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Taxes, finances and businesses
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What does the bond program impact my property taxes?
Based on current assumptions and the current bond authorization, taxes will increase from the current rate of $1.1567 per $100 value to $1.2052 by the year 2017. The following table shows the tax impact based on an assessed home value of $198,936. The increase shown below will be phased in beginning in 2014 with a 1-cent increase. Another penny would be added to the property tax rate two years later in 2016. Five years from now, in 2017, the tax rate would increase an additional 2.85 cents. By 2017, the annual cost to the average taxpayer will be approximately $70.
Average Market Value $198.936
Homestead Exemption ($15,000)
Homestead Exemption – 20% Local ($39,787)
Average Taxable Value $144,149
$0.0485 increase in tax rate = $69.91
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Would this bond referendum have any impact on the taxes paid by homeowners age 65 and older?
No. The property taxes of those 65 and older with a homestead exemption will not be affected. Taxes of those receiving the 65 and older homestead exemption are frozen at their present rate for as long as they maintain their homestead.
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Are facility bond taxes deductible on my federal tax returns?
Generally, school bond taxes are deductible if you itemize your deduction on your federal tax return. As an itemized deduction, you may get a return of 10 percent to 35 percent depending on your income level. Your tax professional will be able to assist you with this deduction.
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What is HISD's current financial condition?
The district is recognized for its fiscal responsibility. It has a Standard & Poor's credit rating of AA+ and a Moody's rating of AAA, the highest possible credit rating. No district in Harris County has a higher underlying rating from Moody's or S&P than HISD.
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How do HISD taxes compare to other school district tax rates in the area?
Houston ISD has the LOWEST TAX RATE of the 26 districts located in Harris County. HISD's property tax rate would remain the lowest in Harris County, even with the tax rate increase that will happen with the approved bond program. In addition, HISD is among the few school districts in Texas that offer homeowners an additional 20 percent homestead exemption. As a result, HISD homeowners pay hundreds of dollars less in annual school district taxes than the owners of similarly valued homes elsewhere.
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Will HISD be able to sell its bonds at a favorable rate?
HISD's bonds should receive the highest possible rating due primarily to the guarantee by the Texas Permanent School fund. Because of the high rating and the current low interest rates, the district expects a favorable market for its bonds. HISD's bond ratings put the district in the top tier of Texas' most credit-worthy school districts.
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What is the difference between the Maintenance and Operations (M&O), Debt Service, and Total tax rates?
M&O taxes are used for day-to-day operations – salaries, supplies, utilities, insurance, fuel, etc. Revenue from the Debt Service tax rate can only be used to retire bonds sold for specific purposes: construction, renovations, buses, portable buildings, land, technology and the cost of issuing bonds and related fees. The total tax rate is a combination of the M&O tax rate and the Debt Service tax rate.
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In 2007, HISD promised to increase the opportunities for businesses owned by minorities and women to participate in the bond program. Was that promise kept?
Participation of minority- and woman-owned business enterprises (MWBEs) in HISD's bond construction program recently hit an all-time high – 32 percent. There are 17 percent more MWBEs registered to do business with HISD today, and the number of minority-owned businesses receiving contracts is up 10 percent. At the same time, the number of woman-owned businesses winning HISD contracts is up 7 percent. These participation rates exceed the goals the HISD Board of Education set for the program.
