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HISD Massive Budget issues

28,564 Views | 201 Replies | Last: 6 yr ago by schmellba99
lunchbox
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94chem said:

So, please help me get this straight. If I own a $400,000 home in HISD, and have 2 children, do I help the district financially or hurt it by sending my kids to private school?

As a follow-up, If it isn't obvious that I'm helping the district, then we have a pretty messed up system

The taxes from the house, of course, go to the district (at least to begin with...see below).

Your kids going to HISD schools would help in 2 ways.

One is that the school would receive funding based on every day your child is in attendance.

The other is that they would count towards overall attendance. Part of the whole recapture mess is that HISD is a property-rich district with an enrollment that puts it in the "pay money back to the state" category.

If your kids don't go to HISD schools, yes, you are paying taxes, but you are also hurting the ratio, which, when considered in totality across Houston, means that some of your taxes are going to help Alief ISD or another property-poor district.

When HISD has to send $100+MM back to the state, that means there are a tens of thousands of $5,000 tax bills that aren't staying with HISD. So, no...it isn't obvious that you would be helping the district.

Liquid Wrench
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Quote:

So, please help me get this straight. If I own a $400,000 home in HISD, and have 2 children, do I help the district financially or hurt it by sending my kids to private school?
Hurting the district, helping your kids.
94chem
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OK, you've answered the question in general terms; we've all heard it - "send your kids to school or we'll lose state funding!!!"

I don't have numbers for the current year, but using numbers from a few years ago, HISD gets about 62% of its funds from local sources (i.e. property taxes), 25% from the state, and 13% from the Federal government. In absolute dollars, this means the state supplies about $500 million/year out of the $2 Billion revenue.

Recapture essentially means that HISD would get to keep another ~$150million in property taxes if there were enough students to justify keeping it. How many more students would it take?

Good question! According to state calculations, HISD wouldn't pay recapture "tax" if it could enroll about 50,000 more students, or about a 20% increase over current enrollment numbers. This math indicates that for each additional student, HISD would save about $3K in recapture payments, minus the costs of adding overhead (new schools, additional teachers, etc.). The current cost of educating a student is about $9K/year; of course adding students wouldn't cost nearly as much, since many of them would be plugged into existing schools and classrooms. However, may of them will require additional staffing, when you consider special ed, guidance counselors, bus drivers...

HISD school tax is around 1.2%, so a 400,000 home owes around $4500/year in school taxes. If the homeowner has two children, it's probably a fairy tale that the district benefits from having those children enrolled.

Based on the way the system is set up, it looks like businesses and people with no children help the system the most, rich families should send their kids to private school, and poor families contribute by sending their kids to public school.

The bottom line, as best I can tell, is that the fiscal problems aren't due to illegal immigrants, white flight, or booming property values. They are primarily due to out of control spending.

Happy to learn from others, but prefer to see numbers instead of uninformed buttstimates.
Texan1976
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combat wombat said:

Tom Hagen said:

Make the illegals pay their own way.


Don't be absurd. Schools are funded by property taxes. People in apartments and other rental properties pay property taxes via their rent payments. Landlords are smart enough to price their rent high enough to cover property taxes. Most of them, anyway.
You think illegals stacked ten deep with 8 of them being kids in a cheap apartment are coming close to covering their nut?
CDUB98
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ChiliBeans said:


Quote:

So, please help me get this straight. If I own a $400,000 home in HISD, and have 2 children, do I help the district financially or hurt it by sending my kids to private school?
Hurting the district, helping your kids.


Can't blue star enough.
CDUB98
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Quote:

The bottom line, as best I can tell, is that the fiscal problems ... are primarily due to out of control spending.


As is the case with all governments.
94chem
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Quote:

So, please help me get this straight. If I own a $400,000 home in HISD, and have 2 children, do I help the district financially or hurt it by sending my kids to private school?

ChiliBeans said:
Hurting the district, helping your kids.


