left the problems facing our schools to keep getting worse,” he said.

HB 21 was the first time in years that the Legislature has taken up major school finance reform without a court mandate.

HB21 was also the vehicle for addressing the recapture issue that is costing HISD (among other districts) millions and which is being litigated on the grounds that the TEA didn’t make its changes to the formula properly. You can kiss that good-bye as well. It’s somehow fitting that the Lege could not come to an agreement on school finance, as this proves the lie of the Supreme Court ruling that insisted they could do this on their own without the Supremes forcing them to. Not as long as we have Dan Patrick presiding over this Senate they won’t. The Chron 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.

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.

May 6 election results

First and foremost, the HISD recapture re-referendum passed by a wide margin. The Yes vote was at 85% in early and absentee voting, and it will finish with about 84%; I started writing this at 10 PM, when 437 of 468 HISD precincts had reported. Turnout was over 27,000, with over 14,000 votes on Saturday, for about four percent turnout. Still not a lot of voters in an absolute sense, but more than I thought based on the EV tally.

In Pasadena, Council Member Jeff Wagner led the Mayor’s race with about 36% of the vote. He will face Lone Star College Trustee JR Moon, who had 18%, in the runoff. Wagner was the closest candidate to outgoing Mayor Johnny Isbell, and he also had the most money in the race, so the status quo didn’t do too badly. Pat Van Houte, Gloria Gallegos, and David Flores, who basically represented the anti-Isbell faction, combined for about 33%, but it was evenly split among the three of them. We’ve seen that before in Houston elections.

Of the TDP-endorsed Pasadena City Council candidates, three were unopposed, one (Felipe Villarreal) will be in a runoff, two (Oscar del Toro and Larry Peacock) lost by wide margins, and one (Steve Halvorson) lost by nine votes out of 805. There could be a recount in that race. Halvorson trailed by 41 in absentee ballots, led early in-person voting by 11, and led Election Day by 21, but it wasn’t quite enough. If Villarreal wins his runoff, the partisan balance on Council will be what it was before. Turnout was around 7,500 votes, in line with the 2009 election with the Election Day total being less than early in person voting.

In Humble ISD, candidates Chris Herron and Abby Whitmire both lost, getting 37 and 38 percent, respectively. I don’t know how that might compare to previous efforts, since there’s basically no history of Democratic-aligned candidates like those two running. I’ll have to get the precinct data and see if I can tease out Presidential numbers for the district.

As for Pearland, well, as of 10:30 PM there was still nothing more than early vote totals for Pearland City and Pearland ISD. Who knew I’d feel a pang of longing for Stan Stanart? High school student and future rock star Mike Floyd was leading his race for Pearland ISD 1,755 to 1,681, and in the end he cruised to a victory with 54%. I don’t know why the results aren’t refreshing for me from the Brazoria County Clerk website, but there you have it.

In the Pearland Mayor’s race, incumbent Tom Reid was leading with over 52% in early voting, but challenger and TDP-endorsed Quentin Wiltz had a strong showing on Saturday and forced a runoff.

While longtime Pearland Mayor Tom Reid had more than 50 percent of the vote during early elections, support for Quentin Wiltz poured in on election day, and both Reid and Wiltz will face a run-off election on June 10. Reid secured 48.85 percent of the vote and Wiltz earned 45.64 percent of the vote, according to the unofficial results posted by the Brazoria County Clerk’s Office. A third contender for mayor, Jimi Amos, received 5.51 percent of the vote.

“We have run a very positive campaign and it shows. People came out because they believe in the same message. It’s time to work; we’ve worked extremely hard, a lot of people know it doesn’t stop here. We have to continue the momentum and see where it takes us. I’m just a guy who has been active in his community who really cares about where this community is going to go,” Wiltz said about his campaign, which is entering a run-off election in June.

Nice. There were a couple of races of interest for Pearland City Council as well:

Incumbent Gary Moore also won his re-election bid on May 6. After securing 58.65 percent of the early votes, Moore came out with 55.32 percent of the total votes, beating out contender J. Darnell Jones. Moore will serve his second term on city council; he was first elected to serve in 2014 when he beat out then-incumbent Susan Sherrouse.

[…]

The most contested race of the election cycle is Pearland City Council position No. 7, which had six contestants running for the newly created council position. Because no contestant secured at least 50 percent of the vote, a run-off election will be held in June.

Shadow Creek Ranch resident Dalia Kasseb secured 40.78 percent percent of the vote. Kasseb will run against Woody Owens who received 21.05 percent of the vote.

“We’re going to keep at it keep sending our positive messages, keep talking to people and hearing their voices. We’re going to keep talking about the real issues and keep everything positive. That’s the main thing I want my campaign to be,” Kasseb said. “People in Pearland want diversity; they see that change coming in the future, and I’m going to keep fighting to make sure the voices of Pearland are going to be represented in council.”

If elected in a run-off, Kasseb would be the first Muslim elected to public office in Pearland and Brazoria County.

Wiltz and Jones were Project LIFT candidates. Dalia Kasseb was not, but as that second story notes she received support from the Brazoria County Democratic Party and had done a lot of campaigning in tandem with Wiltz. My guess is there was at least one other Democrat in that race, and I won’t be surprised if she gets a TDP nod for the runoff.

Last but not least, there will be a runoff in the San Antonio Mayor’s race, with incumbent Ivy Taylor facing Council Member Ron Nirenberg. I wasn’t following that race very closely.

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.

Business groups endorse a Yes on recapture re-vote

It’s a very different campaign this time around.

The Greater Houston Partnership and other local organizations whose members own some of the city’s priciest commercial real estate have come out in support of a ballot measure over whether the Houston Independent School District should pay its share of property taxes to the state as part of the so-called Robin Hood system of school finance.

The business coalition, which also includes Central Houston, the Houston Building Owners and Management Association, Uptown Houston, the Houston Business Realty Coalition and the “C” Club, said the school district should pay the $77.5 million it owes to the state.

If not, it faces having $8 billion of the city’s highest-valued commercial properties permanently reassigned to another school district, a process referred to as “detachment.”

The detachment process would affect more than 80 commercial properties in the Galleria, Greenway Plaza, and downtown Houston, the coalition said in a statement Monday afternoon. While the value of commercial property slated for detachment this year is $8 billion, HISD estimates it would climb to $22 billion in 2018.

“No one in our community wins under detachment,” Greater Houston Partnership president and CEO Bob Harvey said in the statement. “We are encouraging a vote in support of Proposition 1 so that Houston businesses can continue to help fund Houston’s public schools and its future leaders.”

BOMA supported recapture last November, one of not too many groups or officials to do so. (If the other groups took a position last time, I don’t know what it was.) Very simply, most of the endorsements I saw last year were against the recapture, and most of the ones I am seeing now are in favor. In fact, as I was drafting this post, I saw an ad on TV (on ESPN during the Cubs-Pirates game) in favor of the recapture referendum, paid for by a group called “Houston Taxpayers for Quality Education”. None of this is any guarantee of success for the Yes side – this whole election is too much of an oddball to feel secure in any prediction – but for what it’s worth, the most consistent message I have seen is a message of voting for recapture.

Early voting so far

The Chron looks at the first day of early voting and some area races.

Early voting began Monday for local elections next month that will determine who leads increasingly diverse Pasadena, the fate of a major school bond referendum in League City and whether Houston’s largest school district pays tens of millions to the state to comply with a controversial policy and avoid a potentially bigger financial hit.

Across Harris County, 1,153 voters turned out Monday for the elections, figures show. They included many who live within the Houston Independent School District and voted for a second time on “recapture,” a process through which so-called property tax-wealthy school districts pay the state to help fund districts that collect less.

[…]

Two candidates, Bill Benton and Edmund Samora, are seeking to unseat Rosenberg Mayor Cynthia McConathy, who stirred debate last year after sending an email to city employees inviting them to participate in prayer at the start of the new year. Richmond Mayor Evalyn Moore has been serving in her post since the 2012 death of her husband, Hilmar Moore, who had been the city’s mayor for 63 years. She now faces Tres Davis, who is running what an online fundraiser calls a “People’s Campaign.”

Meanwhile, in Stafford, longtime Mayor Leonard Scarcella, who has held his seat since 1969, is running unopposed.

