The Houston Chronicle reports today that over 100 school districts around the state are submitting bond proposals to voters in November that could in many cases either substantially reduce of completely offset the property tax cut promised by state leaders. Harris County Tax Assessor-Collector Paul Bettencourt, a limited government champion, stated: "The tax relief from school finance reform never amounted to the $2,000 per homeowner that the governor talked about. With bond packages and increases in property values, all the relief will be gone in two years."
Among the bond issues on Houston area ballots are: $805 million by the Houston Independent School District, $807 million by Cypress-Fairbanks Independent School District, and $597 million by Spring Branch Independent School District.
Consider that Spring Branch ISD's bond could increase the tax rate by as much as 9.75 cents per $100 of assessed value. A 9.75-cent tax rate boost would cost an additional $156 for the owner of a $200,000 home with the standard homeowner's exemption. HISD's bond package is expected to raise the district's property tax rate about 3 cents over two years.
It is not just schools. Harris County is asking for $630 million in bonds for parks, roads, a jail and family law courthouse. The Port of Houston Authority seeking $250 million to make environmental and security improvements, as well as continue construction of its Bayport Container and Cruise Terminal.Of
Of course, the state itself is asking voters to approve some $10 billion in bonds designed to do everything from cure cancer to build more prisons.
One thing that is needed is clear guidelines for what expenditures should be paid for with bonds versus out of government entities' budgets. Bruce Hotze, treasurer of tax watchdog group Let the People Vote, told the Chronicle he objects to the fact that the HISD bond includes routine roof repairs, noting, "We shouldn't be taking out a 35-year mortgage to pay for putting new roofs on buildings."
It's crucial that voters critically examine all of these bond proposals and consider not just the immediate impact on their taxes but the long-term effect of high rates of indebtedness on taxpayers, including through higher rates of interest that could result from lower bond ratings if investors believe a governmental entity has overextended itself.