At least once a day, I find myself in a conversation about Texas Public School Finance. This is not entirely unexpected considering I serve as a school board trustee for the Houston Independent School District. This year’s debate however is more complex and vexing than the usual fights over funding cuts. Now when I strike up a conversation with a neighbor out for a walk on my block, in the grocery line or at a local restaurant the topic is RECAPTURE! “What is it? Why are we being asked to vote again when there was such a strong message to vote NO last fall? We don’t want to be in recapture! Our kids and schools need more funding!”
Simply, an independent school district in Texas goes into “recapture” and becomes a Chapter 41 or “Robin Hood”district when the ratio of the district’s property values as compared to the students enrolled in that district rise above the wealth level the state has determined is sufficient to fund those students’ education. We can vote to either “purchase attendance credits” to swap dollars for kids who aren’t attending our schools and bring us into line with that wealth level per child, or have the state detach commercial properties from our tax base and add those properties’ revenues to another district with lower property wealth.
When we purchase attendance credits we only pay for the maintenance and operations expenses which fund teachers, administration and other student services in the district. When the state detaches property we pay for those things by diverting the tax revenue from those properties to the receiving district. We also lose the ability to raise interest and sinking taxes on those properties, which we use to pay our bond debts and other facility costs.
We did just vote on this issue a few months ago, but we find ourselves with a different set of circumstances today. Last fall, we were expecting to pay $162 million dollars in recapture this year, either through a check or by detaching property with values that could generate that revenue. As of today, that amount has been lowered to about $77.5 million due to a reinterpretation by the Commissioner of Education of the way your local homestead exemption is calculated in the finance formula. The amount was also affected by our final property valuation from 2015 and student enrollment numbers. This point is critical because it highlights that the recapture amounts fluctuate and the amount we may be required to send in by check can decrease, but if the property is detached that (rather large) revenue stream is lost forever.
Most of us believe that the finance system as it stands today is broken on multiple levels. First and foremost, your Robin Hood dollars do not increase the overall pot of money distributed to schools – whether paid by the purchase of attendance credits or through detachment. Rather, the state lowers the amount it is contributing to the effort to equalize funding for all kids, and places those dollars in the general revenue fund, not for public education. We also know that the weights given for English language learners, low income and at risk children have not been revised in three decades. The system must be fixed to ensure that Texas schoolchildren are receiving appropriate funding for their education.
But, in the meantime, Houston ISD should not willingly give away our largest revenue streams to other districts. As values rise, more property will be detached, and we will be left with homeowners carrying all of the load. Businesses who are at risk of paying a higher tax rate than their neighbor are likely to relocate or not choose us at all. Please vote YES! To purchase attendance credits on May 6.