Texas School District Challenges State "Robin Hood" Finance System

Terrance Stutz:

Protests from this small school district nestled in the Texas Hill Country are reverberating across the state's school finance landscape.

School board members – backed by parents and local business owners – have decided to say "no" when their payment comes due next month under the state's "Robin Hood" school funding law.

Wimberley is one of more than 160 high-wealth school districts – including several in the Dallas area – that are required to share their property tax revenue with other districts. But residents here insist that their students will suffer if they turn the money over to the state.

"We're not going to pay it," said Gary Pigg, vice president of the Wimberley school board and a small-business owner. "Our teachers are some of the lowest-paid in the area. Our buildings need massive repairs. We keep running a deficit – and they still want us to give money away.

"It's unconstitutional – and I'm ready to go to jail if I have to."

Mr. Pigg and the rest of the Wimberley school board voted last fall to withhold the payment of an estimated $3.1 million in local property taxes – one-sixth of the district's total revenue – that was supposed to be sent to the state under the share-the-wealth school finance law passed in 1993. The law was passed in response to a series of court orders calling for equalized funding among school districts.

Wisconsin's school finance system takes a similar approach: High property assessement values reduce state aids. Unlike Texas, Wisconsin simply redistributes fewer state tax dollars to Districts with "high" property values, such as Madison. Texas requires Districts to send some of their property tax receipts to the state to be redistributed to other districts. School finance has many complicated aspects, one of which is a "Robin Hood" like provision. Another is "Negative Aid": If Madison increases spending via referendums, it loses state aid. This situation is referenced in the article:

Regarding the possibility of a tax hike, Mr. York noted that an increase would require voter approval – something that is not likely to happen with residents knowing that a big chunk of their money will be taken by the state.

One of the many ironies in our school finance system is that there is an incentive to grow the tax base, or the annual assessment increases. The politicians can then point to the flat or small growth in the mill rate, rather than the growth in the total tax burden.

Finally, those who strongly advocate for changes in Wisconsin's school finance system must be ready for unintended consequences, such as reduced funding for "rich" districts, like Madison. Madison's spending has increased at an average rate of 5.25% over the past 20 years, while enrollment has remained essentially flat (though the student population has changed).

Posted by Jim Zellmer at January 28, 2008 8:58 AM
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