HISD’s 2017 state legislative agenda included finance, educational equity and local control and governance. Read below for a summary of how HISD fared after the 2017 session in Austin, where HISD’s government relations staff was stationed to support the district’s priorities.

Finance

Until the end of session, HISD’s board, superintendent, finance and government relations staff fought hard for a solution that would lower the district’s recapture obligation for the next two school years.  Unfortunately, by the end of session, the school finance bill died and the state’s budget continued the state’s practice of shifting more of its constitutional obligation to fund public education to local taxpayers.  The state’s declining contribution to public education is a result of its over-reliance on local property taxes, or recapture, to fund schools.

Per state law, HISD is property-wealthy and must pay recapture to the state.  An election was held May 6 asking voters how they wanted HISD to pay its recapture obligation – write a check to the state comprised of local property taxes or pay by losing a portion of the district’s commercial tax base to another school district.  The May election was the second time this question was put before the voters. The ballot measure known as Proposition 1 prevailed with over 60% of the voters wanting HISD to write a check to pay its recapture obligation.  HISD’s payment for this year is $83 million, and the payment will grow in future years as property values rise.

HISD’s recapture situation proves the school finance system is broken. With state revenues down, the 2017 legislative session was not the time for school finance reform. The House and Senate were at odds on almost every issue this session, and school finance was no exception. Speaker Joe Straus made school finance reform and reducing recapture a high priority. On April 20, the House passed HB 21, a school finance bill championed by House Public Education Chair Dan Huberty, which reduced HISD’s recapture obligation for the next two years and provided meaningful financial relief to school districts statewide. However, the bill came with a $1.9 billion price tag and deferred a payment to the Foundation School Program – two components the Senate disliked. For weeks, HISD’s board and superintendent continued to urge Senators to pass the House version of HB 21 because it helped the majority of students statewide and reduced recapture.

The Senate gave HB 21 a public hearing on May 11 and offered is own version, or committee substitute, which reduced the overall funding from $1.9 billion to about $530 million and added a voucher program for special needs students.  The Senate also removed the deferred payment. During the hearing, school advocates registered to testify immediately changed their position from “support” to “against.”  School choice, or vouchers, was one of Lt. Gov. Dan Patrick’s top priorities this session, and the Senate believed parents have a right to choose the educational environment best for their child: public or private. Many school advocates believed adding special education vouchers to HB 21 killed the bill.  An explanation of HB 21 as it passed the House and the Senate is below. The bill died because the House and Senate could not reach an agreement before the May 27 deadline.

HB 21 by Rep. Dan Huberty (R-Humble) spent $1.9 billion overall:

• Reduced recapture payments for ISDs statewide
• Increased the basic allotment per student from $5,140 to $5,350
• Allowed recapture-paying districts like HISD to receive the transportation allotment
• Established a $159 million financial hardship grant for districts losing targeted revenue assistance (ASATR)
• Helped small, rural schools by phasing-in elimination of the small school district allotment
• Increased the bilingual education weight from 0.10 to 0.11
• Created a new funding weight for dyslexic students

CSHB 21 by Sen. Larry Taylor (R-Friendswood) spent $530 million overall:

• Increased recapture payments for ISDs statewide
• Did NOT increase the basic allotment – it remained flat (at $5,140 per student)
• Established an Education Savings Account (ESA) or voucher program for special needs students
• Helped small, rural schools by phasing-in elimination of the small school district allotment
• Established a financial hardship grant of $150 million for districts losing targeted revenue assistance (ASATR), but limited districts being able to receive support
• Included $20 million for an Autism Grant program
• Allocated $100 million for facilities with half going to charter schools and the other half to the Existing Debt Allotment for school districts
• Created a state-appointed Commission on Public School Finance that would make recommendations on how to improve the current system

The following finance-related bills were supported by the district but died during the legislative process:

• HB 1037 (Capriglione) and SB 358 (Watson): Allow recapture-paying school districts like HISD to receive their transportation allotment from the state. The intent of these bills was incorporated in the House version of HB 21
• HB 1059 (Murphy) and SB 1247 (Huffman): Trigger a reattachment process for detached properties, which is currently missing from the statute.  HISD and Houston’s business community supported HB 1059 in committee and the bill was left pending. SB 1247 did not receive a public hearing
• HB 1324 (S. Thompson): Recognize half of the local homestead exemption in school finance formulas and remove a financial penalty for school districts. It lowers recapture, as well. The bill was a pre-filed amendment to HB 21, but was withdrawn
• HB 1326 (S. Thompson): Count students enrolled in full-day pre-K in a school district’s recapture calculation only. Also, lowers recapture payments
• HB 1838 (Meyer): Institute a recapture limit tied to inflation
• HB 3375 (S. Thompson): Tie new local property value growth to the equalized wealth level, which is a good thing for schools. The bill passed as an amendment to HB 21, but HB 21 died.
• HB 3795 (Dutton): Allow recapture-paying districts to count charter school students zoned to their district in recapture calculations, which will lower recapture payments also. HB 3795 had a public hearing and was left pending. HISD expressed appreciation to Rep. Dutton for starting the conversation around the impact of charter schools on school districts. 