CDUB98:
Can't blue star enough
Blue star it all you want, but on a macroeconomic perspective, it's only true if 50,000 additional students in HISD would cost less to educate than the recapture payment.

Again, for reference, HISD educates ~214,000 students for just over $2 billion. You really think another 50,000 could be added for "only" $150 million?

Sorry to inject numbers into all of the emotion.
Liquid Wrench
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Jesus dude, get over yourself. I'm not even sure who or what you're trying to start an argument with.
JJxvi
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I heard that HISD admins water skiing on lake conroe caused Kingwood to flood.
94chem
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Just trying to follow the logic and the numbers. It seems like we have some people who think that "illegals stacked 8 deep" are causing the budget to be overrun by going to school. It also seems like we have some people (perhaps the same ones?) who think that "illegals stacked 8 deep" are helping the district by not going to school. It's tough to see how both premises can be true, even if we assume there are a significant number of stacks of illegal immigrant children.

I'm actually trying to be educated. In New Caney ISD they have open enrollment. How does that benefit a district? IDK...
Liquid Wrench
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It's not a logic puzzle; the costs associated with immigrants illegal and otherwise are mainly administrative and performance related. Average daily attendance based funding is a separate fact, not an alternative fact.
DartAg1970
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I have not read every response, but from I can tell there are several things at play here:

- There is poor management overall of their financial house (that is obvious).

- HISD is considered a "rich district" and they received so much in property taxes that they actually had to cut a check to the state this year for their "surplus."

- HISD operates too many campuses that they cannot close down.

I would imagine most people from a big city graduated high school in a class of 700 people or more. Well HISD has several high school campuses that have 700 students total and some Elementary schools that have even smaller numbers. HISD has attempted in the past to consolidate campuses and close other campuses to minimize waste, but every time they try some organization comes out to protest the closing and says its racism or any number of other things and the district caves in. Now that is their choice, they could show some backbone and actually proceed with closing campuses that are inefficient, but they don't. IMO they have a leadership problem. I am just glad I don't live zoned to any HISD schools.
evestor1
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Quote:

I heard that HISD admins water skiing on lake conroe caused Kingwood to flood.

Beautiful - perfect form!!
schmellba99
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94chem said:

Just trying to follow the logic and the numbers. It seems like we have some people who think that "illegals stacked 8 deep" are causing the budget to be overrun by going to school. It also seems like we have some people (perhaps the same ones?) who think that "illegals stacked 8 deep" are helping the district by not going to school. It's tough to see how both premises can be true, even if we assume there are a significant number of stacks of illegal immigrant children.

I'm actually trying to be educated. In New Caney ISD they have open enrollment. How does that benefit a district? IDK...
I think most on here have only stated that the cost of feeding, educating, etc. illegals is a contributing fact to the problem.

However, a whole host of folks see the world "illegal" and immediately go into racism defensive mode and think that those that are pointing out one of several contributing factors to over expenditures are stating that this is the only contributing factor, which is not the case.

Generally speaking, school districts are simply another .gov bureaucratic program. They are often run by people that have little to no actual experience outside of the bubble of education and whom have made it their goal in life to become an administrator at a particular or any ISD. There is little to no actual experience with operations budgets, much less experience with running a program with profit in mind.

A lot of the issue is simply how .gov budgets are determined. You get $1MM budget during this fiscal year, if you are a hell of a manager and run a great program and eliminate costs and only spend $800,000 there is no incentive or reward for your fiscal responsibility. In fact, you get punished the next year by getting a reduced budget and often more hands in your cookie jar pressuring your reduced budget because it's percieved you have money to burn. Or you go out and spend every bit of that $200k you would have saved, plus a smidge more and then ask for more money next year.

