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HISD may raise tax rate

The state of Texas may not be considering any revenue enhancements to deal with its budget shortage, but that doesn’t mean that other taxing entities, such as school districts, won’t consider them.

Melinda Garrett, HISD’s chief financial officer, said the administration is considering various options for balancing the budget, including those that involve increasing the tax rate and reducing a special tax discount.

“I wish we could hold them steady,” Garrett said. “It depends on how large the final state cut will be and how bad you want to raise class sizes and let people go.”

Garrett estimates, based on discussions at the state level, that the district will be $170 million short next year. That’s a gap about half as large as one consulting group predicted initially based on the Legislature’s early, bare-bones budget proposals.

The HISD board will have to decide whether it wants to balance the district’s budget through cuts alone or with additional tax revenue.

Estimates from HISD documents show that the district could, if the board chose, cover most of the $170 million shortfall by raising the tax rate by the maximum 7 cents and by abolishing the special tax break known as the optional homestead exemption.

That would cost the owner of an average-priced home an extra $580 a year.

“That’s not likely to happen,” Garrett said.

I would imagine that HISD will see how much it can squeeze out of relatively non-painful cuts – i.e., cuts to central admin personnel and the like, but not to classroom instruction – and adjust taxes to make up the rest. They have a fair amount of flexibility on that, meaning that they’re going to take a hit for having been fiscally conservative up till now. The real problem here, as Trustee Harvin Moore points out, is that the state is funding a smaller and smaller share of public education, while localities are ponying up more. That will be what the next lawsuit it about, much like the previous one was.

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