Strike Four: Whitmire Whiffs Perry

First things first ... credit where credit is due to St. Sen. Whitmire for filibustering HB2 in the final hours of the session. I've certainly got no beef with stopping a bad bill from getting a signature into law. But what was Whitmire's biggest issue with HB2?

Sen. John Whitmire, a Democrat who is the longest-serving member of the Senate, said one provision he disagrees with in the 470-page bill would require school board members to be elected during November general elections. Critics say that would make school board races more politicized and costly.

Well, OK. Whatever it takes, I guess. But by my count, it would also bring school board elections out to a point in time when most people are voting. The more the merrier. If there's a few districts where lack of knowledge about candidates causes an Election Day anomaly, I have ultimate faith in the voters of the school district to learn from it.

Personally, I think I would have gone with the disingenuous accounting of the bill that Scott Hochberg identified rather explicitly earlier in the session (Via Quorum Report).

I have discovered what I believe is a significant flaw in the analysis of the effect of the recapture limit that is the source of so much debate in the HB2 committee.

The discussion has been focused on the windfall that districts like Highland Park ISD will receive in the out years. Supporters of the recapture limit argue that the 8% revenue growth cap keeps that windfall from happening now, so it has minimal impact on current funding or current state costs.

But there is another effect they are missing.

Their analysis assumes that HPISD and others like it will continue to tax at or near the new maximum tax rate. But it would not be rational for them to do. Since they are limited to a growth cap of 8% over current revenue, and since the recapture limit allows them to get to an 8% gain at a much lower tax rate, they would not continue to tax high since any revenue beyond the 8% growth cap would just go directly to the state anyway.

Instead, they would reduce their tax rate to whatever produces exactly a 8% growth in revenue after recapture (which would be limited by the recapture cap). For HPISD, a rough calculation puts that tax rate at about 80 cents or so, assuming the recapture limit is the 35% figure being discussed.

What's especially interesting is that the optimum tax rate for HPISD (and similar "ultra-wealthies") is not determined by where HB2 ends up setting the statewide maximum tax rate. It's determined only by the recapture limit and the growth cap. So, even though most of the property tax relief that was originally in HB2/HB3 has disappeared in current versions of those bills, districts like HPISD will still see these huge reductions in their tax rates because of these other provisions.

True, the growth cap goes up in the out years, meaning that the optimum tax rate would also up, but we cannot assume that once the district reduces its tax rate, that it would automatically increase it. If it does, the district could then get the kind of revenue gains that people have been talking about (without any additional money coming back to the state.) But the district would have a much lower tax rate to start from than would other districts, and, of course, would raise much more for every penny of tax rate increase.

I believe, but have not been able to confirm, that the LBB printouts assume the districts affected by the growth cap will continue to tax high, producing extra revenue from Ch. 41 districts and reducing state payments to Ch. 42s that are subject to the dragback. I believe most of that revenue will not occur, which would mean HB2 would cost more than currently projected.

LBB projected the effect of the growth cap on HPISD to be $43M for the biennium, so when the other affected districts are added to that, it could be a fairly significant amount to be off.

But I guess it's just easier to lambaste excess involvement in school board elections. As one who's rather incensed with the latest Katy ISD dustup, I'm all in favor of shaking up a few school districts from entrenched power.

That said ... Sen. Whitmire, if you wish to filibuster HB3 (for whatever lame reason I suspect you'll come up with), all will be forgiven for selling out your party on redistricting.

Moving on, Perry's done the predictable and called for Round Five to bury "Robin Hood" with "Recapture Lite." Unfortunately, the left hook to that jab comes with the pricetag of being the biggest tax hike on working Texans. Seeing as to how I am one, I say "Nay."