Lone Star College operations review finds tax accounting error

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Lone Star College System announced that an internal review of operations at LSC-University Park revealed that the college system had not paid taxes on commercial rental properties as required by law.

The complex at University Park was purchased in 2008 and includes a college (LSC-University Park), a number of System Office departments and employees, a University Center, and a commercial lease component.

The portion used for educational purposes is tax exempt. The commercial lease component is taxable and part of a strategic effort to diversify revenue sources and manage the college efficiently. Lone Star College purchased over 1 million square feet and will lease out available space until the campus at that site reaches its maximum enrollment potential, estimated to be 18,000-20,000 students over a 10-year period.

“We proactively contacted the Harris County Appraisal District and met this week with Mike Sullivan, Harris County Tax Assessor-Collector,” said Steve Head, LSC chancellor. “The amount is significant and we acknowledge an inadvertent error in our internal accounting and management oversight. The University Park commercial lease activities are part of our auxiliary enterprises and payment of the taxes will not involve any taxpayer monies.”

Board Chair Linda Good noted that the Board has been kept informed and reiterated the commitment of the Board to ensure that college funds are properly monitored in an open and transparent manner.

“This is good news for taxpayers,” said Tax Assessor-Collector Mike Sullivan. “Chancellor Head is handling this professionally and expeditiously. I appreciate Lone Star College and its service to our community. Lawyers assisting the school have determined that total taxes due are $2,024,000. We are working with the College to triple-check the numbers and finalize a repayment plan, getting that money into the hands of taxpayers.”

Lone Star College is reviewing its internal processes and remains committed to its students, taxpayers and community.