Sugar Land has only one contested seat: that to fill the position of Harish Jajoo, a city councilman who ran unsuccessfully in 2016 to be the city’s first South Asian mayor. He chose not to seek re-election as a councilman.

Of note among school district trustee races, Lamar Consolidated ISD’s Anna Gonzales, who was indicted on charges related to bribery in a case that was dismissed last year, faces an opponent in Joe Hubenak, the son of the late state representative and LCISD board member by the same name.

In Brazoria County, Pearland voters are heading to the polls to vote for mayor, City Council and school trustees. A letter from a real estate agent denouncing “liberal gay rights Democrats” trying to take over the city and school board elections there – which are nonpartisan – drew ire from many progressive groups, as well as longtime Mayor Tom Reid and two other candidates endorsed by the letter.

In Clear Creek ISD, the district is asking voters to approve a $487 million bond that officials say is needed to build new schools and keep up with growing student populations. But conservative groups are concerned that the bond’s steep price tag includes too many unnecessary frills, such as $13.7 million to renovate Clear Creek High School’s auditorium.

Consternation over the bond has set up a showdown between two warring political action committees, or PACs, which have spread from national races down to municipal races and local bond referenda.

The Harris County Clerk is sending out its daily EV reports as usual, with a new feature this time – they are posting that report online, which you can find here. As that is a generic URL, I presume it will simply be updated each day, so be sure to hit Refresh if you’re going back at a later date. The vast majority of the vote in the usual places should be for the HISD recapture referendum. There’s no way to tell how many of the mail ballots are for that and how many are for the other races. I may venture some guesses at overall turnout later in the process, but for now I’m just going to shrug and say this is all too new and unprecedented to make anything resembling an educated guess. Have you voted yet (I have not yet), and if so how are you voting on the HISD issue, if that’s on your ballot?

Endorsement watch: Chron for Van Houte and recapture

Here are your Chronicle endorsements for the May election. First, for Mayor of Pasadena:

Pat Van Houte

Of the five candidates who met with the Chronicle editorial board – two declined – only Van Houte was willing to bluntly and accurately diagnose the challenges facing Harris County’s second-largest city. Legacies of favoritism, opacity and, yes, discrimination continue to hamper progress at Pasadena’s City Hall. A petrochemical boom is driving growth all across east Harris County, yet Pasadena remains constrained by a political leadership that, as Judge Lee H. Rosenthal wrote in her recent opinion, has denied equal opportunity to all of its citizens.

Plenty of Pasadena residents certainly won’t enjoy reading Rosenthal’s words. Every other mayoral candidate preferred to pick up the pom-poms and cheer on the city’s blue-skies future. But discrimination is like a cancer that can fester beneath the friendly surface of civil society, from a road plan that ignores Hispanic neighborhoods to a redistricting scheme intentionally designed to disenfranchise Hispanic voters. Structural discrimination won’t go away by ignoring it. Pasadena needs a mayor who is willing to confront these challenges. Chemotherapy is never pleasant.

Van Houte has a record of standing up for the hard fight during her eight years on City Council – and like so much of Pasadena politics, it all began with street construction.

Back in 2006, Van Houte was part of a successful campaign opposing a road expansion project through her neighborhood. That activism led her to represent the northeast District D at Pasadena City Hall. Van Houte, 60, eventually worked with other representatives to block an infrastructure bond that failed to properly address dilapidated northside neighborhoods. Mayor Isbell responded by shoving an unconstitutional redistricting scheme down Council’s throat and trying to silence his opponents. Nevertheless, Van Houte persisted. She was forced out of a City Council meeting and saw her seat redistricted away, but that didn’t stop Van Houte from winning her current at-large position.

Now she wants to replace the term-limited Isbell and run a city government that’s open to all of Pasadena instead of merely the well-connected. This means fairness in contracting, competitive bidding, soliciting community input and promoting transparency. Van Houte also said that she wants to reinstate a public transit circulator for senior citizens that the city had stopped funding.

My interview with Van Houte is here; I also interviewed Gloria Gallegos, who was not mentioned in the endorsement article. I’d love to know who the two no-shows were. I was chatting with someone about the Pasadena Mayoral race the other day and we observed that it was relatively low profile, which likely would be the case most years but maybe not so this year, given the court case and the sea change from the Isbell era and the large field of candidates. I think it just may be the case that with seven candidates, this race will surely go to a runoff, and that’s when the real excitement will happen.

Closer to home (for me, anyway), the Chron endorses a Yes vote on the recapture re-referendum.

In November, we urged HISD voters to cast ballots AGAINST purchasing attendance credits, and voters agreed.

Now, HISD voters are being asked to come back to the polls on May 6 to respond to the same question, and no doubt are wondering why.

The answer is dizzyingly complex, but the choice is simple. In November we urged you to hold your nose and vote AGAINST on Proposition 1. On May 6, we urge you to hold your nose and vote FOR. Early voting begins Monday and ends May 2.

As in November, May voters have to decide between two lousy choices – either authorize HISD to write a big check to the state government every year for the foreseeable future, or give away a huge chunk of Houston’s tax base forever.

[…]

If AGAINST voters prevail, the district will lose future tax collections on detached properties. This matters in particular because some of those tax revenues are used to pay back the district’s bond debt. As more and more commercial properties are detached, a larger percentage of the responsibility to fund public education would shift to homeowners and remaining business owners.

A FOR vote won’t fix school finance. But it makes the best of a bad situation.

The Chron endorsed a vote against recapture last year not once but twice. As you know, I agreed with them then, and I agree with them now. In my observation, most people and groups making endorsements on this issue are on the Yes side as well, whether they had been that way to begin with or not. That ought to help, but I think a lot of people are still confused by this whole issue, and if they are still confused and voted No last time, I’d have to think they’d vote No this time. If they do vote, of course, which maybe they won’t since we’re not used to voting in May. This is going to be a very weird election. Be that as it may, my re-interview with David Thompson on the matter is here. I hope it helps clear up any lingering questions you may have.

I don’t know if the Chron intends to do any further endorsements or not. They have not traditionally done so in May elections before, but as we know, This Time It’s Different. Plus, there are contested Mayors races in Katy and Pearland, where as in Pasadena that has not usually been the case. I’ll understand if this it, but I’ll still hold out some hope that it’s not.

Early voting for May elections begins tomorrow

Tomorrow is the first day of the nine-day early voting period for the May 6 election. I’ve generally not paid a great deal of attention to these May elections, but it’s safe to say that This Time It’s Different, and not just because I myself have an election to vote in. The people who live in the following political jurisdictions in Harris County have a reason to vote as well: City of Humble, City of Pasadena, Houston Independent School District, Humble Independent School District, Northgate Crossing Municipal Utility District 2, Northwest Harris County Municipal Utility District 28, Oakmont Public Utility District, Harris County Water Control & Improvement District 91. You can see the locations and schedule for Harris County early voting here.

Note that there are other elections within Harris County that are not being conducted by the Harris County Clerk. This means that they have their own polling places and early voting schedules, which may or may not include Saturday the 29th and Sunday the 30th. Among them are:

Pasadena ISD – a list of their candidates with a link to their 30 day finance reports is here.

Katy ISD – see their list of candidates here.

San Jacinto College – locations and schedules are here, list of candidates is here.

City of Katy, which also has some charter amendments. Here’s some information about their candidates for Mayor and City Council Ward B. There was no election held in Katy in 2015 because no one filed to run against any of the incumbents, so they decided not to bother with it.

Other elections of local interest are in Fort Bend County and Brazoria County. For Fort Bend, note that the different locations have different hours, with some of them being open each day while some others are not. Check the links before heading out.

And of course there’s the HISD recapture re-vote. I am voting for recapture and recommend you do the same. The No vote last November accomplished what I hoped it would. Now is the time to move forward.

So there you have it. There are other elections around the state, the most interesting of which is surely the San Antonio Mayor’s race in which incumbent Ivy Taylor is seeking a second full term, but these are the local races of interest that I know of. Most of these elections get comically low turnout, so your vote counts for a lot if you actually go an cast it. We’ll see if it really is different this year or not.

