DALLAS - Gov. Ann Richards and Texas lawmakers are backing new school funding legislation that would revamp the controversial Robin Hood system for shifting $400 million to property-poor school districts.
The plan, which will be formally introduced Tuesday at the opening of a 30-day special session tackling school finance, would for the first time include provisions to meet local capital needs through using an idle state bond bank.
While drafts of the proposed legislation are not expected until Monday afternoon, bond lawyers say the governor's Fair Share Plan will drop the earlier measure's call for direct transfers of districts' tax revenues but will still aim at redistribution of wealth.
"It seems to be doing the same thing in the back door that they couldn't do in the front door," said Ray Hutchison, senior partner at Hutchison, Boyle, Brooks & Fisher in Dallas.
At a Wednesday afternoon news conference, Richards defended the redistribution plan as the best way to equalize funding among schools by the Texas Supreme Court's June 1, 1993, deadline. The courts have warned they will close schools if lawmakers fail to pass a plan on time that provides equal funding to the state's 1,054 districts.
Achieving equality by increasing school funds is impossible, she said. "Quite frankly, school finance is like dividing up your sweet old aunt's estate. Someone's always going to get coffee mugs when they really wanted the rolltop desk," the governor told reporters. "We all live under financial constraints. I would just love to tell you that we could find Aunt Molly's hidden gold bars, but they are not there."
Also attending the conference were Lieut. Gov. Bob Bullock and Speaker of the House Gib Lewis, D-Fort Worth, both supporters of the new measure.
The lack of increased state funding in the Fair Share Plan prompted warnings from educators and bond officials that the proposal could force as much as $3 billion in higher local property taxes over the next two years.
A key feature of the plan is elimination of 188 county education districts established last year to collect local property taxes and redistribute the funds among member school districts would be abolished.
In January, the Texas Supreme Court ruled the Robin Hood plan unconstitutional, saying it essentially created an illegal state property tax by mandating that local taxes be redistributed.
"It sounds like all they are looking to do is abolish the county education districts," said Chuck Kobdish, a partner at McCall, Parkhurst & Horton in Dallas. "It's still a share-the-wealth kind of deal. It's still Robin Hood. I don't see how you can call it anything else."
Like Robin Hood, the latest proposal would create a two-tiered funding system. On the first level, all schools would be given a basic allotment of $2,850 for a local tax rate of $1 per $1,000 of assessed valuation.
The second tier produces a guaranteed yield to schools. On tax levies of up to $1.50, Texas would guarantee school districts $15.60 per penny of tax per student.
While local voters can determine how much to tax themselves in the second tier, the law would redistribute a portion of this so-called enrichment tax from the state's wealthiest districts. The richest districts are those that gain $30 or more from every penny of taxes.
The second-tier sharing would be phased in beginning with a $1.05 tax next year; $1.10 in 1994; $1.19 in 1995; $1.29 in 1996; $1.39 in 1997; and reaching a maximum of $1.50 in 1998.
Whereas the Robin Hood plan forced the direct transfer of taxes from one district to another, the governor's plan would accomplish the same goal by requiring wealthier districts to pay their own contributions to the Texas Teacher Retirement System. The state now makes these contributions.
As part of an effort to finally end an eight-year court fight, lawmakers will be asked to put a proposed constitutional amendment on the spring ballot. Two-thirds of the House and Senate must approve the referendum.
The proposed constitutional amendment would establish a standard that requires 95% of state and local revenues in public education to be equalized - the standard proposed in the Fair Share Plan.
For the first time, the school funding law would include a component to help poor districts finance capital needs.
Using a plan drafted last year by Hutchison, lawmakers would convert a $750 million bond bank into a mechanism to subsidize school construction. The bond bank was created in 1989 with the original intent to serve as an alternative, low-cost financing source for the state's schools. Under the Hutchison plan, state-backed bonds would be used to pay for all or parts of projects in needy districts.
"It could be a very positive proposal," said Leon Johnson, senior vice president at First Southwest Co. of Dallas, the state's leading financial adviser to schools. "I'm all for it."