What was referred to as an olive branch of sorts at last week’s HISD board meeting – the Texas Education Agency’s reduction of HISD’s recapture obligation from $162 million to $77.5 million – was the impetus for the 5-3 vote by the board to call a new special election on the matter in May.
Much of the recapture reduction came from a 50 percent concession of HISD’s 20 percent homestead exemption.
“Take a $100,000 house,” said HISD Trustee Anna Eastman. “Right now Austin calculates our payment on the $100,000, not the exempted $80,000. That makes us wealthier than the actual taxes we pay on the property. Now the TEA will recognize 50 percent of that, so our payment would be on $90,000 instead of $80,000.”
Other adjustments were made to student enrollment and property value figures.
With a new election, Houstonians could basically reverse the no vote of last November and authorize sending the lower recapture payments to the state rather than face the detachment of commercial property, valued now at $8 billion dollars’ worth of non-residential, commercial properties from HISD’s tax roll.
The TEA recently released the list of properties subject to detachment. Number one on the list? The Galleria.
HISD is now subject to recapture because even with 80 percent of HISD’s population classified as economically disadvantaged, the state considers it a property-wealthy district and the “Robin Hood” rule requires that monies must be redistributed to poorer districts.
“There seems to be some confusion with regard to recapture,” said Eastman, who went on record last November against detachment and advocated for a new vote at the board meeting. “We aren’t voting on whether to go into recapture because we already are. We’re voting on the remedy.”
While neither choice is a good one, Eastman believes that with the administrative relief the timing was right to reconsider the recapture payments. She said that there was a 72 day window to put a referendum on the ballot for May, and with a potential yes vote, avoid the detachment which would otherwise begin July 1. Eastman believes that the detachment remedy will end up costing tax payers more than writing a check for recapture payments.
“We also lose the ability to collect our interest in sinking taxes which are used to pay already encumbered bond debt,” she said. “We will have to raise taxes on the rest of our tax base to cover that.”
Trustee Mike Lunsford also voted for a new referendum and said at the board meeting that if the commercial properties were detached, there was no legal way to get them back.
Of the three dissenting votes, Trustee Jolanda Jones was most vocal in her belief that the board should let the earlier ‘no’ vote stand. Jones believes that the pressure of having to work out detachment for the first time will force the legislature to make a real change to the school finance system.
“Can you see the Galleria letting TEA take their property?” she asked.
Jones also said she thinks the special election will draw a much smaller crowd and won’t have the authority that the November vote did.
Trustee Rhonda Skillern-Jones initially was an advocate of the no vote but has reconsidered.
“We called their bluff, [and] they called ours,” she said at the meeting. “We can’t govern if there’s nothing to govern with. We do the best thing we can for our kids.”
“I think that the belief that we have the ‘upper hand’ is misguided,” said Eastman. “What we learned is that if money is added to the budget – and that’s a big if – it won’t be to keep HISD out of recapture.”
Mayor Turner, who in November called on voters to say ‘no’, said in a recent press briefing that he hadn’t seen the new numbers, and hadn’t done due diligence on it yet.
Houston Federation of Teachers President Zeph Capo says his group is not yet convinced this second round of voting is in the best interest of our local community.
“Until the state shows some sign they are willing to do more than talk, I will join more than 60 percent of our community in voting ‘no’ again,” Capo said. “We don’t expect to complete full reform of the school funding system this session, but there must be meaningful movement by the legislature before we will consider a change in our position on recapture.”