Re-interview with David Thompson

Last year, I published an interview with attorney David Thompson, who has worked with HISD for a long time on legislative and financial matters, including on the endless litigation over school finance, to discuss the November referendum on recapture. He clarified a lot of items, such as the wording of the referendum, the things that could be done to affect how much HISD would be required to pay, and what a No vote would mean, and in the end he endorsed a vote against the referendum in the hope of spurring action. Since then, as we know, the Texas Education Agency has indeed taken action that reduces HISD’s recapture payments, and the HISD Board of Trustees has put the item up for a vote again on May 6, with early voting from April 24 through May 2. This seemed like an excellent opportunity to talk to Thompson again about what has changed and why a Yes vote this time around makes sense. Here’s our conversation:

As noted, early voting begins April 24 and runs through May 2. Here are your early voting locations and hours, not just for HISD but also for (deep breath) City of Humble, City of Pasadena, Humble Independent School District, Northgate Crossing Municipal Utility District 2, Northwest Harris County Municipal Utility District 28, Oakmont Public Utility District, and Harris County Water Control & Improvement District 91.

What HISD is saying about recapture

Here’s their official webpage. I think you’ll be able to discern their position.

HISD voters will be asked on May 6 how the district should pay its Recapture obligation to the state of Texas: by Purchasing Attendance Credits or through Detachment of Commercial Property. Here’s the language that will appear on the ballot:

“Authorizing the board of trustees of Houston Independent School District to purchase attendance credits from the State of Texas with local tax revenues.”

A vote FOR means Purchasing Attendance Credits by writing a check to the state for local property taxes. It also means:

  • The district will continue to make annual recapture payments as long as property wealth grows.
  • Our total tax collections will continue to grow to offset these payments as property values rise.
  • The district will have more capacity in the future to fund schools.

A vote AGAINST Purchasing Attendance Credits means Detachment of the most valuable non-residential, commercial properties from the district’s tax roll. The properties will be reassigned to other school districts for taxing purposes. It also means:

  • Under current law, those commercial properties will be permanently detached, and the district will permanently lose those tax collections for district operations.
  • The district will lose debt service tax collections used to pay back bonds, which is debt used to build schools.
  • The district will face budget cuts and have less capacity to fund schools.

There’s more, but you get the idea. In addition, Trustee Anna Eastman, who was one of the louder voices in favor of the November referendum, has am op-ed touting this one as well. Please note that the referendum wording is dictated by state law – HISD has no discretion, so don’t gripe at them if you don’t like it. The HISD Recapture Flyer (English version) and Recapture FAQ came home as printouts in my fourth-grade daughter’s weekly folder, so at least one school is getting the word out to parents. Have you received any official communication on this, from your school or an elected official? Leave a comment and let me know. Remember, early voting begins on April 24 and runs for a week, with the final vote on May 6.

MALDEF files suit over change to recapture

This is a twist.

Texas education officials illegally changed how property taxes are calculated in wealthy school districts, with the effect of substantially reducing the funds available for schools in poorer districts, a lawsuit filed Thursday charged.

The change would cost the state’s poorer schools districts and their students approximately $440 million per year or $880 million for the two-year funding cycle, according to the lawsuit filed by MALDEF (Mexican American Legal Defense and Educational Fund) and the law firms Gray & Becker, P.C. and Ray & Wood, on behalf of Le Feria and Joaquin Independent School Districts.

The La Feria Independent School District in Cameron County and the Joaquin Independent School District in Shelby County want the court to permanently block the newly amended rule adopted February 1, calling it invalid and unenforceable.

“Breaking the rules to once again benefit property-wealthy districts to the detriment of our property-poor districts is not the fix we need for our broken public school system,” said Marisa Bono, MALDEF Southwest regional counsel. “We look forward to vindicating in court our clients’ efforts to ensure fair funding for all students.”

Texas’ system of “recapture” requires wealthier school districts with more valuable property to send some of their tax funds to the state to help fund poorer districts. Those funds are then administered through the Foundation School Program.

The recapture formula assesses the contributions of wealthier districts based on the full value of each property. But those districts may provide two types of tax deductions to residents. The first is a mandated $25,000 homestead exemption. The second deduction allows districts the option of granting an additional homeowners exemption of up to 20 percent of a home’s value, known as a local optional homestead exemption (“LOHE”).

State law allows some wealthy districts to reduce their contributions to recapture and the Foundation School Program by recognizing the LOHE-reduced property values. However, state law provided clear conditions to ensure that poor districts aren’t underfunded. Those conditions required that either state lawmakers appropriate more funding, or that there be a surplus in the Foundation School Program. Until recently, the Texas Education Agency (TEA) interpreted the law to apply only when those conditions were met.

But in February, state education officials issued a statement changing its longstanding rule. Lawyers for the two plaintiff school districts argue that education officials illegally bypassed the existing rule, allowing certain wealthy districts with LOHE’s to reduce their contribution to recapture, without appropriating funds to fill the gap.

“The Education Code provides that the mission of the public education system of this state is to ensure that all Texas children have access to a quality education,” said Richard Gray of Gray & Becker, P.C. “The recent actions of the Commissioner work squarely against that mission and will result in funding flowing only to students in certain property-wealthy districts of TEA’s choosing while at the same time cutting funding to other districts. It is estimated that the recent actions of the Commissioner could cost close to one billion dollars for the 2018-2019 school year and that cost will only increase in future years.”

Under the new rule, La Feria ISD will lose over $225,000 per year, or $1,435 per classroom a year. Joaquin ISD will lose over $48,000 per year, or $1,548 per classroom. These financial losses are reflective of the financial loss that many property-poor school districts throughout the state will incur as a result of the new rule.

The lawsuit comes as state lawmakers debate how Texas will finance public education for the more than 5 million students currently enrolled in schools across the state. The Texas Supreme Court ruled in May last year that while the state’s school finance system met “minimal constitutional requirements,” it needed comprehensive reform.

Read the lawsuit here.

This would of course affect HISD, though MALDEF did not mention them by name in that release. KUHF has the only news coverage of this I’ve seen so far.

HISD is not a party in the lawsuit, but said in a statement that it believes the commissioner’s decision was legal and will monitor the case and “is prepared to intervene if necessary to protect the interests of our students and taxpayers.”

At the very least, this puts a bit of uncertainty into the May 6 recapture re-vote, which the HISD Board is trying to sell to voters. One possible way to satisfy the conditions MALDEF is suing over is for the Lege to make up the difference to the school districts that are affected by the re-interpretation of the recapture rules. Rep. Dan Huberty’s HB21 might be able to do this, in an amended form if need be. I don’t know how likely that is to happen, but it’s a possibility. There are a lot of ways this can go, so we’ll have to wait to see what the defendants, the Lege, and the courts do.

Reintroducing recapture

The tune has changed, and it’s time we make sure everyone knows it.

It felt like déjà vu to many of the 150 people who packed into Tinsley Elementary School’s auditorium Wednesday evening.

Facing another controversial Houston ISD school finance referendum, speakers debated two unfavorable options, both of which will cost the school district millions of dollars.

Wednesday’s forum served as the latest update in a school finance saga that has pitted Houston ISD against the state after 62 percent of local residents voted in November against paying the state millions in so-called recapture fees.

Board President Wanda Adams, who hosted the town hall, thanked those present for voting against recapture in November. But she asked them to vote in favor of writing a recapture check. “Because of your no vote, you actually won. We were the first district ever to tell the state no, the first to say we will not write a check until you fund public education,” Adams said.

The Houston ISD Board of Education voted in February to hold a second referendum on the issue May 6 after the state lessened the amount HISD would pay in recapture fee and threatened to “detach” commercial properties.

Glenn Reed, general manager of HISD’s Budgeting and Financial Planning, said this referendum is different than the one that appeared in on the November ballot.

“This is not a vote on recapture; it’s a vote on how you want us to pay it,” Reed said.

Well, to be exact, the November referendum was about how to pay for recapture, too. Adams is right that we got what we wanted out of that No vote. As you know, I believe we should accept that victory and vote Yes this time around. Early voting begins April 24, which is just over three weeks from now. We’re not used to voting in May in Houston – we have primary runoffs in May, but that’s different. There’s no turnout model for this, we’re all just going to be guessing. Those guesses are going to be on the low end, it’s just a matter of how low. HISD is going to have to convince some people to show up for them if they want to win again.

The updated bill for recapture and detachment

Here are the numbers as we now face them.

Houston ISD voters will face a choice of either paying the state’s $77.5 million recapture fee, or risk losing $98.4 million in tax revenue over the next fiscal year, according to new dollar figures given to trustees.

