education & housing
The Robin Hood school finance program has been largely successful in substantially equalizing 90 percent of Texas school districts’ spending per student.
“The playing field is not totally leveled, but we are ahead of where we were 10 years ago,” said Dan Casey, a partner in Moak, Casey and Associates that does consulting for Texas public schools.
According to Texas Center for Education Research and Texas Association of School Boards, 90 percent of students in Texas are in school systems with roughly equal wealth, and 99 percent of the revenue in the system has been redistributed to make it more equal.
Under the plan, local property taxes are the primary source of funds for the 1,036 Texas school districts that levy a property tax. In 1999-2000, local taxes made up more than 50 percent of school district revenues.
The significant variation in school districts’ taxable property results in a large gap between low-wealth and high-wealth school districts’ ability to raise local funds for financing education costs.
According to Texas Education Agency, the state administrative agent supervising public education, district property wealth varies between $142,700 and $4.6 million per student.
That means, without any regulation or state aid, the districts at the extremes will be able to raise $2,755 and $40,147 per student respectively.
A multi-decade history of litigation has addressed the state response to this disparity. Following the Edgewood ISD v. Kirby lawsuit filed in 1984, the state legislature initiated a series of failed attempts to address the equity problem.
These bills included Senate Bill 1019 in 1989, Senate Bill 1 in 1990 and Senate Bill 351 in 1991. The courts found all of these legislative actions unconstitutional and overturned them.
In 1993, the Texas Legislature passed Senate Bill 7, which provided all districts with substantially equal access to revenue for equal tax effort.
The Texas Supreme Court ultimately accepted Senate Bill 7 as constitutional. The finance system in place today is primarily based on the provisions contained in this act.
The system restricts the school districts’ tax rate for management and operation costs to $1.50 per $100 of property wealth. Also, high-wealth school districts have to keep their wealth level at $295,000 per student. The revenues above this limit will be redistributed to low-wealth districts in order to achieve equity.
According to Joe Wisnosky, a TEA spokesman, 83 districts had to undergo the wealth equalization procedure in school year 2000-2001. The recovered revenue from these districts varied from $3,000 to $2 million. Low-wealth districts received a total of about $522 million annually from the redistributed wealth.
In addition to limiting the school districts’ wealth and redistributing the excess money recovered from high-wealth districts, the state provides funding to school districts in inverse relation to their wealth. School districts with higher property wealth receive less state funding than low-wealth districts. State aid substantially equalizes overall school funding.
In Houston, for example, Houston Independent School District has a property wealth of $239,246 per student and receives a state aid of $1,474 per pupil at a tax rate of about $1.52 per $100 of taxable property.
Deer Park ISD, on the other hand, has a property wealth of $600,260 per student and receives a state aid of only $332 per pupil at a similar tax effort. HISD's total revenue per pupil is $5,536, whereas that of Deer Park is $6,430.
Despite the system’s success in reducing the disparities between school districts’ wealth, some unanticipated problems have surfaced.
“[The plan] has been successful in bringing the property wealth of wealthy districts down,” Wisnosky said. “It has been less successful in bringing the wealth of poor districts up.”
As a result, many districts are concerned about the adequacy of the system. The Austin-based Equity Center, representing 939 low-wealth school districts, said, “Inflation, along with ever-increasing state and local [performance] demands, are driving up the cost of education faster than the legislature is providing new funding."
The Executive Director of the center Wayna Pierce said that the system is not adequately funding education as prescribed by the Constitution. According to a Texas House of Representatives report, many districts are approaching the maximum tax-rate limit of $1.50 for management and operation costs. Nearly a fifth of the 1,036 school districts in Texas are levying taxes at the maximum rate. Another 40 percent have tax rates above $1.44.
“If local sources of revenue are exhausted,” Casey said, “districts will be totally dependent upon state aid.”
He said more funding and resources are needed. Casey said one disadvantage of the legislation is the cap on how much districts can spend. According to Casey, the Texas Senate is undertaking a major study on public school finance at the end of this legislative session to review the problems with the current system.
“I hope they don’t just look at finance, but also at how finance is linked to education performance,” he said.
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