This will be weird.
Because of the state’s byzantine financing system, HISD will have to either send almost $162 million in local taxpayers’ money to the state or stand by to see some of the district’s most valuable properties assigned to other school districts by the Texas Education Agency. (Local businesses aren’t too wild about the idea either; HISD has some of the lowest tax rates around.)
In addition, as trustee Mike Lunceford pointed out, losing those properties would just pile on the debt for HISD taxpayers. “We have bonds we have sold based on some of those assets, and [without them] we’re going to have to raise taxes again,” he said.
The board could decide to do nothing and hope it could lobby the upcoming session of the Legislature to change its mind — although attempts to change the school financing system in this state have failed for years — but as Lunceford put it: “If we vote it down, we’re betting that the Legislature will do something right.”
The other sticking point was that if trustees don’t adopt one of the options offered by state law, they can’t set a tax rate. The only way to get the measure before voters was for trustees to vote to send the money to the state, which gives taxpayers a chance to say yes or no to that in the general election on November 8.
So after much gnashing of teeth that the state could do this to a district that has so many kids on free- or reduced-price lunches, school board members passed the measure on a 6-0 vote (by that time three trustees had left) calling for voters to decide the issue. The measure, with admittedly confusing language (set by the state), asks voters to give the district permission to purchase $162 million in tax credits from the state. As trustee Greg Meyers pointed out, the word “credits” sounds great and voters may completely misinterpret what they’re being asked to do.
See here, here, and here for some background. This Chron story from last week adds some details.
If voters say “no” to sending money to the state, the Texas education commissioner then has the power to detach the Houston Independent School District’s highest-value properties and to assign them to property-poor districts. That means the owners of these properties – likely downtown high-rises – would be paying taxes to another school district.
The detachment, however, would not be immediate. The commissioner’s actions would not take effect until July 3, 2017, according to a timeline spelled out in a Texas Education Agency manual.
The Houston school board’s attorney, David Thompson, said during a board meeting Monday that the state Legislature reconvenes in January, before the education commissioner would act. That timeline would give lawmakers the opportunity to adjust the school-finance system if they wanted to do so, Thompson said.
[…]
The district would have to start paying the state in February, if voters approve the recapture measure.
Houston-area districts that paid recapture last year include Galveston, Spring Branch, Deer Park and Sheldon. Galveston ISD paid the most among those, totaling $12.3 million.
HISD officials argue that while the district has significant property wealth, about three-quarters of the students in the public school system come from low-income families.
HISD board member Greg Meyers called a funding system that punishes the state’s largest district “criminal.”
“You can count on it that I will speak my mind,” Meyers said, adding later that he is conflicted about how people should vote. He said he has “serious angst” about having to send money to the state but is concerned that the district could lose property for taxing purposes to repay bonds if the commissioner is forced to act.
Just remember, this is the Legislature’s fault, with a big assist from our gutless Supreme Court. The thought of doing an interview about this ballot item is already giving me a nosebleed. I can’t wait to see what organizations form to support and/or oppose this.
Keep in mind the Robin Hood recapture law was passed by a Democrat legislature
Would this have any effect on the voting status of people registered at a building “transferred” to another school district? If your address is no longer in HISD, why would you be voting an HISD ballot?
Seems like this is happening because as is mentioned HISD has the “lowest tax rates around”. If HISD taxed at average rates they would better able to make these payments. Taking this example to the extreme, if a district was extremely property rich they could theoretically send their tax rate near zero without the recapture law.
Ross – Sure, at a time when people like Warren Chisum and Rick Perry were serving in the Lege as Democrats. The Lege may have been Democratic, but it was by no means liberal.
Making the “rich” pay their fare share, and wealth redistribution sound like great ideas…..until one day YOU are the one having your wealth redistributed. I’m sure HISD wasn’t losing any sleep over Robin Hood when they weren’t being asked to cough up money. Also, I hate to even mention it again, but…….$ 1.2M renaming schools.
Welcome to the world that my school district has lived in for over 10 years
We are considered property wealthy and send back several million to the state every year while over 70% of our students are considered poor
Now that the states largest district is in the same boat its and issue
@bedmondson, your comment reflects a complete misunderstanding of how Robin Hood works. Raising the tax rate would make no difference here, as HISD would just send all of the excess collected to the State. HISD had been receiving exemptions from Robin Hood due to district demographics. That exemption disappeared in the last Legislature, and the net effect is HISD will have less money to educate students, and will have to send a pile of money to the State for no useful purpose.
@Ross,
You say HISD will have to send a pile of money to the state for no useful purpose. That’s not exactly correct. There are kids in property poor districts who need that money, because their districts can’t or won’t collect enough to educate their kids. Why would you want to deny those other children a decent education? Are those kids less worthy than the HISD kids? It isn’t the other kids’ fault that their parents can’t or don’t want to pay the taxes required to fully pay for their education. Why should they, when the state will just collect the difference from HISD and cover it that way?
It’s really no different than Medicaid, CHIP or ObamaCare. Why should I pay for my own kid’s health care when I can get others to pay, or partially pay it for me?
Bill it may sound communist, but it is because our state constitution requires equal funding for all students. The state could go to an income tax and distribute the money equally to all schools. By that I mean no property tax.
One could always just do away with all public education including subsidizing universities and colleges. Being at the bottom of the education level should make those persons who drag their knuckles when they walk happy.
@Bill, I was responding to a suggestion that HISD just raise the tax rate. Doing that when Robin Hood kicks in doesn’t raise any extra money for HISD, the excess all goes to the state.
Schools should be funded appropriately by the state, not by taking property tax money from one district to give to another.
@Ross:
Yes, I agree, raising the tax rate in a paying district just collects more local money to send off to a recipient district. Everyone sees Robin Hood and just instinctively sees something wrong with it, but no one yet has come up with an acceptable fix.
Schools funded appropriately by the state (let’s just say by income tax) would basically lead to the same outcome as Robin Hood. The taxpayers of wealthy districts would pay more than their share of the money needed to run their local schools and the overage would be redistributed to less affluent districts. It would be the same thing, just not so overt and in-your- face.
Really, this is no different than ObamaCare. Some folks not only will pay full freight for their insurance, but pay extra tax to subsidize others, who will either only pay a part of what their insurance actually costs (via taxpayer subsidy) or pay nothing (via Medicaid). One reason O’Care was so hotly contested was because it was so in-your-face to the full freight payers that they were going to get touched yet again to subsidize others…..again.
That’s Robin Hood.
Bill having had Cadillac type of insurance most of my life, that is also Robin Hood. I paid no taxes on the coverage, as the amount I paid was not taxed.
Life is not fair, but if you don’t like the tax system in this country, find a country to is more to your liking. I don’t think our government stops us from leaving. But I am not aware of any tax system that makes everyone happy.