Those were the options presented to HISD trustees Thursday when for the first time school district officials gave firm numbers on both scenarios since voters last November told district officials to not pay the state’s recapture fee. Recapture involves the state’s mandate that the district pay millions to help subsidize poor districts.

Houston ISD faces recapture because, according to the state’s funding formula, the district is deemed property wealthy even though most of its student population is economically disadvantaged.

Glenn Reed, general manager of HISD’s Budgeting and Financial Planning, said the district would end up with less money over time if the state detaches property than if it pays the state’s recapture fee. That’s largely because Houston commercial real estate values are expected to grow in the next five years. If the state takes away some of those properties, Reed said the district will lose out on both those property taxes and any increases in taxes realized through higher property values.

“For HISD, our investment is our properties,” Reed said. “As our properties’ (values) continue to grow, that helps us build schools and fix costs and so on.”

[…]

During the meeting, Reed also reviewed the language that would appear in May’s referendum. It would ask: “Authorizing the board of trustees of Houston Independent School District to purchase attendance credits from the state with local tax revenues.” A vote “for” purchasing attendance credits would mean the district would willingly pay the state’s recapture fee. A vote “against” would mean the state would detach some local personal property.

If HISD keeps all its commercial properties and benefits from increased property values, Reed estimated the district could see its budget continue to grow over the next five years by $66.8 million after the recapture payment is made. If the commercial properties are detached, he said the district could see a loss of $98.4 million in 2017-2018 and would lose any future property value growth.

See here and here for the background. As noted before, I voted No on the November 2016 referendum on the hope that rejecting recapture might spur some legislative action and the knowledge that we could vote again if we needed to. I figured a re-vote would be to possibly reconsider the consequences of detachment if nothing good happened; I honestly didn’t expect a re-vote after a positive development like the TEA reinterpretation of the Robin Hood law. But here we are, and I believe that having achieved a substantial victory, albeit not a complete one, we should grab onto it and move forward. So I will vote in favor of recapture this time around, which by the way will be less than eight weeks from today. I figure the encore vote will have much lower turnout than the original did. Has any of what happened since November changed your mind, and your vote, on this?

House releases school finance fix bill

A step in the right direction.

Rep. Dan Huberty

The top public education policymaker in the Texas House unveiled a $1.6 billion plan on Monday that he described as a first step to overhauling the state’s beleaguered school funding system.

At a Capitol press conference, state Rep. Dan Huberty said House Bill 21 would boost per-student funding for nearly every public and charter school in the state while reducing the amount of money wealthier school districts are required to give up to buoy poorer ones. The state’s so-called Robin Hood plan has become a hot-button political issue as large districts like Houston have recently had to begin making payments.

“House Bill 21 will not only improve our schools but it will also reduce the need for higher property taxes,” said Huberty, a Houston Republican who chairs of the House Public Education Committee.

[…]

He said HB 21 would increase the basic funding for almost all school districts from $5,140 to $5,350 per student per year. That would happen in part through an increase in transportation funding by $125 per student for all school districts, including property-wealthy districts that currently have limited access to that money.

It also would increase the amount of money the state gives to schools for students with dyslexia. And it would include additional funding for high schools and non-professional staff.

Huberty estimated it would lower payments that property-wealthy school districts pay to the state to subsidize property-poor school districts by $163 million in 2018 and $192 million in 2019. As the state’s share of school funding has decreased, more school districts with swelling enrollment are on the hook for such Robin Hood payments.

The bill is similar to an unsuccessful school finance initiative filed in 2015 that would’ve injected twice as much money into the system — $3 billion — and boosted per-student funding across the board. Still, $1.6 billion is a significant sum amid the current budget crunch.

This bill had a hearing yesterday as well, and despite being overshadowed by the sound and fury of the bathroom bill hearing, there was a report about it.

The bill would inject about $1.6 billion into the public education system, boosting funding for almost every school district in the state although a few would be left out. It also wouldn’t renew a soon-expiring program that awards supplemental state funds to more than 150 districts to offset a decade-old property tax cut — a major concern for education officials who depend on the funding. A provision in the bill that would award some grant money to make up for the loss isn’t enough, they told the committee Tuesday.

“My districts are going to lose,” said Mike Motheral, executive director of the Texas Small Rural School Finance Coalition. He said he represents 14 West Texas school districts that could lose up as much as 53 percent of their state revenue with the end of the state aid program.

“One of my districts will lose $4.5 million and they have a $10.5 million budget,” he said.

When the Legislature reduced property taxes by a third in 2006, it guaranteed school districts like the ones Motheral represents at least the same amount of funding they received in 2005-06 through a state aid initiative. The extra aid expires Sept. 1, so many districts have been asking for an extension to avoid falling off a funding cliff. About 156 school districts currently receive such aid.

As written, the bill proposes letting the initiative providing extra state aid expire and instituting a $100 million two-year grant program, prioritizing districts that would lose money through the new funding formulas. That’s not enough to cushion the blow, school officials told the committee Tuesday.

[…]

Numbers released Monday along with the bill show that about 35 of the state’s 1,200 school districts and charters would lose funding in 2018 and 58 would lose funding in 2019. The rest would see basic funding increase from $5,140 to $5,350 per student annually thanks to an increase in transportation funding and more money for students with dyslexia.

Many school officials and advocates who testified on the bill Tuesday said it leaves too many behind.

“We want a bill that has no losers,” said Christy Rome, executive director of Texas School Coalition, which represents mostly wealthier school districts.

Here’s HB21. I agree with Christy Rome and Mike Motheral. There shouldn’t be any losers in this. As much as HISD and the other districts affected by recapture should be made right, it should not come at the effect of these other districts. The right answer is the put enough money in to fix the formulas. Easy to say, and Lord only knows what kind of reception this gets in the Senate. But this is what it comes down to, and what needs to happen. The Chron has more.

How the Legislature is raising your property taxes

RG Ratcliffe explains it all to you:

Just how much money does the increased appraisal on property in your school district and elsewhere save the state budget writers? The projection is $1.5 billion for the next two-year budget. And where does this money go? In its initial budget, the Senate plans to use the savings on other state expenditures. The Straus starting-point budget includes giving the money to the public schools, but only if a school finance reform passes. But even if the $1.5 billion is put back into the school system, the state’s share of funding the public schools will decline to 39 percent by 2019 without a major boost in state spending.

That figure does not include the $3.8 billion that the state will recapture from property-wealthy school districts over the next two years to redistribute to low-wealth school districts. (That amount is about equal to what the state collected in oil-and-gas severance taxes in the current two-year state budget, or to the taxes collected on alcohol and tobacco combined, or about twice the tax motorists paid to fill the tanks of their cars and trucks.)

In the meantime, a program that was meant to keep school districts from losing money because of 2006 property tax cuts is set to expire. A decade ago, state legislators wanted to make certain that no school district had its budget cut because of state-mandated tax cuts, so they set up a program called Additional State Aid for Tax Reduction. Originally, they intended the program to phase out as property values rose. But faced with a budget crunch in 2011, the Legislature put an expiration date on the program: September 1, 2017. When the program expires, it will leave 175 school districts faced with having to raise taxes or cut budgets to make up for $225 million in lost state funding. For the 55,000-student Frisco school district near Dallas, that means a $30 million budget cut, while the 100-student Webb Consolidated on the border will lose $4.3 million in state funding – 66 percent of its total operating budget. Losing the state tax-relief funding is a hardship for the districts; for the state’s budget writers, it’s just another $225 million they won’t have to finance.

“Even though the state is working to say, ‘We want to provide property tax relief,’ they benefit from higher tax rates and higher tax efforts made by the locals,” Christy Rome, executive director of the Texas School Coalition, told me.

[…]

Plano ISD last year sent Governor Greg Abbott a letter explaining, how as a property-wealthy district, rising values did not increase funding for local schools even though local property owners were paying higher taxes. In the 2015-16 school year, the PISD collected $470 million from local taxpayers, sent $52.6 million to the state for redistribution, and kept $417.6 million to pay for local education. If the district did not change its tax rate, rising values would push tax collections up by almost $40 million, but the state would now take an additional $43.6 million in recapture and leave the district with $5 million less to pay for schools.

The district could cut the tax rate so that total tax collections stayed the same, but the formulas would still take an additional $25.6 million because of rising property values and leave Plano with $392 million to run its schools—a $25.6 million cut from the previous year.

