Houston ISD was able to avoid a recapture payment for the first time in three years. Texas’ largest school district was paying about $300 million to the state.
The payment was part of the tax revenue redistribution plan, which takes revenue from property-rich districts and gives it to poorer districts.
HISD was deemed a “property-rich district” in 2016, a distinction the district’s board resisted at the time. The lack of a recapture payment means that the district won’t face a funding shortfall when it undertakes a state-mandated property tax cut this year.
The tax cut was part of the property tax reform and school finance bills passed earlier this year. The cuts are intended to give property owners relief from school taxes, which make up roughly one-half of each year’s tax bill.
Property owners in HISD have seen the taxable value increase by about 7 percent per year. The district will trim its property tax rate from $1.2067 to $1.1367 per $100 valuation.
In previous years, a nearly 6 percent reduction in revenue generation would have created a massive hole in HISD’s budget. However, the state’s decision to increase per-student pay from $5,180 to $6,160 will put an extra $135 million in the district’s coffers.
HISD will also be able to provide across the board pay increases, 3.5-8 percent for teachers and a $2 per hour boost in the minimum wage for low-paid employees.