Robin Hood plan


The Robin Hood Plan is a colloquialism given to a provision of Texas Senate Bill 7 , originally enacted by the U.S. state of Texas in 1993 to provide equity of school financing within all school districts in the state of Texas. The plan is now codified within the Texas Education Code as Section 49.002.
The original bill was passed in response to numerous court rulings that previous financing schemes were in violation of the Texas Constitution's requirements regarding what constitutes "an efficient system of public free schools" as that provision interacts with another provision prohibiting a statewide ad valorem property tax. Though the legislation has been revised since then, its basic premise remains the same: it limits both the amounts that school districts can both spend on public schools and the amounts that they can raise through locally assessed property taxes and further requires that any amounts in excess be "recaptured" by the state and given to other districts which are unable to raise the required revenue.

Constitutional and Statutory Requirements

Article 7, Section 1, of the Texas Constitution states:
However, state funding is constrained, in part, by Article 8, Section 1-e, of the Texas Constitution, which states:
As such, and because Texas has no personal income tax, the Legislature has been required to provide other sources of dedicated revenue for to fund public education. Some of the more prominent ones are:
  • Dedicating specified proceeds from the Permanent School Fund
  • Dedicating 25% of all motor fuels taxes collected
  • Dedicating 25% of all business occupational taxes collected
  • Dedicating net proceeds from the Texas Lottery
Otherwise, outside of other minor dedicated revenue sources, public education funding is primarily provided by Legislative appropriations, and a school district's ability to assess property taxes in amounts sufficient to provide an adequate education. The ability of local school districts, specifically those which are "property poor", when considered in conjunction with the Constitutional requirement to provide an adequate education and the prohibition against a statewide property tax, have formed the bases for the numerous lawsuits against the State of Texas, claiming violations.

Local Property Taxes in Texas

Property taxes in Texas consist of two components:
  • The largest component is for maintenance and operations. This portion of the tax rate funds teacher, administrative, and other district employee salaries, educational materials used in classrooms, utilities, and routine facility maintenance including minor construction projects. M&O rates consist of two tiers of funding:
  • *Tier I funding is based on a series of state-mandated funding amounts. The predominant one is the per-student allotment, which is then multiplied by a series of weights depending on the student's educational level and other factors. Additional amounts are provided for student success and to cover transportation costs. The sum of all these amounts is then compared to a state-mandated funding cap. Amounts below the calculated sum are made up by the state; amounts in excess are subject to recapture. for Federal land holdings within a district
  • *School districts then have the option to increase the tax rate by up to $0.17/$100 above their MCR to provide "Tier II Enrichment" funding. The funding can only be used for M&O, not for capital projects. The funding consists of two levels, each resulting in differing levels of funding, requiring different levels of approval, and differing in their interplay with recapture:
  • **A district can propose an increase of up to $0.08/$100 above the MCR. This rate provides a guaranteed yield. If the tax increase does not provide the stated yield, the state makes up the difference; if the tax increase results in more than the yield, it is not subject to recapture. The district's board can increase the rate by up to five "golden pennies" solely on its own action by majority vote; the remaining three pennies require voter approval in what is officially termed a Voter Approved Tax-Rate Ratification Election or VATRE'''. Once the voters approve a VATRE, the board can continue to assess at the approved rate without further voter approval.
  • **After assessing the maximum eight "golden pennies", a district can then propose up to an additional $0.09/$100 above the MCR. This rate provides a lower, non-guaranteed yield and is subject to recapture. These pennies require voter approval via VATRE.
  • The final component of the tax rate is for "interest and sinking fund". These funds allow districts to issue bonds for major improvements such as land acquisition, new or major renovations to schools, technology purchases or performing arts centers and/or sports facilities, and can only be used for such, not for M&O. These funds are not subject to recapture but are capped at $0.50/$100, except that if the district's property value would fall to a level where the maximum rate would not prevent default, the cap can be exceeded.
  • *Prior to 2019, districts in Texas would frequently combine all desired capital improvements into one bond package. Since voters grew tired of having bond money for schools tied to a district's desire for a state-of-the-art football stadium, the law was changed to require sports facilities to be separate proposals from general school items.

