As HISD considers increasing the tax base for 2013, following massive deficits in the school budgets, we should not only look at the possibility and importance of properly funding our schools but also where the issues truly stem from. As part of a finance restructuring, Texas’ legislature voted to reduce property tax rates in schools by one third in 2006. This move mandated that any school district that wanted to levy a tax over $1.04 per $100 of property value must hold a “tax ratification election” (TRE) to get it passed. That is exactly what HISD is proposing to do this July. The new proposal in Houston is projected to cost the average tax payer located in the respective jurisdictions an additional $89 annually.
In an effort to reform school taxes even further, Sen. Robert Duncan-R, Chairman of the Senate Education Committee, is planning to file a bill that would result in a statewide property tax rather than a local property tax. This idea has been floated around the legislature for a few years now, by both Duncan and Sen. Steve Ogden in an effort to fix what some in Austin consider a “distribution” issue with Texas State funds. To pass such legislation, however, Duncan will have to convince two-thirds of our legislature as well as the people of Texas to vote in a constitutional amendment. On Feb. 4, Texas’ funding of public schools was ruled unconstitutional by District Judge John Dietz partly because the current funding of our schools is too similar of a statewide tax. Measures proposed by Duncan would change that.
The housing and real estate market grew strong in 2012 and property owners are very likely to see significant increases in their taxable value this year. Even with current legislative restrictions, this may bring some but not enough tax revenue. Much of the tax base comes from residential properties with Homestead Exemptions which allow for a $15,000 and 20% value reduction off taxable property value and caps value increases to 10%.
When compared to the nation, Texas ranked 42nd in school expenditures, however, our districts don’t have the necessary funds to meet the increasing demand. As schools continue to struggle with budget deficits and a low tax base, the question isn’t really if but when the people of HISD will vote “yes” in a tax ratification election. Whether a statewide tax will efficiently correct this problem will be debated when Sen. Duncan presents his bill in Austin.