Early voting is underway in an election that includes a measure critical to HISD students and the community: Proposition 1.
Voters will be asked to decide whether to authorize a payment of $162 million in local property tax dollars from HISD to the state by purchasing “attendance credits.” The Proposition 1 ballot language will read:
Authorizing the board of trustees of Houston Independent School District to purchase attendance credits from the state with local tax revenues.
If voters approve Proposition 1, HISD will begin paying $162 million to the state next spring. The state will use this payment to fund public education in Texas, and the district will continue to make annual recapture payments for the foreseeable future. Voter approval will no longer be required for HISD to send an estimated $257 million in 2017-18; $308 million in 2018-19; and $386 million in 2019-20. That’s more than $1 billion going from HISD to the state in the coming years.
If voters don’t approve Proposition 1, HISD would then be subject to detachment of about $18 billion worth of commercial property within its borders next July – starting with the most valuable. The Texas Education Agency will reassign that property to other school districts in Texas, where it will be taxed at those districts’ rates – which would likely be higher than HISD’s. The district would lose that revenue from the business community, and the local share would possibly increase.
Either way, the Legislature in 2017 could make changes to the school finance system to avert or lessen the impact of the payment.
HISD was required to place this item on the ballot because rising property values in Houston have made the district subject to “recapture.” The $162 million 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 level exceeds what is set by the state, a district is in recapture.
In the past, the Legislature has adjusted the equalized wealth level so HISD would not be required to pay recapture.
In 1993, when the current school funding system – known as “Robin Hood” — began, 32 of the state’s school districts paid about $127 million in recapture dollars. Now, 243 school districts in the state are paying into recapture, and the Legislative Budget Board has estimated they will pay $3.8 billion in this biennium.
HISD is considered “property-wealthy” even though almost 80 percent of its students are economically disadvantaged, and a third are English Language Learners. Deputy Superintendent and Chief Financial Officer Ken Huewitt said in a recent “Up Close” segment that the $162 million recapture payment is 8 percent of the district’s budget, and a reduction of that size affects jobs, supplies, technology and efforts 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.”