Most districts are top heavy with admin, many of whom don't actually do anything. I know my wife's district is that way (apparently I just pull stuff out of my ass as evidenced by a comment in another post, so having a wife as a teacher moving into a more administrative role likely means i'm just more FOS). Granted, not all districts work this way, but it's safe to say that the overwhelming majority of districts in urban areas are very similar in nature - highly politicized, run by people that do not need to run school districts, and generally rife with corruption to some degree or another. Too many people working on political careers and absolute dumbasses when it comes to practical or business decisions, and decisions are way too clouded with "what if" scenarios to the point that the best and most logical decision is usually the first one removed from consideration.

Free meals, reduced cost meals, ESL, lack of discipline and a host of other non-essential to education items also have pressing burdens on budgets. School districts having their own police force, school districts buying or leasing vehicles instead of having employees use their own and getting paid mileage, buildings not being sold because of whatever reason (in my wife's district is is political) and the resulting maintenance cost and tax cost of those, not consolidating poorly financed or managed schools into a single school where it can be better managed and subsequently paying the additional overhead, power, maintenance, etc. all end up being reasons why schools operate in the red.

A huge component is parents - most simply don't care. Even more don't care in districts with higher percentages of lower income families (I don't have hard numbers for this, so i'm sure i'll get accused of pulling more **** out of my ass).

It's a culmination of several factors that most inner city or large metropolitan area districts all seem to have in common, yet none seem to change that leads to what HISD is going through. And no politician is going to put their sack on the chopping block to make changes that need to be made, because it's political suicide to do so.
P.H. Dexippus
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lunchbox
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Just wanted to point out that free and reduced meals don't come out of the general fund. The food service depts are set up as a separate fund that comes from the federal govt and the food service depts have to actually be run like a business (yes some are very poorly run businesses).
sts7049
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username checks out
Lonestar_Ag09
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I surely hope you are saying other schools won't pay what HISD schools pay and not trying to say teachers get paid some sort of big money.
trip
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lunchbox said:

Some of the problem goes all the way back to Rod Paige when they decentralized control over the schools and made the Principals kings and queens. You have some schools with double-digit Asst Principals and some with only 2. Next year, they are standardizing the staffing to follow ratios (1AP:250 students, etc) as well as standardizing start times which will save millions in transportation costs...but a lot of it is too little, too late.

The King of his campus thing is killing them.
BBRex
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It isn't just HISD that is struggling. In Austin, the school district is looking at half a billiion dollars in recapture payments this year. Many other districts statewide are struggling with this. Recapture is costing them big money. And there is nothing that says the funds taken by the state for recapture have to be used for education at all.



BBRex
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Looks like the school board meeting tonight is largely about this.
CowtownAg06
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Really? That's insane.
jamaggie06
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If recaprure is really going to "lose" money for a district, wouldn't it make sense to lower taxes to the point where you wouldn't be "losing" money?

I didn't think recapture would ever lower the amount of money per student. Is that not true?
Scientific
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Lower taxes? I can't think of any time when that's an option for local government.
BBRex
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I know at least one area school district lowered its tax rate in the last four years, and not because of recapture. One of the reasons this has caught school districts off guard is that there were multiple lawsuits over the funding model that had been delaying its implementation. The model was deemed legal recently, and suddenly they had to pay.
lunchbox
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BBRex said:

I know at least one area school district lowered its tax rate in the last four years, and not because of recapture. One of the reasons this has caught school districts off guard is that there were multiple lawsuits over the funding model that had been delaying its implementation. The model was deemed legal recently, and suddenly they had to pay.
There are also lawsuits pending right now that could lessen the amount HISD has to pay by upwards of $50 million. The $208 million number you keep hearing is the worst-case scenario they have to plan for.
Lonestar_Ag09
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Are you serious that the money isnt legally mandated to go back to education? I thought It was to go back and be redistributed to the lower income districts.

I personally think that is crap anyways but it is really some BS if the money goes back to the State and then just disappears. No overly surprising but....
JJxvi
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cpsencik04 said:

Are you serious that the money isnt legally mandated to go back to education? I thought It was to go back and be redistributed to the lower income districts.