Educational Equity

The district believes one of the best ways to improve equity among students is to educate students in a 21^st-century learning environment equipped with the latest technology and Internet access at home and school. Digital resources are essential for students to feel prepared for post-secondary opportunities and life-long careers.

The final state budget invests $25 the million in the E-Rate program, which will improve Internet access for public schools statewide.  This $25 million investment triggers a federal match of $250 million to the state.  As a national trendsetter in digital learning, HISD worked with the state before and during the legislative session to make sure funds were appropriated for the biennium.

Local Control & Governance

Bills were filed this session to regulate school boards and school districts; however, most died.  Some of the bills the district fought – like the bathroom bill – will return during the special session, which starts on July 18, 2017 and will last up to 30 days.

HISD worked diligently this session to protect local control.  School districts need the flexibility to innovate and make decisions that are best for their students and families.  The local control topics debated this session include bathroom usage, sanctuary cities, school board governance, school bond elections, and taxation.

Bathroom bill

The bathroom bill discussion dominated a large portion of the session.  The Senate passed, SB 6 by Sen.Lois Kolkhorst (R-Brenham), which required people to use the restroom of their biological sex and would apply to all public facilities.  HISD opposed SB 6, and an HISD trustee delivered the testimony.  The House filed HB 2899 by Rep. Ron Simmons (R-Carrollton), a different approach to the bathroom conversation that prohibited local governments from enacting ordinances that protect certain groups of people from discrimination beyond those groups protected under state law.  HB 2899 nullified any existing local orders, ordinances, or other measures that establish such protections.  HISD opposed HB 2899, too, with a letter from an HISD trustee. In the final weeks of session, the Legislature limited the bathroom discussion to schools.  The House added schools-only language to a school safety bill, SB 2078.  The House amendment codified existing practice at the campus level and would allow schools to continue to accommodate students with unique needs.  The amendment would also allow the Texas attorney general to protect a school district if a lawsuit was filed.

Lt. Gov. Dan Patrick and Senate Education Committee Chair Larry Taylor stated publicly that the House amendment did not go far enough.  Patrick said he would ask the governor to call a special session, if the bathroom bill the Senate passed died during the regular session.  Patrick sees it as an issue of privacy and safety for women and girls.  The speaker responded that the House handled the bathroom issue responsibly and expressed his frustration that the Senate should have been more focused on school finance than bathrooms.  After a series of dueling press conferences between the House and Senate, the bathroom issue was punted to Gov. Abbott, who added the House’s version of the bathroom bill to the special session agenda.

Sanctuary cities

Banning sanctuary cities was a top priority for statewide leaders, and SB 4 was signed into law requiring local law enforcement to check the immigration status of individuals they detain or arrest. The bill exempts schools, but still has major implications for students and families.  HISD’s board, superintendent, and schools will continue to reassure families that our schools are safe places for students, and no student will face deportation while at school.

School board governance

Regarding school board governance, Sen. Lois Kolkhorst (R-Brenham) authored SB 1566.  According to the author, the bill’s legislative intent is to empower school boards to focus on student outcomes and provide them with effective tools and training.  The bill allows the board to compel the superintendent’s direct reports to testify in public hearings and appear in closed session.  The bill requires district staff to respond to board requests for information no later than the 20^th business day upon receipt (30 days if the request is burdensome).  Once SB 1566 passed both chambers, it was a “Christmas tree,” or a bill that has multiple, random bills attached to it.  One of those amendments requires the school nurse to notify parents when a child in the classroom has lice, and another allows school staff who are licensed handgun owners to transport and store firearms in their personal vehicle on school property.

Representative Sarah Davis (R-Houston) filed two governance bills that died.  HB 1150 required school districts to post certain information online every month (academic policies, current finances, board meeting minutes, and all district plans and objectives under consideration by the board).  HB 1152 required the school board to hold a local election when changing the names of schools.

Elections and transparency

About 50 bills related to transparency, ballot language, and elections were filed, all died.  Overall, these so called “transparency” bills were a threat to local control.  Some  required school districts to place prescriptive and detailed information on the ballot for school bond elections, and some required a school board to hold an election to authorize using unspent bond funds on other expenses.  The remaining bills required school districts to hold elections only in November.  Right now, school districts can hold elections in May or November, and tax ratification elections can be held within 90 days after the tax rate is adopted.  The two main bills districts were concerned about were SB 460 and SB 461 by Sen. Eddie Lucio (D-Brownsville).  These two bills passed the Senate, but did not make it out of the House.

Property tax reform

SB 2 by Sen. Paul Bettencourt was the vehicle for property tax reform this session.  The bill capped cities’ and counties’ ability to raise their tax rates.  School districts’ tax rates are already capped.  SB 2 was a priority bill for Lt. Gov. Patrick and the Senate majority, citing Texans’ need for property tax relief.  The Senate also wanted voters to decide what their tax rate should be – this is known as a rollback election.  The House replaced SB 2 with its version of the bill and removed the rollback election provision. Ultimately, SB 2 died at the end of session, and the governor added it to the special session agenda in July.