I don't know, maybe the world really did come to an end this weekend. The Texas legislature not only came to an agreement on a $165 billion two-year budget to address the state's $27 billion deficit, but it did so by raiding only 30% of its $10 billion rainy-day fund, and without raising taxes, while slashing the previous two-year budget by over 12%.
Still on the legislature's near-term agenda, especially in light of the cuts in education spending: a bill to address our crazy school-finance system. The Texas Constitution requires the legislature to fund a "free" and "efficient" public eduction system. (The legislature's only other constitutional mandate is to pass a budget.) A decade ago, a judge ruled that the traditional reliance on local ad valorem taxes did not pass constitutional muster, apparently because the word "efficient" turned out on close inspection to mean "uniform statewide, unrelated to the resources or desires of local populations." Because the Texas Constitution also prohibits a statewide ad valorem tax, and because there has never been any appetite here to fund schools via any other variety of statewide tax (we have no income tax here, for instance), the powers-that-be crafted a universally reviled mechanism known as the "Robin Hood" school finance system.
Robin Hood doesn't simply require rich school districts to donate all tax revenues over some average per-student level to poorer districts. Instead, it is a confusing wealth-based system in which "excessive tax wealth" is defined by taxable property within each district divided by the number of students attending public school there. If a district has lots of commercial property, or expensive vacation or retirement residential property, it can reach Robin Hood status despite having a higher-than-average proportion of low-income students, and in fact without any regard to its actual level of tax revenues. The Houston and Dallas districts, for instance, have both long since crossed the Robin Hood line even though more than 3/4 of their student bodies are considered economically disadvantaged. Districts in this unenviable position find themselves sending anywhere from a few percent to over half of their school tax revenues to the state for redistribution among "poorer" districts. (The formula is so confusing that, although I've been trying to read up on it for the last week, I am completely at a loss.) Nor can a Robin Hood district escape its status by lowering its taxes; only a devaluation of its total taxable property could achieve that aim. A tax cut would reduce the amount of tax income subject to redistribution, but not the percentage confiscated by the state.
One possibly unintended result: when real estate buyers no longer see a strong link between location and a secure source of funding for excellent local schools, property values drop:
[T]he Robin Hood system is anything but financially efficient. Robin Hood does not just move money from rich school districts to poor school districts. It does so in a way that destroys far more wealth than it transfers, and that erodes the tax base on which school funding depends. . . . ''Our estimates suggest that Robin Hood caused Texas to lose a net of $27,000 per pupil in property wealth,'' . . .
My little county (the smallest in Texas) is a Robin Hood district on the strength of its vacation and retirement housing stock. Our voters have just approved a $26 million bond to fund repairs to crumbling school buildings; in the last six years, we've lost $36 million in local ad valorem tax revenues to the Robin Hood system. A quirk of the system is that taxes earmarked to repay construction bonds are immune to confiscation. Unfortunately, there is no prospect of a decrease in our local ordinary ad valorem school taxes to defray the tax hike we'll need to repay the bond.
Changes in the law in 2006 ameliorated the Robin Hood problems to some degree and transferred a portion of the funding burden to statewide business taxes. Will the newly slimmed-down Texas budget hurt education here? I'm not convinced of the link between spending and good results in this field. In fact, I'm not completely sure there isn't an inverse relationship. Texas ranks 46th in spending among the states, but 4th- and 8th-grade math and reading proficiency levels are all above average. Where Texas does lag, apparently, is in SAT and ACT scores, a result that may say more about the ethnic composition of its students than anything else. The Texas Education Agency figures for 2008-09 show that Hispanic students (including many recent immigrants) account for 48% of public school enrollment and 65% of kindergarten enrollment. Texas still fares better than the national average in each ethnic group. Not bad for a porous-border state.
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