The Robin Hood Plan is a colloquialism given to a provision of Texas Senate Bill 7 (73rd Texas Legislature) (the provision is officially referred to as "recapture"), originally enacted by the U.S. state of Texas in 1993 (and revised frequently since then) to provide equity of school financing within all school districts in the state of Texas.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 (both Federal and state, notably the Texas Supreme Court's ruling in Edgewood Independent School District v. Kirby) 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 (which it repeatedly mentions when encouraging businesses and individuals to relocate), 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 (which are transferred into the Available School Fund) Dedicating 25% of all motor fuels taxes collected Dedicating 25% of all business occupational taxes collected Dedicating net proceeds (after payout of prizes, operating costs, and specified transfers for veterans' assistance) 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 (M&O). 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 (set at $6,160/student as of 2023; the amount is set by statuteThe statute requires that, if the district sets a tax rate below its "maximum compressed rate" (MCR), which is calculated by the state, the allotment is proportionally reduced. Texas uses the term "tax compression" to denote a state-mandated lowering of the capped rate. and notably is not indexed for inflation, which has been the subject of much political debate within Texas), which is then multiplied by a series of weights depending on the student's educational level and other factors.A weighting of 1.00 is for a student who is progressing satisfactorily at his/her grade level (not having learning challenges nor being talented and gifted), whose primary language is English, who is not in an "educationally disadvantaged" home (the term is used for what is otherwise called "economically disadvantaged"), and who is not otherwise at risk of dropping out (such as a pregnant teenager). Higher weightings, and/or add-on weightings, are used for students who fit in one or more categories which are considered "at-risk" of poor performance and eventually dropping out before graduation. Additional amounts are provided for student successFor example, an educationally disadvantaged student who passes the ASVAB and subsequently enlists in the military, will earn the district an additional $5,000. and to cover transportation costs. The sum of all these amounts is then compared to a state-mandated funding cap (calculated as the taxable value of all property within a district – regardless of whether the property can be taxed at full value or even at all – multiplied by the maximum compressed rate, or MCR). Amounts below the calculated sum are made up by the state; amounts in excess are subject to recapture. (Funds received from federal sources—such as payments in lieu of taxes (PILOTs) for Federal land holdings within a district (such as an Army Corps of Engineers lake) or Federal funding for child nutrition programs, along with any private donations received,Nearly all school districts have an "educational foundation", a legally separate 501(c)(3) non-profit entity, associated with them. These entities raise donations for various school projects and provide funding to the district. are not subject to recapture.) 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 ($7.9 million as of 2023). 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 (thus it is often referred to colloquially as "golden pennies"). The district's board can increase the rate by up to five "golden pennies" solely on its own action by majority vote;A provision applicable for only the 2020-2021 school year required unanimous board consent for the fifth "golden penny". the remaining three pennies require voter approval in what is officially termed a Voter Approved Tax-Rate Ratification Election or VATRE (pronounced "vater"). Once the voters approve a VATRE, the board can continue to assess at the approved rate without further voter approval (unless less than the maximum three pennies were approved). 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 ($3.9 million as of 2023) and is subject to recapture (thus it is often referred to colloquially as "copper pennies"). These pennies require voter approval via VATRE (it can be combined with a VATRE for "golden pennies", and again does not require further voter approval unless less than the maximum nine pennies were approved). The final component of the tax rate is for "interest and sinking fund" (I&S). These funds allow districts to issue bonds for major improvements such as land acquisition, new or major renovations to schools, technology purchases (computers and supporting infrastructure) 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 (notwithstanding the popularity of high school football in Texas), 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 (San Antonio v. Rodriguez, a case which originated in Texas). 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 (all of which would involve the Edgewood Independent School District of Bexar County, Texas, a low-income school district in San Antonio) 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 (rare) "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 (a district north of Dallas), 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 (or combinations thereof) to reduce or eliminate the amount owed: Consolidate with a "property poor" district (thus resulting in only one remaining district), Detach a portion of its tax base and transfer it to a "property poor" district,