    Lawsuits and Legislative Actions

School finance lawsuits must take place in state court, since the U.S. Supreme Court ruled in 1973 that education is not a fundamental right protected by the U.S. Constitution. However, in response, between 1975 and 1977 the Legislature increased the minimum teacher salary schedule and increased the number of instructional days required.

''Edgewood I''

The first of the initial four lawsuits which would ultimately give rise to Robin Hood would be filed in May 1984 against then state Commissioner of Education William Kirby by the Mexican American Legal Defense and Educational Fund, citing discrimination against students in poor school districts. Edgewood ISD charged that the state's methods of funding public schools, which resulted in a wide variation of funding between districts, violated the Texas Constitution. The Texas Supreme Court would rule in October 1989 that the funding mechanisms in place were in violation of the Texas Constitution, ruling that an "efficient system" required "substantially equal access to similar levels of revenue per pupil at similar levels of tax effort".
In response, the Legislature passed legislation increasing the state's basic allotment and guaranteed yield to provide equalization at the 95th percentile, but specifically excluded the state's most "property wealthy" districts from the requirements.

''Edgewood II''

The exclusion of the wealthiest school districts from the requirement led Edgewood ISD to again file suit against Commissioner Kirby, this time in September 1990. Once again, the Texas Supreme Court ruled in the district's favor, determining in January 1991 that excluding the wealthy districts made the legislation unconstitutional. One month later, the Court would later issue a "advisory opinion", stating that once the Legislature created an "efficient system", it may authorize local enrichment upon voter approval.
The Legislature responded by creating 188 "County Education Districts", designed to equalize the tax base by consolidating property-wealthy districts with property-poor ones.

''Edgewood III''

The creation of the County Education Districts would lead Edgewood ISD into court yet again. But this time, it would be the defendant in a June 1991 suit brought by the Carrollton-Farmers Branch Independent School District, which argued that the districts were unconstitutional. The Court would rule in January 1992, agreeing that the districts were unconstitutional.
The Legislature responded by proposing a constitutional amendment to allow for the "County Education Districts"; however, the amendment was rejected by voters. It also passed Senate Bill 7 with the "Robin Hood" aspect. Senate Bill 7 also, for the first time, introduced a state-mandated limit on M&O tax rates, capping them at $1.50/$100 valuation, which would later become the subject of its own court battle.
Under recapture, a "property wealthy" district finding itself with more tax revenue than allowed, could choose from one of five options to reduce or eliminate the amount owed:
  1. Consolidate with a "property poor" district,
  2. Detach a portion of its tax base and transfer it to a "property poor" district,
  3. Purchase “attendance credits” from the state which provides the district with a sufficient number of students to reduce the district's local revenue level to a level that is equal to or less than the district's entitlement,
  4. Contract with a "property poor" district to educate a sufficient number of non-resident students to provide the district with a sufficient number of students to reduce the district's local revenue level to a level that is equal to or less than the district's entitlement, or
  5. Consolidate tax bases with a "property poor" district.
No school district has ever chosen Options 1, 2, or 5 to avoid recapture. Every district has chosen Options 3 or 4 or a combination of the two.

''Edgewood IV''

The Robin Hood plan would face yet another court challenge in June 1993, this time by two different sets of parties arguing two opposite positions:
  • Edgewood ISD argued that the plan still didn't accomplish constitutional requirements.
  • On the other side, a group of "property wealthy" districts argued that the recapture mechanism was, itself, unconstitutional.
In January 1995 the Texas Supreme Court would, for a time, end the ongoing battle over school finance, ruling that the Robin Hood plan met constitutional requirements.