The other idea was to give taxpayers some relief by adopting a $10,000 local option homestead exemption while leaving the tax rate unchanged. But even this proved problematic for PISD: the district would raise another $30.2 million in total property tax collections and boost the transfer of funds to the state by $43.6 million, all while leaving the district with $13.4 million less to pay for schools.

No matter how it was calculated, Plano taxpayers paid more, the state reaped cash that lawmakers could use to reduce how much they had to spend on public education, and the schoolchildren of Plano were left with less money to pay for their education.

Read the whole thing. And as RG says, when you hear Greg Abbott say that he wants to cut the business franchise tax even more, understand that he’s really saying he wants to put a bigger share of the burden of paying for schools on you.

Recapture re-vote will happen

Mark your calendars for May 6.

On Thursday, the board voted 5-3, with one abstention, to put another referendum on recapture on the May 6 ballot. Placing a second referendum on the May ballot will cost the district $800,000, according to an HISD spokesman

Trustee Rhonda Skillern-Jones, who campaigned in favor of not paying recapture with the first referendum, said HISD called the state’s bluff, and, in turn, the state called HISD’s bluff, but the state has the upper hand.

“The TEA offered this; the TEA is the same agency that has the power to take this district over. If they take over, do you think they’ll send people who care about equity or our kids? Their whole agenda is not about our kids,” said Skillern-Jones, who voted in favor of the second referendum.

But Trustee Jolanda Jones, who spearheaded the effort to reject paying recapture, said the whole reason for the first referendum was to get the Texas Legislature to move on overhauling school finance.

She said if the district pays recapture this year, the recapture fees will keep going up each year, essentially robbing the district of more and more money.

“The only reason they’re paying attention is not because we have a great lobbying team, it’s because we voted no,” Jones said.

About 10 speakers at Thursday’s meeting lambasted the idea of the board reversing its stance on paying the recapture money. Ken Davis, principal of Yates High School, said the TEA’s lessening HISD’s recapture bill is not a favor.

“That’s not a gift -they’re still taking money from our schools,” Davis said. “Push back on that. You are all standing at a time where you set a standard for what the rest of the state does. Stand up and take a step forward.”

See here and here for the background. According to the HISD News Blog, Wanda Adams, Rhonda Skillern-Jones, Anna Eastman, Mike Lunceford, and Holly Maria Flynn Vilaseca voted for the approval of election, while Diana Dávila, Jolanda Jones, and Manuel Rodriguez voted No, with Anne Sung abstaining. I know Eastman was a Yes vote on recapture back in November; she is the only Trustee that I’m certain favored it at that time. I appreciate what Jolanda Jones is saying here, but I lean more towards what Rhonda Skillern-Jones is saying. I think this reduced bill for recapture, which came about after the TEA reinterpreted existing law to give HISD and other districts a break for allowing a larger homestead exemption, is the best we’re going to get without the Legislature getting involved, and I would not bet on that happening. This isn’t the outcome we really wanted, but it’s a lot better than where we began. I think we should declare victory, take the half-a-loaf being offered to us, and make an extra push for a genuine legislative fix in 2019. KUHF and Swamplot have more.

HISD Board to discuss recapture re-vote today

We should find out today if a re-vote on recapture is in our future.

At their monthly meeting Thursday, trustees for the Houston Independent School Board will consider putting recapture back on the ballot.

[…]

In November, HISD voters rejected the traditional way to send a check to the state. Now HISD must pay with actual commercial property – almost $18 billion worth. In July, Education Commissioner Mike Morath is scheduled to detach that property and let another district, such as Alief or Aldine ISD, tax it instead. That’s known as detachment and will reduce HISD’s tax base.

“The only way we can be in this negotiation period is if we do not go into detachment,” HISD Board President Wanda Adams said.

“The homeowners are going to take the brunt of that, not the commercial properties, the homeowners. Right now it’s not a win-win for anyone, but right now at least we have them moving,” she added.

That’s why HISD may give voters another shot at the issue in May.

At the same time, HISD’s bill to the state has dropped by $55-60 million, according to state estimates. That’s more than a 30 percent drop from the original bill of $162 million.

See here for the background. One of the reasons why I was willing to vote No on recapture in November was the possibility that we could have a do-over in May if the Lege did not take action to mitigate the damage. Turns out we didn’t need the Lege to make something positive happen. I believe the No vote provided the impetus for that development. As such, I’m willing to vote for a reduced recapture bill if the Board sees fit to undertake one.

UPDATE: The Chron editorial board takes note of the developments.

A re-vote on recapture?

This is very interesting.

After reconsideration of an 18-year-old law, state education officials are adjusting their school finance calculations in a way that could save several dozen school districts roughly $100 million — while costing the state the same amount in revenue.

One of the apparent beneficiaries is Houston ISD, where the change means taxpayers will be sending about $60 million less to the state for public education than they had expected.

At issue is a calculation for recapture — the state’s term for the money that districts with higher property wealth send to the state for use in districts with lower property wealth.

It’s more commonly known as the Robin Hood system of school finance.

Some of those rich districts — “rich” here refers to the value of the districts’ property and not the income of its residents — have adopted homestead exemptions that are bigger than the exemptions mandated in state law. All school districts in Texas have to let homeowners deduct $25,000 from their taxable property values, but districts are allowed to raise those exemptions up to 20 percent of a home’s value.

Not all districts do that, and not all of those that do that are property rich. But some — including Houston ISD, the biggest one in the state — offer the higher homestead exemptions and are also subject to recapture, and they’re the ones subject to the new calculations from the Texas Education Agency.

In a letter sent Feb. 1 to school administrators, the agency’s associate commissioner for school finance said that starting in the current school year, TEA will include half of the money the districts have forfeited in optional homestead exemptions when calculating how much recapture money those districts should pay. That’s the agency’s new reading of a law that’s been on the books since 1999.

“The commissioner thinks he has the latitude to give them half credit for this,” said state Sen. Paul Bettencourt, R-Houston.

The recalculations would trim those districts’ bills considerably — by $100 million in rough numbers. In addition to Houston ISD, the unofficial list of beneficiaries of the new calculation include Spring Branch ISD, Highland Park ISD, Lake Travis ISD and Comal ISD. Officials with TEA said they have not yet calculated exact amounts for each district but said the $100 million is a reasonable estimate of the total cost this year.

[…]

Houston ISD said Friday evening that the board will consider a do-over and will vote next Thursday on whether to hold another election on May 6 to give voters an opportunity to reverse that November vote.

The effect of this new interpretation of the law would be to reduce HISD’s bill for recapture by about $60 million. HISD would still need to pay a bit more than $100 million to the state, so this is hardly a cure-all, but it’s a significant savings.

To me, this is a win for the No vote on recapture last November. As the story says, the TEA could have interpreted the law in this fashion, to allow districts that grant the higher homestead exemption more credit in the byzantize school finance system, years ago. I believe one reason – maybe not the only reason, but surely a big reason – why it didn’t happen before now is because there wasn’t a loud enough voice demanding the change. HISD’s No vote on recapture was a big deal that got people’s attention and focused some energy on just how screwy the system had become. Another boost to their argument was that HISD was being penalized for having a lower tax rate than it could have had. This particular kink in the way the finances were calculated was one of the things that “No on recapture” advocates like David Thompson pointed out, as it was a simple fix that could be easily implemented and would not only be fair but also have a big effect. Maybe this happens anyway if HISD meekly paid its recapture bill, but if anything should be clear at this point in time, it’s that kicking up a fuss tends to be a better way to get what you want.

Bettencourt’s office put out a press release lauding HISD for scheduling another vote. I haven’t seen any other reporting on this – as of Saturday there was nothing on HISD’s website or Facebook page about this – so he’s either being a bit premature or he’s gotten some verbal assurance that the Board will indeed approve a May election at its Thursday meeting. The Board can claim a victory here, and it should be able to sell the idea of writing a smaller check to the state to its constituents and allies from the last election. I’d be inclined to vote Yes this time around – the problem isn’t fully solved, and even without a big school finance overhaul there are other things that could be done for recapture districts like giving credit for pre-K students, but it’s a step in the right direction. It will be interesting to see how the Board reacts, and to see if groups like CVPE and the teachers’ union go along. Whatever else happens, this was a good thing.

Senate to begin studying school finance changes

We’ll see what this looks like.

