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 website's budget page, a chart detailing Plano ISD's recapture payment history 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: 

1. consolidation with a property-poor district such that the combined wealth is less than $280,000 per WADA;
2. tax base consolidation with a property-poor district such that the combined wealth is less than $280,000 per WADA;
3. purchase of attendance credits from the State to reduce the wealth to less than $280,000 per WADA;
4. purchase of attendance credits from a property-poor district to reduce the wealth to less than $280,000 per WADA; or
5. 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.

The West Orange Cove school finance court case culminated in September 2004, when State District Judge John Dietz ruled in favor of plaintiffs, entering an injunction shortly thereafter which gave the state one year to address an inadequate school finance system. Plano ISD was among the 300 school districts serving as plaintiffs in the case.

2005 - Special Session on School Finance & Supreme Court Ruling

The Texas Legislature culminated its 79th regular session in May, failing to adopt a new state school funding system as ordered by Judge Dietz. Subsequently, Governor Rick Perry called legislators into a special session on school finance in July. Oral arguments were heard before the Texas Supreme Court

In late July, House Bill 2 and the amendment proposed by Education Chair Rep. Kent Grusendorf was released by the Texas Legislature for public review. The impact of this legislative action would result in a deficit budget for Plano ISD in the 2005-2006 school year.

On November 22, in a 7–1 opinion, the Texas Supreme Court struck down the school finance system, finding that it had evolved into an unconstitutional state property tax. The court gave the legislature until June 1, 2006, to address the constitutional deficiencies in the system.

2006 - Strides Made in Public School Finance System

In April, the Texas State Legislature conducted a special session on school finance. By August, Plano ISD reported that strides had been made resulting from the special session. Plano ISD maintained a high profile and level of involvement in the attempt to represent the local community of children and those in the state to bring a more equitable finance plan for all Texas school children.

A 2006-07 Plano ISD initiative, adopted by trustees, was the continued monitoring of the financial position of the district as it related to the state requirement of 65% of the operating budget being spent on instructional programs. The law is for a three-year phase-in of this requirement. The 2006-07 Goals 13 State standard is 55% for 2006-07, 60% for 2007-08, and 65% for 2008-09. The board of trustees adopted a 2006-07 general operating budget that allocated over 69% to instructional programs that are in the state criteria for this legislation. However, the latest interpretation that includes food services in the calculation had the district at 61.5%.

2007 - Regular State Legislative Session

A group of Collin County leaders traveled to Austin February 19 and 20 to discuss legislative issues with state elected officials, as part of the biennial program “Collin County Day in Austin.” Topping the list of priorities for Plano ISD representatives were the topics of school vouchers, school funding, enrichment tax rate, end of course tests, 4x4 curriculum and online course funding.