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Published in Print: May 12, 2004, as ‘Robin Hood’ On Ropes In Texas School Aid Tilt

‘Robin Hood’ On Ropes In Texas School Aid Tilt

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Robin Hood is an enduring legend, but his philosophy hasn’t been an effective strategy for financing schools in the United States.

At least, that’s the story unfolding in a special session of the Texas legislature.

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Read the accompanying story, "Move to End Texas Tests Comes as a Surprise."

Texas’ approach of funneling money from wealthy districts to poor ones as a way to equalize school spending is likely to be severely curtailed in whatever school finance plan emerges from the session, according to sources in the state.

Though it’s unclear what will replace the current school aid system, the pending changes show the difficulties that policymakers there have found—just as in Vermont and other states—when trying to take from the rich and give to the poor.

Such systems face political snags as taxpayers watch their money leave their local schools. The fear is that efforts to equalize funding will mean less money to sustain the high-caliber schools people are used to in well-to-do communities.

"What a lot of legislators are afraid of," said Steve Smith, an analyst of school finance policy for the Denver-based National Conference of State Legislatures, "is that Robin Hood systems … end up with an equity of poverty."

Even groups that have successfully challenged state school aid systems in court are skeptical that the Robin Hood approach works.

"I don’t think it would be politically feasible," said Molly A. Hunter, the director of legal research for the Campaign for Fiscal Equity, which won a ruling last year from New York’s highest court, declaring that the state fails to subsidize adequately the New York City schools. ("Court Orders New York City Funding Shift," July 9, 2003.)

"It might possibly pit different parts of [New York] against others," she said. And the Robin Hood strategy might undermine efforts to close the gap between low-performing schools and high-performing ones.

Successful districts "do a nice job, and they set a nice standard," Ms. Hunter said. "I don’t think other districts want to see those districts harmed."

Revisiting 1993 Plan

Texas has had its Robin Hood school financing system in place since 1993, when the legislature adopted the system in response to a state supreme court order to equalize state spending on public schools.

Under the arrangement, any district that has taxable property values exceeding $305,000 per student isn’t allowed to keep all of its property-tax revenue. It must send money to the state, consolidate with another district, or give excess funds or valuable property to a property-poor district.

About 100 of the state’s 1,100 districts subsidize other school districts.

The state refers to the process as a "recapture" of funds. But it’s commonly called the Robin Hood method because districts in wealthy suburbs and oil-rich areas subsidize communities with high poverty.

While the system means some districts must help pay for others, a majority of students in the state benefit from it, according to supporters of the system.

"Recapture helps about 90 percent of the kids in the states," said Albert H. Kauffman, a senior legal and policy advocate for the Civil Rights Project at Harvard University and the lead lawyer in the school finance case that forced Texas to adopt the current funding plan.

"Not only do they get more money" in poor areas, he said, but "the system is more equitable."

But the funding method has proved to be politically unpopular—just as a similar setup failed to take hold in Vermont.

In Vermont’s Act 60, adopted in 1997, the state changed the property tax for schools from a local levy to a statewide tax. The state then distributed the tax money equitably throughout the state.

Towns could supplement their school budgets by imposing local property taxes, but a portion of the money from the local levy was sent to the state’s "sharing pool" to be distributed to poorer areas.

The system was changed last year after the number of towns that shared their local revenue continued to rise.

"The sharing pool was very unpopular," said Speaker of the House Walter E. Freed, a Republican. "More and more communities were falling into the sharing pool."

Vermont ended the sharing pool and retained the statewide property tax. It also generated about $50 million a year in additional revenue by raising the state sales tax by 1 percentage point.

The money was necessary to "sweeten the pot" of school funding, Mr. Freed said. Otherwise, he added, some schools would have ended up losing money again.

"Once it’s in place," he said, "you can’t take money away from the urban areas that were getting the extra money."

The Vermont experience is a signal that such Robin Hood plans are unlikely to succeed elsewhere, according to Ms. Hunter of the Campaign for Fiscal Equity.

"Robin Hood usually doesn’t get off the ground" in other states, she said. "Once wealth comes your way, you feel entitled to it."

She pointed out that states such as Maryland and Kentucky have successfully equalized school spending by raising funds from other sources, such as statewide sales and income taxes.

Texas’ Dilemma

In Texas’ special session last week, House members rejected Gov. Rick Perry’s proposal to collect $6 billion annually from taxes on video slot machines and other so-called sin taxes. ("Texas Governor Unveils School Funding Plan," April 14, 2004.) But many fellow Republicans objected to the legalized gambling on moral grounds, and Democrats said the gaming money wouldn’t be a steady source of income.

The House of Representatives instead passed a bill that would retain a portion of the Robin Hood system, but would probably require only 20 districts to share their wealth across the state, according to John Cole, the president of the Texas Federation of Teachers, an affiliate of the American Federation of Teachers.

"They didn’t kill Robin Hood," he said. "They simply made him very sick."

The bill, which was before the Senate late last week, also would raise the state sales tax from 6.25 percent to 7 percent.

However, the bill wouldn’t raise enough money to keep up with current spending.

Even House members publicly expressed hope that the Senate would craft a plan that would increase spending while limiting the impact of the Robin Hood system.

Whatever the outcome, unusual concentrations of property wealth in the vast state mean that some vestiges of Robin Hood will remain, say observers there. In particular, the state has several rural districts with expanses of valuable ranch and oil land. The areas are sparsely populated, meaning the school districts serving them have few students and tremendous property wealth, Mr. Cole noted.

"It’s hard to have an equitable system in Texas without wealth-sharing unless the state is willing … to put some real money into the system," Mr. Cole added.

Staff Writer Michelle Galley contributed to this report.

Vol. 23, Issue 36, Pages 1,24

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