Leaders in the Texas Senate are vowing to find ways to overhaul the state’s school finance system, saying a recent Texas Supreme Court decision granted them a prime opportunity to shake up the heavily criticized status quo.

On Monday, they announced the creation of a Senate budget working group — led by Friendswood Republican Larry Taylor — to tackle the issue. That group will work with the Senate Education Committee, which Taylor chairs, to propose replacements for the current school finance system.

“The opportunity is huge for us to get it right,” said Jane Nelson, chairwoman of the Senate’s powerful Finance Committee. “We need a whole new method of school finance.”

They’ll face an uphill climb in a session where legislators face several obstacles to major reform, not the least of which is money. The announcement comes a week after the Senate unveiled its preliminary budget, which did not include additional funding for public education.

During the Finance Committee’s first hearing of the 2017 legislative session on Monday, Nelson, R-Flower Mound, advised the newly formed working group to “start with a clean slate” in recommending a new school finance scheme. “It should be less complicated, innovative and should meet the needs of our students,” she added.

[…]

“We’re left with a question mark as to what this effort will mean by the Senate,” said Lynn Moak, a school finance expert at the Austin-based consulting firm Moak, Casey & Associates. The main question is “whether they’re trying to reform school finance within existing dollars or looking for possible additional dollars to fund the system.”

Nelson last week unveiled the Senate’s $213.4 billion two-year budget proposal, calling it a bare-bones starting point for financial discussions in what promises to be a particularly tight-fisted year. That proposal did not touch funding formulas for public education.

The House’s base budget — also released last week — included an additional $1.5 billion that could be spent on public education only if the Legislature reforms the school finance system.

Here’s the Chron story, which has the local angle.

In Houston, where voters last November overwhelmingly rejected having local taxpayers pay the state for $162 million in so-called “recapture” of school funds, HISD Trustee Jolanda Jones said the creation of the Senate group signaled that the message from the ballot initiative had been heard in Austin.

“They’ve done more with HISD pushing back than they have in 24 years of hearing school districts complain about it,” Jones, a vocal opponent of “recapture,” said Monday. “Recapture is based on the premise of Robin Hood, taking from the rich and giving to the poor, but that’s never what it did. It took from the poor and reallocated to the poor. Help me understand why 75 percent of our kids are poor, really poor, receiving free and reduced-priced meals, and you’re taking money from us? It makes no sense; we need more money, not less.”

Because the district will refuse to pay the recapture fee, the Texas Education Agency has threatened to remove commercial buildings from HISD’s taxing district this July so it can give the money to other “property poor” districts.

HISD Trustee Anna Eastman said she hopes lawmakers will act before the TEA takes the property tax revenue from local commercial properties, though she is not sure overhauling the school finance system can be done in one session. But she was heartened to see the Senate look at the funding system.

“School finance can’t be based on some kind of cryptic formula that makes it so kids in a certain pocket are getting lots of money and others are getting little,” Eastman said. “Areas such as ours shouldn’t be picking up all the slack for areas that can’t generate revenue off property growth. It shouldn’t be that big of a gap.”

In Pearland, where local schools receive $9,358 per student, the lowest share in the Houston area, Superintendent John Kelly said that if the state does not increase its share, his district may have to dip into reserve funds to provide any kind of an increase to employees or to meet rising costs. He said lawmakers have been disingenuous in saying they want to lower taxes while requiring districts to raise more local taxes.

“They talk out of one side of their mouth ‘tax cuts’ for people, but on the other side they’re confiscating the increase in tax values across the state,” Kelly said of the Legislature.

That would need to be a part of any overhaul for it to be worth the name. I’m more wary than optimistic. I fear what we will get will be another shuffling of existing funds that will mostly change who’s getting screwed less. I don’t have any faith that Dan Patrick’s Senate will put more money into the system, or that they will alter it in a way that allows for, let alone mandates, covering the costs of growth in a sensible fashion. Let’s not forget that at the same time this is going on, there will be a renewed push for private school vouchers, which will only drain more money from public education. They could surprise me in a good way, and I will reserve judgment until I see what they come up with, but I do not start out feeling very hopeful about this. The track record of the players involved argues otherwise. RG Ratcliffe, who also sees vouchers in this, has more.

Sung and Vilaseca sworn in at HISD

The HISD Board is back at full strength.

Anne Sung

As Anne Sung and Holly Flynn Vilaseca took their oaths of office and became Houston ISD’s newest Board of Education trustees on Thursday, their husbands swaddled their months-old babies in one hand and held holy books in the other.

Sung’s 11-month-old daughter, Sarita, and Flynn Vilaseca’s 13-month-old, Nicolas, hardly made a peep as their mothers became leaders of the nation’s seventh-largest school district.

Sung was elected as the District 7 trustee and will replace Harvin Moore, who resigned from the board last summer. Vilaseca was unanimously appointed by the board Monday to fill the District 6 seat vacated by Greg Meyers, who resigned at the board’s December meeting.

Both new members will serve through 2017. Then their seats will be back up for election.

[…]

Holly Flynn Vilaseca

Sung and Flynn Vilaseca said top priorities include ensuring equity in terms of the number of talented teachers, funding and facilities across Houston’s campuses. Flynn Vilaseca said she would also like to focus on lobbying the state to abandon “recapture,” which takes money from so-called property-rich districts to assist those with lower property values.

Houston ISD officials have argued that because 75 percent of district students are considered low income, the money it pays to the state for recapture would be better spent locally.

Sung also hopes to make sure the board and district are operating ethically and transparently, particularly in the way it spends money.

Both also plan to focus on improving student achievement, especially among the district’s lowest-performing students.

“We need to bring attention back to doing what’s right for students and preparing them for life after high school,” Sung said. “We need to make sure we align what we’re teaching with what’s happening in the world.”

See here for more on Vilaseca. I’ve heard some chatter that she does plan to run for a full term in November, which will be a race to watch. I look forward to interviewing her down the line. In the meantime, the Board (which elected its officers for the year; Wanda Adams is now Board President) has a lot to deal with, including lobbying the Lege to do something about recapture, dealing with the revelations about special education, continuing the bond-funded construction projects, and so on. Welcome aboard, ladies (*), let’s get to work. The Press has more.

(*) In case you hadn’t noticed (I only just did), with the election of Sung and the selection of Vilaseca, the HISD Board is now comprised of seven women and two men.

Where we begin with school finance

A nice overview from the Trib on school finance, where the problems are many and the budget situation is non-optimal.

The current system is held together by a number of short-term fixes that have not been updated or reformed in decades. The Texas Supreme Court upheld the funding system as constitutional in May, and at the same time put the onus on state lawmakers to reform it — but few believe a major overhaul will come without a court order.

Even if legislators decided to tackle an overhaul of the whole system, experts say there is not enough money in state coffers to increase state spending, lower local spending and relieve Texans upset about rising property taxes. For now, some lawmakers are backing a simple plan to increase money to all school districts through the general appropriations bill, instead of taking apart the complex school finance system. Others have filed bills to tweak individual weights in the system, which provide additional money for disadvantaged student populations.

[…]

Legislators will also have to decide this year whether to re-up a program that provides extra funding for fewer than 200 districts that would otherwise have lost money in previous school finance rewrites. When the Legislature reduced property taxes by a third in 2006, it guaranteed school districts at least the same state funding they received for the 2005-06 school year by creating the Additional State Aid for Tax Reduction initiative.

That aid expires Sept. 1, but the districts still receiving the money are clamoring for an extension. “At some point, it does need to go away for the sake of more equity. But it can’t fall off a cliff at this point in time,” said Guy Sconzo, executive director of the Fast Growth School Coalition, which represents the fastest-growing districts in the state. “It does the entire system no good if any part of the system effectively goes bankrupt.”

So far, five legislators have filed bills to extend the funding program. State Rep. Ken King, R-Canadian, filed House Bill 811, which would extend funding through 2020-21. Sen. Lois Kolkhorst, R-Brenham, proposed an extension through 2022-23. Both lawmakers were members of their chambers’ public education committees last session.

King, who is on the short list to chair the House Public Education Committee this session, said some districts are still getting a large chunk of their overall funding through this program and that they cannot be cut off immediately. “I’m going to put a mechanism in place for school districts to roll off of the aid in 2021 and hopefully replace the dollars with another school funding system,” he said.

Other school finance advocates oppose the extension, calling it a “Band-Aid” that exacerbates the inequity among districts.

