Humble ISD tax rate lowest in decades, but taxpayers may still face higher bills

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The lowly ISD trustees approved a 4.6 cent property tax rate cut for 2022 at their September board meeting, bringing the district’s new rate to $1.2929 per $100. devaluation. But the decades-low rate won’t necessarily mean a smaller tax bill for taxpayers.

Four years ago the tax rate was $1.52. Since then, the district’s tax rate has dropped each year in part due to Texas House Bill 3 passed in 2019.

Led by state Rep. Dan Huberty of Humble, the bill made major changes to school funding and the calculation of tax rates for school districts, including an increase in state funding for schools and property tax cuts.

The goal of HB 3 was to send more state money to public schools and lower property tax rates, while educating students statewide.

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Humble ISD Chief Financial Officer Billy Beattie thinks HB 3 does a good job of determining what schools need to run effectively.

“Over the past four years you can see how the HB 3 legislation is working. As our values ​​have gone up, our tax rate has gone down over the past four years, about 22.71 cents over that time,” he said.

“It can be confusing for taxpayers who see the tax rate go down and their property tax bill go up,” Beattie said. “It’s actually the result of the increased values ​​of the Harris County Assessment District.”

Texas Schools Funding Formula

School districts receive their funds through a combination of local property taxes and state funding.

With HB 3’s funding formula, depending on the district and its needs, the amount of assistance provided by the state will be different, Beattie said.

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“Some districts are recovery districts so they are able to generate all the revenue they need to operate under the HB 3 funding formulas from their local tax revenues alone and therefore they receive no funding from the State, and some that are 100%,” he explained.

Humble ISD receives about 45% of its funding from local taxation and 55% from the state, according to Beattie.

“When we calculate using the House Bill 3 funding formulas, which tell us what we need to operate, part of that is based on student population and other property values,” he said. .

“As property values ​​go up, the local tax rate gets compressed and goes down because you’re able to generate more financing from that higher value.”

Many variables come into play in the formulas used to calculate this funding.

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Humble ISD is considered a heavy residential neighborhood, which means homes make up the majority of its tax base.

“I would say we’re about 75% rooftop and the rest commercial,” he said.

Even though the tax rate is going down this year, the Texas property tax code requires the council to declare that the tax rate is actually going up. This is because the district has adopted a higher rate than the rate without a new recipe. The zero new income rate is the rate that would generate the same tax income on the same properties in the new year as the previous one.

“No new revenue takes into account student population, needs or changes in operating costs,” Beattie said. “For example, the no new revenue rate would not take into account rising energy costs, student growth or inflation. In this environment, the district would not be able to provide the same level of service to families without a new income rate. Fortunately, the growth in property values ​​we are seeing in our area allows the district to reduce the tax rate without reducing family services. »

Adopting a new revenue rate, even with district-wide growth, would mean a revenue reduction of approximately $4 million.

Real estate growth increased by almost 10% in Humble ISD. However, as property values ​​grow, the state reduces its share of per-student funding to the district.

“Humble ISD receives the same amount of money, set by the state, regardless of the value of the property,” Beattie said. “If local values ​​increase and taxpayers pay more inside Humble ISD, the state reduces its share to the district to maintain the same amount per student.”

Texas voters in May approved Propositions 1 and 2 dealing with homestead exemptions and it had some effect on the district.

“It takes away from that tax revenue, that levy that we have, but with the 10% growth in property values ​​that we’ve seen in Humble, it hasn’t hurt us,” he said, adding that this was offset by property values.

Beattie said the district has been able to lower the tax rate not just because values ​​are going up, but because of new developments adding to the tax base.

Beattie said he doesn’t believe growth is slowing.

“I believe our demographers are predicting that we’re supposed to be built at around 55,000 students and we’re currently at 48,421 students as of Friday,” he said.

Some districts, including Beaumont, Katy, and Fort Bend, hold tax rate elections.

“We’re below the voter-approved tax rate, so we won’t be making tax rate choices, at least this year,” he said.

“At a good place”

With the adoption of this year’s rate, the district has adopted a balanced budget that provides increases for all staff.

“While some districts do not have balanced budgets or have not used one-time federal funds to balance their budget, Humble ISD is financially sound and no one-time federal funds were used to create the balanced budget in Humble ISD “, said Beattie in a press. Release.

With growth expected to continue over the next five plus years, Beattie sees the district in a strong position.

“Families continue to choose Humble, and we believe that’s in large part because of the community and the schools. And, putting our growth into perspective, there are only five districts statewide that have grown by more students than Humble ISD over the past six years.”

Additionally, the neighborhood has one of the best bond ratings in the state.

“Humble ISD is a leader in budget management,” said Jamie Mount, Director of Communications. “Only 2% of school districts in Texas have a higher bond rating. The district’s bond rating is equal to or greater than 98% of school districts in Texas.”

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