Legislators seek solutions to limit burden on taxpayers

Legislators seek solutions to limit burden on taxpayersA compromise on the public school funding formula and inaction on property tax reform left some local legislators, school districts and public education advocates disappointed that a bigger overhaul could not be achieved during a special session of the state Legislature this summer.   

When the Texas House of Representatives passed House Bill 21 on Aug. 4, it included $1.8 billion in additional funding for school districts, including millions of additional money for Humble and New Caney ISDs. However, the Senate’s version of the bill removed about $1.5 billion of the bill’s funding.

The House accepted the concessions on the bill, and it was signed by Gov. Greg Abbott on Aug. 16.

“We’ve already done our budget for this biennium, and $1.8 billion is just not doable at this time,” said state Sen. Larry Taylor, R-Friendswood, the chairman of the Senate Committee on Education.

Meanwhile, property tax reform died on the final day of the session after the House and Senate failed to reach a compromise on Senate Bill 1, which would have required voter approval for a city or county to increase property tax revenue by more than 4 percent in a given year.

State Rep. Harold Dutton, R-Houston, said public education funding and property tax reform are inextricably connected, with as much as 50 percent of property tax bills—between $20 billion and $25 billion annually—going to school districts for the maintenance, operations and debt service of school districts, according to state data.

“The state has to increase its funding [for public schools] to help taxpayers,” said Dutton, who serves on the House Public Education Committee. “Now you’ve got added pressure on financing public schools.”

Legislators seek solutions to limit burden on taxpayersFunding formula

As property values continue to rise across Texas, school districts receive more property tax revenue each year even if tax rates remain the same, state lawmakers said.

However, the state’s share of public school funding has decreased from
46 percent for an average public school district in 2012 to 41 percent for an average district in 2017 as the local contribution from taxpayers has increased, according to the Austin-based Center for Public Policy Priorities.

Taylor said he believes the school funding formula is so complex that increases in state funding do not lead to an equitable distribution.

The state contributed more than
$24 billion to education funding for the 2015-16 school year, an 82 percent increase from 2005, Taylor said. 

Since 2011, when the Great Recession led to budget cuts, Taylor said, “we have replenished that money. We’re spending more money on top of it, but due to the complexity of the system, we have 20 percent of districts below the funding level we had in 2011.”

Property tax reform

Since school taxes account for 46 percent of the average property tax bill in Montgomery County, any property tax relief local officials are able to provide is felt little by the average taxpayer, Montgomery County Precinct 2 Commissioner Charlie Riley said.

However, without taxing residents at the highest rate allowed by law, some districts may not receive sufficient funding to operate, HISD Chief Financial Officer Mike Seale said.

Both HISD and NCISD have maintenance and operation tax rates set at $1.17 per $100 valuation—the highest amount allowed by the state.

“When property [values] go up, it doesn’t really impact how much school districts receive; it impacts how little the state has to put into the system,” Seale said.

Officials agree school taxes are often the largest portion of a resident’s property tax bill; however, they are divided on how to provide taxpayer relief.

Sen. Paul Bettencourt, R-Houston, the author of SB 1 and member of the senate’s finance and education committees, said the state already spends more than half of its budget on public and higher education.

He said he believes tax reform is more pressing as municipal tax rates are increasing faster than the public school portion of a tax bill.

“From 2005-15, tax levy revenue for taxing entities other than school districts has grown two times faster than ISD tax levy revenue,” he said. “The data shows what Texans already know: property taxes are rising too quickly.”

Legislative efforts

SB 1 failed to get passed by the House during the Legislature’s special session that ended in August. HB 21 did pass this session, but experts said it provides little relief to public schools or taxpayers.

It provides more than $300 million in additional state funding to schools throughout the next biennium.

Funds are divided between charter schools, property-poor districts, geographically small districts, health care for retired teachers and grant programs for autistic and dyslexic students, said Chandra Villanueva, a senior policy analyst at the CPPP.

HISD will receive an additional halfmillion dollars this biennium because of the passage of HB 21, Seale said. However, the version authored by state Rep. Dan Huberty, R-Houston, would have provided $1.5 million, Seale said.

The pared down version of HB 21 will affect fast-growth districts, such as HISD and NCISD, more harshly said Guy Sconzo, executive director of the Fast Growth Schools Coalition, which lobbies for districts with growing populations in the state legislature.

“Fast-growth districts can’t wait another two years,” Sconzo said. “They can’t put growth on hold.”

