Up Close: A look at Proposition 1 and Recapture on the November ballot

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HISD Board President Manuel Rodriguez Jr. sat down recently with Deputy Superintendent and Chief Financial Officer Ken Huewitt to discuss why HISD is subject to sending $162 million in local property taxes to the state this year – and how local voters are being given the option of whether to authorize the payment under Proposition I on the Nov. 8 ballot.

Huewitt explains that the recapture payment is based on a formula – the value of property within the school district divided by the district’s weighted average daily attendance, or WADA. That results in a district’s equalized wealth level. When that number exceeds a level set by state, a district goes into recapture.

In the past, Huewitt says, the Legislature has adjusted the equalized wealth level so HISD would not be required to pay recapture.

“Last session’s adjustment was only enough to keep us out of recapture for one year,” Huewitt says.

Currently, 243 school districts in the state are paying into recapture – the Legislative Budget Board has estimated they will pay $3.8 billion in this biennium.

On the Nov. 8 ballot, voters will be given the option of authorizing HISD’s $162 million recapture payment by voting on Proposition 1. Here is the language that will appear on the ballot:

Authorizing the board of trustees of Houston Independent School District to purchase attendance credits from the state with local tax revenues.

If voters approve the measure, HISD will begin paying $162 million next spring and the district will continue to make annual recapture payments for the foreseeable future — voter approval would no longer be needed to send an estimated $1 billion to the state over the next four years. That revenue would then be redistributed to fund public education in other districts across Texas.

Learn more about Proposition 1 and recapture, search a database of districts in recapture, and find contact information for state representatives at HoustonISD.org/recapture

If voters don’t approve the measure, HISD would then be subject to detachment of about $18 billion worth of commercial property within district borders next July – starting with the most valuable – and those properties would be reassigned to other school districts in Texas, where they will be taxed at those districts’ rates. Once the property is detached, it remains detached.

Huewitt says the Legislature, when it convenes in January, could study the issue and possibly figure out a way to avert or lessen the impact of recapture on HISD.

The $162 million recapture payment has already forced HISD to slash the budget for the coming school year.

“We have had to cut deep within HISD this past budget season – $40 million coming just from our campus budgets,” Huewitt says, adding that those reductions can affect education programs, class sizes, and tutoring.

Rodriguez notes that the Legislature has been sued repeatedly over Texas’ school finance system, “Robin Hood.” In May, the Texas Supreme Court upheld the funding system, saying it met “minimum constitutional standards.” The court also called for lawmakers to implement “top-to-bottom reforms that amount to more than Band-Aid on top of Band-Aid.”

“I would venture to say that the intent of Robin Hood and recapture in the early years … we weren’t the model they were shooting for to be subject to recapture,” said Huewitt. “And I think with HISD being part of this now and other large school districts following shortly after, if this doesn’t change, I think this is probably a wake-up to say maybe we really should take a look at this and hit the pause button for a second and make sure the intended consequences are what was planned.”

Huewitt said $162 million is 8 percent of the district’s budget, and a reduction of that size affects jobs, supplies, and technology and is a setback when trying to “move the needle” for HISD students.

“This is no small hurdle to get over in trying to ensure our students have the best opportunity to learn.”

Rodriguez urged the community to become informed on Proposition 1 and recapture and to vote on Nov. 8. He also urged community members to contact their state representatives to tell them how recapture and Robin Hood are impacting HISD.