I personally think that is crap anyways but it is really some BS if the money goes back to the State and then just disappears. No overly surprising but....

It does and it doesn't. The state does pay those recapture funds back, but also a large amount of other money. What's happening is that property values are going up in the suburban and urban areas of the state. So those districts are becoming "richer" and paying larger amounts of recapture and values are way up overall, so the state pays those recapture funds back, but really they then just reduce the other money that that they had to pay in before, so the education system as a whole isn't getting any more money from the increase urban and suburban property taxes, it's just redistributed, and the state doesn't spend as much of its own general funds to education. So rich districts are paying more, not to the benefit of poor districts (who are "equalized" by the same formulas as before) but to the benefit of the state budget.

The result of the current funding system and increasing property values is that the slice of the education pie paid by local taxpayers (some of whom now pay both for their local areas and for other statewide areas through recapture) has increased, and the portion paid for by the state has decreased.
Lonestar_Ag09
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And here I am sitting in a classroom with 2 chalkboards on the walls, 1/4 of my desks broken, a super tight printing budget and contemplating what summer job I may try and get this summer to compensate my salary and coaching stipends...
BBRex
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JJxvi said:

cpsencik04 said:

Are you serious that the money isnt legally mandated to go back to education? I thought It was to go back and be redistributed to the lower income districts.

I personally think that is crap anyways but it is really some BS if the money goes back to the State and then just disappears. No overly surprising but....

It does and it doesn't. The state does pay those recapture funds back, but also a large amount of other money. What's happening is that property values are going up in the suburban and urban areas of the state. So those districts are becoming "richer" and paying larger amounts of recapture and values are way up overall, so the state pays those recapture funds back, but really they then just reduce the other money that that they had to pay in before, so the education system as a whole isn't getting any more money from the increase urban and suburban property taxes, it's just redistributed, and the state doesn't spend as much of its own general funds to education. So rich districts are paying more, not to the benefit of poor districts (who are "equalized" by the same formulas as before) but to the benefit of the state budget.

The result of the current funding system and increasing property values is that the slice of the education pie paid by local taxpayers (some of whom now pay both for their local areas and for other statewide areas through recapture) has increased, and the portion paid for by the state has decreased.
That's more accurate. Let's say the state allocated $5 billion for education, and also identified $1.5 billion for recapture, that doesn't mean $6.5 billion is used for education. The state says the $1.5 billion collected is part of the $5 billion it originally allocated, then uses it for other projects.
Shoopy
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There are a lot of valid criticisms here and a lot that are misinformed.

1) HISD gives people plenty of reason to criticize, but in this case they are SOMEWHAT the victim of unforeseen circumstances. Harvey was really a triple-whammy. First, the District itself suffered over $200M in property damage. Some of that will be recouped from insurance and FEMA, but it is unclear how much and when. Secondly, the predicted drop in property values as a result of the storm. The tax rate was already set based on property values, so lower values directly reduces revenue. They are proposing a tax increase to be voted on in May in an effort to raise the rates enough to offset the lower values, effectively meaning people will, on average, pay about the same taxes. Not sure it will pass, because looking only at the percentage, it's a big increase and most people won't see it as zero sum. Thirdly, a lot of people moved out of HISD after the storm, or dropped out, reducing enrollment that is used to calculate the school's funding. On top of all that is recapture, which was calculated before the storm for the next four years. Technically, the state doesn't have to recalculate until 2020, so even with a major drop in revenue, they will pay the same in recapture as it was already calculated. Again, HISD may have fiscal responsibility issues, but there is no way they could have predicted all of this would happen at once.

2) The District's model of decentralization needed to go away regardless of all this, and this is probably somewhat of a political bailout they can use as an excuse for something that was going to be done anyway. The decentralized model works well when all of your Principals are supremely qualified and responsible leaders. But the reality is, there is a MAJOR shortage of these out there. The District hasn't done a great job preparing the next generation of Principals and keep losing their best ones to Suburban districts that pay more with less grief. They then spend less resources training people out of fear they will leave, and the cycle continues. This vacuum of good leadership at the school level requires centralization so the few qualified people they do have can make decisions for and "advise" the more inexperienced principals that are running schools.