“It maintains an already inefficient portion of the system,” said Ray Freeman, deputy executive director of the Equity Center, which represents property-poor districts. Instead, he said, legislators should reform the base formulas so districts have access to a stable source of funds.

The Houston Independent School District will be a major focus this session because its voters in November rejected sending $165 million in local property taxes to poorer school districts. In the Texas finance system, districts with a wealthier tax base spend local money to help educate students in districts with less property tax money, as part of the “Robin Hood” or “recapture” system.

Texas Education Commissioner Mike Morath has warned that the state will probably move commercial properties from Houston ISD tax rolls to those of a nearby district. Houston legislators will be under pressure to find a way to ease the burden, as those property owners could face higher tax rates in their newly assigned districts.

David Thompson, an attorney representing Houston ISD, said a legislative win for Houston on school finance could also mean a win for other districts. “There are particular issues that would address some of the concerns in Houston and at the same time be helpful for schools across the state,” he said.

The state should update its formulas for determining which districts get transportation funding, and the state should also provide full-day pre-K funding for all districts, Thompson said.

“Everybody starts by saying, ‘There’s no money.’ There is,” he said. The state should allow the local dollars people are already paying to stay in education, instead of “siphoning local property taxes” for non-education purposes, he said.

But some legislators are saying Houston ISD voters dug themselves deeper into a school funding hole and should live with the repercussions. “I don’t think the Legislature has a lot of appetite to let Harris County out of recapture when everybody else is paying it,” King said.

[…]

School finance experts agree that increasing the basic allotment, the base funding each district receives per student, is likely to be the most popular way of changing the system. The House Public Education Committee recommended this approach in its interim report.

“The amount we set for the basic allotment drives the entire school finance system and, given our current system, increasing that amount would be a prudent move to help all districts,” said State Rep. Trent Ashby, R-Lufkin. “It’s important to note, this method can also be achieved through the General Appropriations Act alone, so it may also be the most realistic thing the Legislature can do this session without having to pass a stand-alone bill.”

It’s likely to be a favored proposal in the House, Ashby said. But like many other plans, it requires more dollars to public education, a difficult challenge this session, given that lawmakers have less money to spend than they did when they last met in 2015.

There’s also vouchers, the A-F grading system for accountability ratings, continued discontent with STAAR, curriculum and graduation requirements, etc etc etc. It’s important to remember that the local property tax boom that helped lead HISD and other districts into recapture is also a huge boon for the state budget, and not something legislators will give up easily. I think the best case scenario is some more money from general revenue, adjustments to the funding formula for transportation and pre-K as David Thompson noted, and a temporary extension of the Additional State Aid for Tax Reduction initiative with a plan to fix it next session. HISD will still owe recapture money even if all that is done, but I for one would feel a lot less aggrieved by recapture if these things happened, and would support a recapture re-vote to take place before detachment could begin. We’ll see how it goes.

Dems sweep Harris County

Hillary Clinton had a 100K lead in early voting in Harris County, and increased her lead as the night went on. The only countywide Republican who was leading early on was Mike Sullivan, but later in the evening, at the time when 80% of the Election Day vote was in, Ann Harris Bennett caught and passed him. Kim Ogg and Ed Gonzalez won easily, Vince Ryan was re-elected easily, and all Democratic judicial candidates won.

The HISD recapture referendum went down big, the Heights referendum to update the dry ordinance won, and Anne Sung will face John Luman in a runoff for HISD VII. Statewide, Clinton was trailing by about nine points, and with a ton of precincts still out was already at President Obama’s vote level from 2012. Dems appear to have picked up several State House seats, though not the SBOE seat or CD23. Clinton also carried Fort Bend County, though she had no coattails, and Commissioner Richard Morrison unfortunately lost.

I’m too stunned by what happened nationally to have anything else to say at this time. I’ll be back when I recover.

Races I’ll be watching today, non-Legislative edition

vote-button

This is my companion to yesterday’s piece.

1. SBOE district 5

I’ve discussed the SBOE races before. This particular race, between incumbent Ken Mercer and repeat challenger Rebecca Bell-Metereau, is the one that has the closest spread based on past performance, and thus is the most likely to flip. If it does flip, it would not only have a significant effect on the SBOE, which would go from 10-5 Republican to 9-6, with one of the more noxious members getting ousted, it would also cause a bit of a tremor in that this was not really on anyone’s radar going into 2016. Redistricting is supposed to be destiny, based on long-established voting patterns. If those patterns don’t hold any more, that’s a big effing deal.

2. Appeals courts

I’ve also talked about this. The five courts of interest are the First, Fourth, Fifth, 13th, and 14th Courts of Appeals, and there are multiple benches available to win. I honestly have no idea if having more Democrats on these benches will have a similar effect as having more Democrats on the various federal appellate benches, especially given that the Supreme Court and CCA will most likely remain more or less as they are – I would love to hear from the lawyers out there about this – but I do know that having more Dems on these benches means having more experienced and credible candidates available to run for the Supreme Court and CCA, and also having more such candidates available for elevation to federal benches. Building up the political bench is a big deal.

3. Edwards County Sheriff’s race

Jon Harris is an experienced Democratic lawman running for Sheriff against a wacko extremist in a very Republican county, though one with a small number of voters. This one is about sanity more than anything else.

4. Waller County Sheriff’s race

I’ll be honest, I didn’t have this one on my radar until I read this Trib story about the race, in which the recent death of Sandra Bland is a factor. Waller County went 53-46 for McCain over Obama in 2008, though the Sheriff’s race that featured a problematic Republican was a lot closer. It was 58-41 for Romney, which is close to what it was statewide. Democratic challenger Cedric Watson will have to outperfom the countywide base to defeat incumbent Glenn Smith, it’s mostly a matter of by how much he’ll have to outperform.

5. Harris County Department of Education, Precinct 2

There aren’t any at large HCDE Trustee positions up for election this year, so I haven’t paid much attention to them. This race is interesting for two reasons. One, the Democratic candidate is Sherrie Matula, who is exceptionally qualified and who ran a couple of honorable races for HD129 in 2008 and 2010. And two, this is Jack Morman’s Commissioner’s Court precinct. A win by Matula might serve as a catalyst for a strong candidate (*cough* *cough* Adrian Garcia *cough* *cough*) to run against Morman in 2018.

6. HISD District VII special election

You know this one. It’s Democrat Anne Sung versus two credible Republicans and one non-entity who hasn’t bothered to do anything other than have a few signs put up around town. One key to this race is that it’s the only one that will go to a runoff if no one reaches 50% plus one. Needless to say, the conditions for a December runoff would be very different than the conditions are today.

7. HISD recapture and Heights dry referenda

I don’t think any explanation is needed for these.

What non-legislative races are on your watch list for today?

BOMA for recapture

A group that represents property owners who would be directly affected if the recapture vote goes down and detachment results has endorsed a Yes vote on the recapture referendum.

BagOfMoney

A local trade association for commercial property owners has come out in favor of a controversial vote that would send millions of local tax dollars to the state to be distributed among poorer school districts.

The local chapter of the Building Owners & Managers Association warned this week that rejecting the so-called recapture measure could saddle some of the city’s premier commercial properties with higher tax bills and make them less competitive. BOMA’s local head says there are simply too many unknowns.

“It’s a huge concern for commercial real estate,” chapter CEO Tammy Betancourt said.

[…]

On Nov. 8, voters will be asked to authorize the coming recapture payment. But Houston Mayor Sylvester Turner has called on voters to reject the measure in hope lawmakers will make meaningful changes to the school funding system during next year’s legislative session.

That’s a gamble Betancourt does not want to take. If the recapture is turned down, the most valuable properties within HISD’s boundaries would be reassigned to another, as-yet-undetermined district for property tax purposes. Depending on the rates in the recipient district, owners could see their already soaring tax bills rise even more.

That could affect scores of high-profile properties, including downtown’s Houston Center, Pennzoil Place and Chase Tower. Betancourt said some owners could face an unfair competitive advantage if they are paying a different tax rate than their neighbor.

“It puts the whole market into question,” she said.

Moreover, the ballot measure does not appear to be widely understood.

“It seems like the bulk of the people aren’t aware of the issue,” said Brett Williams, director of property management for Houston-based PM Realty Group, which owns and manages commercial properties. “This kind of came out of nowhere for us three or four weeks ago.”

