TEA will now recognize half of the local homestead exemption in recapture calculations for districts statewide. HISD voters could stop detachment of property in July.
The Houston Independent School District Board of Education on Thursday voted to call a May 6 election to ask voters to authorize sending lower recapture payments to the state rather than face detachment of commercial property in July. A May 6 election must be called by Feb. 17. The swift timing allows the district to follow the deadlines set by the state and Harris County.
Previously, HISD’s recapture obligation was estimated at $162 million. Under the Texas Education Agency’s recent announcement of recognizing half of the local homestead exemption, along with adjustments made to student enrollment and property value figures, HISD is now subject to a reduced $77.5 million recapture obligation or the removal of about $8 billion dollars’ worth of non-residential, commercial properties from HISD’s tax roll.
HISD’s Board Trustees Wanda Adams, Rhonda Skillern-Jones, Anna Eastman, Mike Lunceford, and Holly Maria Flynn Vilaseca voted for the approval of election. Trustees Diana Dávila, Jolanda Jones, and Manuel Rodriguez did not vote in favor of the item. Trustee Anne Sung abstained from voting. The ballot item in May, if passed, would stop the detachment and reassignment of commercial property and authorize the district to send lower recapture payments to the state than those earlier projected. If the measure fails, detachment would begin in July of 2017, unless the Legislature takes action before it adjourns on May 29.
Detachment of property could cause tax increases for Houston’s business community, with some businesses paying higher tax rates than their next-door neighbors. In addition, detachment of property could hurt HISD’s ability to pay back bonds, result in further budget cuts, or cause tax increases on remaining property owners.
Due to rising property values, HISD was informed in 2015 that it was subject to recapture for the first time. In November, voters declined to authorize HISD to send $162 million in local property taxes to the state of Texas.
HISD’s school board, superintendent, and legislative team will continue to push for additional financial relief at the state level. With a vast majority of students coming from low-income families, the district is committed to making sure its 215,000 students and 287 campuses have the resources they need to be successful. Addressing HISD’s recapture issue will continue to be the district’s top priority this legislative session.
“HISD would like to sincerely thank Commissioner Mike Morath and our state lawmakers for hearing our concerns surrounding school finance. There is still much work to be done, and we look forward to working with the state this session,” said HISD Board President Wanda Adams. “We will continue to push for an equitable and high-quality state school finance system that does not over-rely on local property tax dollars to fund public education statewide.”