HISD Tax Rate Remains Lowest Among 24 Districts in Harris County

The HISD Board of Education on Thursday adopted a 3-cent property tax rate increase. This represents the first such rate increase since 2001. The new property tax rate of $1.1867 per $100 taxable value is nearly 24 cents less than the average Harris County school district – maintaining HISD’s position as having the lowest rate of any district in the region.

The tax rate measure was adopted by a 4-3 vote with trustees Larry Marshall, Paula Harris, Harvin Moore, and Rhonda Skillern-Jones in favor, and trustees Anna Eastman, Michael Lunceford, and Juliet Stipeche opposed.

Because the new tax rate does not cover all of the district’s financial obligations for the current school year, the board also agreed to use $4.9 million in savings from prior years to balance the budget.

In addition to having the lowest tax rate in the county, HISD is among just eight county school districts that grant homeowners an additional 20 percent homestead exemption. As a result, the owner of a $200,000 home in HISD pays hundreds less in taxes than the owner of a home with the same value elsewhere in Harris County.

Harris County school districts with higher tax rates in 2012 than HISD’s 2013 tax rate include: Aldine, Alief, Channelview, Clear Creek, Crosby, Cypress-Fairbanks, Dayton, Deer Park, Galena Park, Goose Creek, Huffman, Humble, Katy, Klein, La Porte, New Caney, Pasadena, Pearland, Sheldon, Spring, Spring Branch, Stafford, and Tomball.

HISD spends less on administrative costs than most other large Texas school districts – having an administrative cost ratio of 4.61 percent, which is less than those reported for Dallas, Austin, and San Antonio, just to name a few.

The rate change largely results from cuts to public education funding that the Texas Legislature imposed in 2011, which cost Houston schools $75 million in 2011 and a total of $122 million in 2012. In the first year of those cuts, HISD balanced the budget by cutting expenses, resulting in layoffs in central administration and in schools.

In 2012, rather than imposing further cuts on schools, the HISD Board of Education agreed to address the remaining deficit though the use of one-time federal money, and by dipping into savings. The district also reduced the amount of general fund money that is normally transferred to the district’s debt service fund to help repay loans at a faster rate than is required.