Houston ISD Proposition: Tax Base [renamed by RefPAC]


Proposition info in the news: http://www.statesman.com/

Reviewer’s Comments

HISD Prop 1

At multiple levels, governments in the U.S. face a tug-of-war between the Emersonian virtue of self-reliance, and the promise of equal protection and opportunities among citizens. In order to promote said equality, you generally have to move surplus value or assets to areas that have less. Such is the case of Texas school funding, via the “Robin Hood” Bill.

It should be apparent to everyone that Texas property values vary widely by location. Downtown Austin property has a higher market value per acre than, say, farmland between Abilene and Amarillo. Since our schools are funded by ad valorem property tax assessments, the money available to school districts rises and falls with the property values and tax rates.

In order to have a reasonably level playing field, Chapter 41 (Equalized Wealth Level) of the Texas Education Code came into being. The net effect of the bill involves the wealthier school districts subsidizing the poorer districts, more or less.

Prop 1 on the ballot for HISD reads as follows: “Authorizing the board of trustees of Houston Independent School District to purchase attendance credits from the state with local tax revenues”.

I haven’t yet found anything to define ‘purchase attendance credits’ so I’ve resorted to checking the current media and position papers to get a read on this. The way I read this, the ballot is asking voters to choose between 1) an outright payment to the state of Texas (and, for what it’s worth, an ongoing annual payment, provided property values continue to rise), to be redistributed among other districts, or 2) allowing the state to detach property from HISD for revenue purposes and assign it to another district’s tax rolls – again, likely an ongoing process as noted in (1).

The overwhelming media push is asking voters to reject the payment and presumably force a showdown with the legislature to re-work school funding, but I’m not so sure that 1) a showdown will occur, or that 2) if it does happen, it will be better than what’s currently in place. Odds are, a few keystrokes in Austin will reassign parcels of land to neighboring districts and everyone goes about their business.

The bottom line is this: HISD is going to lose funds either way. The big question is what we can expect property values to do down the road. If you think we’re in a property value bubble, then it’s probably better to vote ‘yes’, make the payments and keep the property attached to HISD for the long haul especially because getting it re-attached to HISD down the road – from a poorer district – will be difficult, if not impossible. If you don’t see a bubble, then it probably doesn’t matter either way how you vote.

Finally, if you expect the legislature to blink on this matter, then vote ‘no’ – but be aware that the Robin Hood plan was upheld by the Texas Supreme Court in 2005, and in 2010 the state received just over $1 billion from over 300 school districts. Some districts, such as Alamo Heights and Deer Park have been making payments since 1993. As best I can tell, this is about as close as we get to a settled matter.