The bill also creates a commission to study school finance and find a long-term solution to the problem, Taylor said. The committee will include Taylor and Huberty, the House Public Education Committee chairman. He also represents a part of the Lake Houston area.

Huberty declined to comment for this story.

Local challenges

Although taxable values have steadily increased for NCISD and HISD, district officials said inadequate state funding challenges district objectives.

Both HISD and NCISD are considered fast-growing districts in terms of student population growth, which requires them to incur more debt through bond referendums while building facilities.

HISD’s student population is projected to increase by nearly 10,000 over the next decade, according to projections by demographics firm Population and Survey Analysts. New Caney ISD is in the process of building two new schools approved by voters as part of a $173 million bond referendum in 2015.

NCISD Superintendent Kenn Franklin said the state’s funding formula for new facilities needs to be adjusted.

“Many school districts, including New Caney ISD, have urged the Legislature to establish an adequate, equitable funding system that accurately reflects the cost of education based on the needs of the student population being served,” said Scott Powers, NCISD executive director for public relations.


key in door lock
Evictions continue in Houston as new measures aim to stem tide

Over 32,000 eviction cases were filed in Harris County courts in 2020.

Houston City Hall in rainbow lighting
Greater Houston LGBT Chamber of Commerce celebrates five years of service

The organization is open to all and serves members throughout the Greater Houston area.

Montgomery County is set to receive its largest first-dose allocation during the week of March 1. (Ali Linan/Community Impact Newspaper)
Montgomery County set to receive largest vaccine allocation yet in first week of March

Nearly 20,000 vaccine doses were allocated to the county's two vaccine hubs and several additional providers for the week of March 1.

A coronavirus vaccine is given at Memorial Hermann's mass vaccine clinic Feb. 26. (Andrew Christman/Community Impact Newspaper)
Memorial Hermann closes out 2nd round of vaccines with 7,000 distributed among 2 clinics

The clinic will continue operations through 5:30 p.m. Feb. 27.

The new Fort Bend Epicenter multipurpose facility could be used as a spot for trade shows and sporting events, could act as a large-scale shelter for county residents in an emergency and more. (Community Impact Newspaper staff)
Large multipurpose complex coming to Fort Bend County; Sugar Land to widen University Blvd. and more top Houston-area news

Read the top business and community news from the past week from the Houston area.

Snow covers I-45 in Houston during a winter storm that hit Texas the night of Feb. 14. (Shawn Arrajj/Community Impact Newspaper)
Legislators probe energy officials over power failures, lack of preparation heading into winter storm

The Texas Legislature held hearings Feb. 25 with energy companies including Oncor Electric Delivery and the Electric Reliability Council of Texas in response to last week’s historic winter storm, which left millions of Texans without electricity for days.

Humble City Council voted unanimously at the Feb. 25 City Council meeting to appoint Bruce Davidson, left, to fill the vacant Place 3 seat. (Kelly Schafler/Community Impact Newspaper)
Humble City Council appoints Bruce Davidson to fill vacant Place 3

Bruce Davidson, a resident of the Humble area for about 24 years, took his oath of office at the council meeting.

Keith Luechtefeld spoke with Community Impact Newspaper about some of the short-term and long-term repercussions of the storm as well as some of the reasons why so many homes saw burst pipes during the freezing weather. (Community Impact staff)
Q&A: Greater Houston Builders Association President Keith Luechtefeld discusses power, plumbing, frozen pipes after Winter Storm Uri

Keith Luechtefeld spoke with Community Impact Newspaper about some of the short-term and long-term repercussions of the storm as well as some of the reasons why so many homes saw burst pipes during the freezing weather.

Kalera will open a vertical farming facility in Humble in late spring or early summer. (Courtesy Kalera)
Kalera seeks horticulturists for new vertical farming facility in Humble

The company will open its biggest vertical hydroponic farm yet in late spring or early summer.

Winter Storm Uri led to closures across the Greater Houston area during the third week of February. (Courtesy Metropolitan Transit Authority of Harris County)
‘It’s been a rough year for us’: Expert explains economic effects of winter storm, ongoing pandemic in Houston region

“It's been a rough year for us economically; it's been a rough year for us public health wise. It's just been a rough year for us psychologically—first the coronavirus and then the freeze," said Patrick Jankowski, senior vice president of research with the Greater Houston Partnership.

Humble ISD and New Caney ISD have seen sharp decreases in their respective active case counts as of Feb. 25. (Community Impact staff)
Humble, New Caney ISDs see drops in active case counts due to shutdowns

Both school districts were closed last week due to winter weather and school breaks, which limited the numbers of active cases reported.