3) The District's biggest issue for a LONG time has been how much they listen to their largely uneducated and uninformed community members, and base major decisions on this input from people given a VERY disproportionately powerful voice than they really have in their respective communities. So many of these people who "speak for their community" do not have wide support, but they are vocal and annoying enough that the Trustees think they have to listen to them or risk not being re-elected. Most of the time, there may be less than a dozen people that actually agree with these community activists.

I'll respond to others individually.
Scientific
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https://www.texasmonthly.com/politics/property-taxes-high-thank-legislator/

Quote:

Because Texas has no income tax, school property taxes and the sales taxboth of which everyone in the state pays in some capacityaffects the lives of Texans more than any other source of government revenue. To put it in perspective, if property taxes were a state tax, the $28.1 billion collected by the state's school districts would make property taxes the second-largest tax in Texas behind the sales tax. It's not just the rising market value on homes that drives the wealth, but every new skyscraper office tower also drives up a district's taxable wealth.
As I said, property taxes are collected by local school districtsbut it's the Legislature that makes the rules on how those funds are distributed. And the rules are a complex school-funding formula that has put a greater burden on property-tax payers to pay for the state's public schools while simultaneously reducing the state's share of the expenses.
This extra burden is not felt by all taxpayers, though. If you live in a poor part of the state, your property taxes may actually decline, and in rural areas with relatively stable values, the taxes may stay about the same.

But, if you are in a high-growth area with rising commercial and residential valuessay, Austin or Dallas or Houstonyou may find yourself living in a school district that is not only subsidizing poor school districts but also the Legislature's commitment to those school districts.
Shoopy
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jamaggie06 said:

I know politicians are dumb, but there is no way that having higher tax revenues causes the overall total to be reduced, right? Just bc they are making a payment to recapture or whatever, thats bc they exceeded some predefined dollars to kids ratio correct? Thus, beforr racapture, the ratio was lower. Now its higher. But beyond some limit, so they have to pay out. Or do they actually have less money per student?
The problem is the Recapture calculator is like 20 years old, when Districts also received more money directly from the State and Federal Govt. Over time, State and Federal have reduced funding, requiring districts to rely more and more on local revenues. But they never changed the Recapture formula to account for that.
Shoopy
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BBRex said:

I know at least one area school district lowered its tax rate in the last four years, and not because of recapture. One of the reasons this has caught school districts off guard is that there were multiple lawsuits over the funding model that had been delaying its implementation. The model was deemed legal recently, and suddenly they had to pay.
Districts almost never lower their M&O tax rate. If the total rate is lowered, it's usually a result of expiring bonds. M&O rates typically only go one direction.
Shoopy
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DartAg1970 said:

- HISD operates too many campuses that they cannot close down.

I would imagine most people from a big city graduated high school in a class of 700 people or more. Well HISD has several high school campuses that have 700 students total and some Elementary schools that have even smaller numbers. HISD has attempted in the past to consolidate campuses and close other campuses to minimize waste, but every time they try some organization comes out to protest the closing and says its racism or any number of other things and the district caves in. Now that is their choice, they could show some backbone and actually proceed with closing campuses that are inefficient, but they don't. IMO they have a leadership problem. I am just glad I don't live zoned to any HISD schools.
This is 100% accurate. The best long term suggestion for the District would be to consolidate schools. I'm not sure I buy a lot of HS campuses with less than 700, other than a couple of the magnets, but still the point is that they are small compared to the Suburban schools. I think there are only two with over 3,000 students, and most are closer to 2,000 or smaller. Political pressure and the importance placed on "neighborhood" schools has prevented consolidation. With virtually all the High Schools now being brand new buildings, this won't happen anytime soon either.
 
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