"Robin Hood" Faces Scrutiny Again in 2017 Session in Texas

The Texas Tribune reports that some property-rich districts are facing new challenges related to recapture this year, which means that pressure is mounting on the legislature to make changes to the system when it convenes in 2017."The frustration is particularly rife in the state’s largest school district, Houston, which is making its first-ever “recapture” payment this year because the state now considers it too property-wealthy. 

The obligation — estimated at more than $160 million — drove a $95 million shortfall the district is closing by cutting funding to some campuses, along with administrative and tutoring positions and a controversial teacher bonus program.Officials there are calling for a vigorous lobbying effort, as are those from other large and politically powerful school districts such as Austin, which has seen recapture payments skyrocket over the years amid rapid property value growth and declining student enrollment. 

The state’s sixth-largest district is expecting to send more than $400 million to the state this year." [see https://www.texastribune.org/2016/08/30/rich-schools-hope-houston-topples-robin-hood-plan/]The issue doesn't just affect large districts such as Houston. In fact, the Texas Tribune reports that this year will be the first year that some small districts in the Eagle Ford Shale - which experienced increased revenue during the recent oil boom - will have to make recapture payments. Unfortunately for these districts, the oil money is largely gone, leaving them with even bigger budget shortfalls than ever before.

 While seen as an unfair burden by some wealthy districts, recapture is seen by poorer districts as a vital, if flawed, mechanism to ensure equity in school funding across the state.In a recent column in the TribTalk blog, Ray Freeman, deputy executive director of the Equity Center, argued that recapture is a necessary aspect of the school funding system."[L]et’s just suppose we do away with recapture. In order to do so, the state must either increase the state budget significantly to make up for the loss in revenue — to the tune of $2 billion per year, according to TEA district recapture projections for fiscal year 2017 — or the state would need to come up with other revenue streams. 

Maybe they would decide a statewide property tax is the answer, or perhaps an income tax, or doubling the sales tax. Or maybe the revenue loss would be made up for by reductions in state spending across the board, in transportation, healthcare, water. Or perhaps just public education spending would suffer." [see https://www.tribtalk.org/2016/11/10/eliminating-the-texas-school-finance-stigma/]If the legislature chooses to make major overhauls to the system in the upcoming session, Freeman believes that they may have to look beyond recapture and consider bigger issues."Ultimately, recapture itself is not the problem 

— and never has been," Freeman wrote. "One could argue the state’s overreliance on local property values as a primary funding source for Texas schools is the problem, but as long as that is our system, recapture will be necessary." [see https://www.tribtalk.org/2016/11/10/eliminating-the-texas-school-finance-stigma/]ABOUT THE AUTHOR: Jake PoseyThe Posey Law Firm PC, led by Jake Posey, is a sharply focused government relations and business law firm based in Austin, Texas. 

The firm’s government relations practice advises clients and advocates for the successful development of public policy in the legislative, judicial, and executive branches of Texas government.Representing Fortune 500 companies, respected market leaders, and some of Texas’ leading state associations, Mr. Posey’s mission is to diligently deliver strategic business, political and legal solutions for his clients.