History
of 'Robin Hood' Finance System
Since the 1970s, the State of
Texas has been involved with lawsuits challenging the system of financing
public schools. Following is a chronology of the funding dilemma, its
impact on Plano ISD and Plano ISD's legislative programs to address the
issue. See also on this Web site, a history of Plano ISD's recapture
payments to
the state due to Robin Hood.
1987 - School Funding System Declared
Unconstitutional
In 1987, the courts declared the
system unconstitutional according to standards of the Texas Constitution. The ruling focused not only on
operating revenues and expenditures, but also on facilities and capital
financing. In the ensuing years, the Legislature has tried to remain
a step ahead of the courts, but has had several efforts at satisfying the
requirements of the Constitution found unconstitutional.
In 1992,
the Supreme Court of Texas found Senate Bill 351, passed by the Legislature
in 1991, to be unconstitutional in that it imposed a statewide property
tax by creating "county education districts" (CEDs). A state property tax is prohibited
by the Texas Constitution. Following this ruling, the Legislature
called a referendum to constitutionalize the provisions of Senate Bill
351 and the CEDs. The voters of the state turned down the referendum
issues, with 63% saying no.
1993 - Senate Bill 7 Challenged
by Texas School Districts
The next effort at meeting the
tests of equity, Senate Bill 7, passed by the Texas Legislature in 1993,
was
challenged by property-poor school districts as well as property-wealthy
districts. Points litigated include the equity issue, the capital
financing issues, and issues of adequacy and suitability.
1995 - School Districts Ordered
to Give Up Excess Wealth
The Texas Supreme Court ruled,
in January 1995, that the law was constitutional at the time, but could
become unconstitutional unless changes were made in the law over the next
several years. Senate
Bill 7 mandated that all districts having a wealth per weighted student
(WADA) exceeding $280,000
must give up that excess wealth in one of several manners:
- consolidation
with a property-poor district such that the combined wealth is less
than $280,000 per WADA;
- tax base consolidation with
a property-poor district such that the combined wealth is less than
$280,000 per WADA;
- purchase
of attendance credits from the State to reduce the wealth to
less than $280,000 per WADA;
- purchase of attendance credits
from a property-poor district to reduce the wealth to less than $280,000
per WADA; or
- disannexation of property
from a property-wealthy district to reduce the wealth to less
than $280,000 and attachment of that property to a property-poor
district.
1995 - Senate Bill 1 - Rewrite of Texas
Education Code
In 1995, the Texas Legislature
passed Senate Bill 1, which rewrote the entire Texas Education Code. This
new law made very few changes to the school financing provisions.
1997 - Legislature Revises 'Recapture'
Formula
During
the 1997 legislative session, the Texas Legislature revised the formula
for calculating the recapture amount to exclude taxes collected for debt
service from the calculation. The voters approved an additional $10,000
homestead exemption in August 1998. The 1997 legislature included
provisions in the revised recapture calculation to hold the District
harmless from any lost tax revenues caused by the loss in taxable value
due to the
increased homestead exemption.
1999 - House Bill 4 Provides Some Relief to Plano ISD
In the 1999 legislative session,
the Texas Legislature passed House Bill 4. This new law increased
the wealth per weighted student (WADA) that districts may retain to $295,000.
This $15,000 increase in wealth per weighted student represents the first
increase
since Senate Bill 7 was enacted in 1993. This minimal adjustment
to the wealth per weighted student provides some relief to the District
regarding its equalization efforts.
2001 - House Bill 3343 Passes / Committee to Study Public School
Finance
During the 2001 legislative session,
the Texas Legislature passed House Bill 3343. This new law increased
the wealth per weighted student (WADA) that districts may retain to $300,000
for 2001-02 and to $305,000 for 2002-03. During the legislative session
the Legislature agreed to name an interim committee following the session
to study public school finance in Texas. In September 2001 the Lieutenant
Governor and Speaker of the House appointed this committee.
The committee was charged
with conducting a comprehensive review of the structure of the Texas public
school finance system, including facilities and transportation issues;
the method used to fund public schools; and the criteria used to determine
state payments to school districts.
The legislative leaders have also
instructed the committee to carefully consider all of the equity issues
that govern public school finance and fully examine all of the revenue
resources for funding public schools, including the state's property tax
system.
2003 - Joint Select Committee on Public School Finance Reports Findings
The Joint
Select Committee on Public School Finance reported its findings to the Legislature for consideration
in the regular Legislative
Session in 2003. However, the Legislative Session in 2003 produced
no new funding system.
2004 - Governor Calls Special Session on School Finance
In the spring of 2004, the Governor
called a Special Session of the legislature. Reports were posted by Plano ISD to inform and update the community regarding the
Texas
Legislature's Special Session on School Finance.
The impact on the operations of
the Plano Independent School District of these efforts at equalization
has been serious. Cumulatively since the inception of these equalization
efforts, the District has purchased over $599 million in attendance credits
from the State and other districts within the State. The District
is at the tax-rate maximum of $1.50 for the general operating fund. Plano
ISD has joined some 100 school districts in the state challenging the law's
constitutionality.
The District's financial planning
for the next several years takes into account the effects of possible court
and legislative actions in order to address the continued impact of recapture
of local funds without negatively impacting the quality of the District's
educational program. However, due to continued loss of funds, the
District reduced staff and made other cuts totaling $17 million in
the 2004-05 budget.
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