Well, I’d say the first time people started paying attention to this was about a month ago when the Chron first urged a No vote on the referendum, so to that extent this has snuck up on them. The HISD Board voted to put the measure on the ballot in August and three members of the Board were speaking out against it in early September, so it was possible to see some of this coming before then, though I doubt anyone would have expected this level of interest or antipathy. It’s a tough position for them to be in, but that’s part of the logic that underpins the No-vote advocacy – detachment is such a bad option and property owners will hate it so much that it will increase the pressure on the Lege to Do Something about it. We’ll see if they can gain any traction or if they’ll wind up playing the role in Austin that has been envisioned for them by referendum opponents.

Still talking about recapture

This Chron story from Monday adds a bit more to the recapture discussion.

BagOfMoney

As one Houston school board member sees it, the district’s November ballot measure regarding the state-mandated forfeiture of local tax dollars offers no good choice for voters.

“Do you want to be shot in the head or stabbed in the back? Both are not pleasant,” trustee Mike Lunceford said of the options.

The Houston Independent School District has been deemed so property wealthy that for the first time it must forfeit local property tax revenue – an estimated $162 million next year – to the state to help fund poorer districts. By Texas law, however, the district first needs voter approval to send away the money. The Houston district’s estimated recapture payment is expected to increase to $257 million in 2018 and to top $1 billion over four years.

The idea of willingly giving local property tax dollars to the state, especially when three-quarters of HISD students come from low-income families, is unacceptable to Mayor Sylvester Turner and other leaders who are urging voters to oppose the Nov. 8 ballot measure. The opposition strategy is an admitted gamble that lawmakers will be persuaded to revamp the state’s school-funding system in the 2017 legislative session.

“The Legislature moves when its back is up against the wall, especially on big issues,” Turner, a former legislator, said this week.

The bet, of course, may not pay off. For one, Lt. Gov. Dan Patrick, a Republican from Houston, does not support the opposition’s approach.

“If the HISD board doesn’t like the current school-finance system, they should come to Austin to work constructively to change it,” Allen Blakemore, a spokesman for Patrick, said in a statement to the Houston Chronicle. “Instead they lead their voters to make a political statement at a significant cost to the taxpayer.”

[…]

Turner has criticized the ballot language as misleading and suggested it could be challenged in court, just as the city was sued in 2015 over its measure concerning term limits. He added that “any half-way decent attorney” could sue on behalf of commercial property owners if their property was sent to another school district. Campaign advertising urging opposition to the ballot measure states that the proposition “is about shutting down neighborhood schools.”

The Houston district has not released how much money it would have to cut from the budget in future years because of recapture.

“We have to make the natural assumption that some of the schools are going to close, some of the programs are going to go away,” said Jeri Brooks, spokeswoman for the vote “against” campaign.

The state never has had to resort to property detachment for taxing purposes. Galveston voters rejected that district’s recapture proposition several years ago, then approved it in a future election.

The Houston school district could hold another election in May – five months into the legislative session – if necessary.

First, let’s be very clear that the suggestion from Dan Patrick’s office that the HISD board “should come to Austin to work constructively to change” the school finance system is risible. Putting aside the fact that Patrick is obsessed with vouchers and bathrooms, it will be a cold day in August before he lifts a finger to help HISD in any way. To the extent that the “no on recapture” crowd has any hope, it’s that they will inspire people around the state to put pressure on their Reps and Senators to Do Something, to which obstructers like Dan Patrick will have to accede. It’s a triple bank shot with a combo to sink the eight ball, but at least it’s a plan, and it recognizes that nothing will happen without external pressure.

The bit about Galveston and possibly having an electoral do-over is very interesting and something that I had not seen or heard before. I’d like to see some confirmation of that, because if HISD could re-vote once it becomes clear that the Lege isn’t going to do squat, then that changes the calculus.

As for Mayor Turner’s claim about the ballot language, all irony aside the language is mandated by the same law that mandates recapture. That was one of the things I discussed with David Thompson in my interview with him, because the language seemed so weird to me. That doesn’t mean it couldn’t be struck down – it is very clear by now that the Supreme Court respects the local electoral process only when it feels like it – but it should be noted that this language didn’t come from nowhere.

It’s important to remember that where all of this comes from is the Legislature.

The state of Texas might well spend less on public education in the next budget than in the current one thanks to increasing local school property taxes.

School financing works like a waterbed: Push down on one side and the other side rises. Raise the local share of spending and the state doesn’t have to spend as much.

In Texas, property values are up. With them, revenue from property taxes is rising. For a given level of state spending, that means the locals are paying more and the state doesn’t have to spend as much.

That means, in turn, that state lawmakers don’t have to sweat rising costs like the locals do. And it frees some of those state lawmakers to holler at the locals for rising taxes even as those higher local revenues help the state skate through a tough budget.

[…]

According to the Legislative Budget Board, state aid for education rose to $19.59 billion for this fiscal year from $18.24 billion in 2008. That’s an increase of 7.4 percent. But local revenue — generated by property taxes — rose to $26.25 billion this fiscal year from $18.2 billion in 2008, an increase of 44.2 percent.

Ten years ago, the state and local share of the cost of public education in Texas was virtually even — around 44.8 percent each. Federal money accounted for 10.3 percent. Now the locals pay 51.5 percent of the total, the state pays 43.6 percent and the federal government covers the remaining 13.8 percent, according to the LBB’s 2016-17 Fiscal Size-Up.

Rising costs have fallen disproportionately on local districts over the past 10 years. Local property tax bills have risen accordingly, and now state lawmakers are stirred up, promising to somehow get a leash on behalf of those taxpayers.

Here’s another funny statistic from that same LBB report. The number of students attending Texas public schools on the average day has risen 16.8 percent over the past decade, to over 5 million. In 2008, each kid cost the locals $4,219 per year. The state’s cost was $4,226. The feds paid $970, for a grand total of $9,415.

The grand total is now $10,111 — up $696 from 2008. The feds pay $1,015. The locals pay $5,209 — almost $1,000 more per student than they were paying a year ago. And the state? It pays $3,887 per student, or $339 less than it was paying 10 years ago.

Fixing this problem really does start with the Legislature, plus the recognition that if we want something done right, it will not be cheap. However you vote on the recapture referendum, keep that in mind and be sure to only support candidates in 2018 and beyond who understand and are willing to address that reality.

Hochberg speaks on recapture

We should listen and at least consider what he’s saying.

Scott Hochberg

Scott Hochberg

HISD loses the recapture money, one way or another, even if it doesn’t actually write a check.

And the state gets its money one way or another, because the taxes from the removed properties will go to a poorer district in Harris County, letting the state reduce its funding to that district.

But here’s the thing: If HISD writes a check to the state, it loses only the amount of the check. But, if the district gives up taxable property, it loses the recapture amount, plus all the bond taxes the district would have collected off that property.

That means the tax rate we all pay for bond payments, now and in the future, has to go up to make up for the taxes lost from the lost property.

And, once the property is gone, it’s gone forever. No take backs or fingers crossed.

State law actually favors districts that send cash. There’s an “early decision” discount available for those districts. A no vote means we pay the full price.

Voting no is like giving away your garage to avoid paying property taxes on your house. That’s why no district in the state has ever chosen the option of having property removed instead of sending a check. It’s a bad deal.

The argument for voting no is that it will “send a message” to the legislature that it needs to fix the school funding system, and the legislature will obey. Maybe, but I served 20 years in the Texas Legislature working on these issues, and I don’t buy it. It’s not a bet I would make, much less risk HISD taxpayers’ money on.

Hochberg isn’t saying anything we haven’t heard before, but because he’s Scott Hochberg, who knows more about school finance than anyone else in the state, we have to take it seriously. To a large degree, this comes down to how much of a chance you think there is that the Lege will take positive action after a No vote. (On that note, a small bit of dissent to what Hochberg says: If you do believe that the Lege could take positive action, you can also believe they’ll do something about how detachment works as well. It may well be crazy to believe this, but if you’re going to believe it you may as well be all in.) I maintain there is no “good” answer on this, and Hochberg is clear about the many shortcomings of the school finance system, which he worked hard and long to improve. It’s a question of what is less bad. Hochbeg’s case for a Yes vote on the recapture referendum is a strong one. Other people whom I respect make a strong case for No. Do what you think is least bad.