CFISD official says he's not inclined now to cut homestead exemption

A Houston-area legislator has introduced a bill that would allow Cypress-Fairbanks Independent School District to keep all the revenue generated if it chose to either roll back or eliminate its homestead exemption.

But school board president John Ogletree Jr. said he was not inclined to consider a tax rollback, even in light of the bill, which was filed by state Rep. Gary Elkins, R-Houston.

"I appreciate Rep. Elkins thinking of us, but speaking for myself, I would not want to increase any further the tax liability upon our citizens," Ogletree said. "We're all suffering and trying to come out of this recession, and I just would not think I would want to increase that tax burden in times like this."

Superintendent David Anthony has not been inclined to raise the idea of another run at a tax rollback, pointing to a 2009 board vote in which trustees rejected his proposal to roll back the district's homestead exemption to stem a projected $28 million budget hole. Under the proposal, homeowners would have written off 10 percent, rather than 20 percent, of their home values for property tax exemptions. Such a rollback would have generated an additional $22 million in revenue annually for the district.

The proposal, however, became a lightning rod for controversy and the subject of various petitions before the board voted 5-1 to reject it.

Elkins' bill does not name a particular school district although he admits it was intended to address Cy-Fair. Still, the legislator said he is not eager to see Cy-Fair's optional homestead exemption go away. Instead, he's chosen to play offense on a decision trustees might be forced to make in more dire budget times.

Cy-Fair already has cut $70 million from its budget over the last four years.

Exemption not eliminated

"I'm not eliminating the homestead exemption. That's a decision that the Cy-Fair school board has to make," Elkins said. "All I'm doing is fixing it in the event that if they do have to do that, if they eliminate the homestead exemption, they are the sole beneficiary of the decision."

Elkins calls his bill, House Bill 839, the correction to an inequity created in the most recent rewrite of school finance legislation, passed in 2006. The 200 or so school districts in the state that offered optional homestead exemptions were promised that those exemptions would be "held harmless," Elkins said. Such a promise meant that districts would not be penalized financially for the exemption.

Instead of splitting the money generated by the tax rollback between the district and the state, Elkins wants to make sure Cy-Fair gets all the benefit of any tax decision.

"We're looking at a choice right now that might give us 10 percent of the money and send 90 percent of the money back to the state," Elkins said. "What I want to make sure happens is that if the Cy-Fair trustees decide to eliminate any portion of the homestead exemption, then the district is the sole beneficiary of that tough decision and not subject to Robin Hood."

Robin Hood is the nickname given to the state's school finance system, which takes funds from the property wealthy districts and redistributes the money to the poor. The Cy-Fair district's tax base is residential heavy and commercial poor, making the district somewhat property poor, a major factor in school finance adjustments.

Equity Center questions

The group that represents property-poor school districts, the Austin-based Equity Center, still has questions about Elkins' bill. Anything that tips the scales toward a school district and away from balancing inequities among all districts' funding under financing formulas is a problem for the Equity Center.

"It's entirely within the school board's power to adopt or to end a local option homestead exemption," said center executive director Wayne Pierce, a one-time superintendent in North Texas.

All types of school funding, however, must play by school finance rules, Pierce said. The Equity Center has problems with an additional shift of funding toward a particular district. A benefit for one district means a loss for another, Pierce said.

"The problem we have right now is that we're all drinking out of the same pool, but it's not sufficient to do the job that schools are given by the state to do," Pierce said. "What this amounts to is a finite pool of money, and every dollar that comes out of it ends up being an entitlement for a single school district because that's another dollar that kids in another district will have to do without."

At the Feb. 1 Texas Association of School Administrators' Midwinter Conference in Austin, Anthony did press Texas Commissioner of Education Robert Scott as to whether the agency would continue to penalize fast-growth districts faced with continuing budget woes.

Specifically, the commissioner refuses to guarantee the low-interest bonds of a school district that chooses to pursue a forced reduction in staff. At one time, a reduction in force might have been considered a result of poor planning on the district's part.

Scott, in his response to Anthony, said he would consider reviewing his commissioner's rule for guaranteeing bonds, recognizing that individual districts were going through difficult budget times.