Recapture, the infamous, intimidating, complex school finance policy often referred to as “Robin Hood,” is just one piece of Texas’ school finance system.
Some people want it eliminated.
In 1876, Texas leaders decided it was the duty of the government to provide a system of free public schools for all students to receive an education.
In 1993, legislators were faced anew with the task of financing that system. They looked at the options and found that — much like today — they could impose a statewide property tax or income tax, or they could increase other taxes such as the sales, gas and business taxes.
Ultimately, lawmakers decided using local property tax gains and revenue to help fund public schools was the most reliable, efficient way to access wealth from across the state.
Two important points about recapture:
All schools experiencing growth in property values pay recapture, either by the state sending a smaller check (locals making up the difference) or the school sending the state some money — meaning the state gets the gains from any growth in property values anywhere in Texas.
A common misconception is that recaptured schools send any or all tax increase back to the state. But the state guarantees the same amount of money to all school districts that choose to raise their local taxes (capped at $1.17).
True, recaptured districts will send the excess collections to the state, but they are guaranteed the same yield for their tax dollar as what every other district receives. They may not have any more, but they won’t have any less.
Ultimately, recapture itself is not the problem and never has been.
One could argue the state’s over-reliance 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 to balance inequities.
In fact, recapture acts as a cost-savings mechanism for the state.
But let’s just suppose we do away with recapture. In order to do so, the state must 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.
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.
The bottom line is recapture exists because the system allows schools to have more funding than others due to higher local property values.
In short, even after paying recapture, it works to the advantage of those districts to have local property growth as a major driver in the system because they get more money that way.
What happens if the state ends recapture? Where will they find the extra money? How will they make up for the inefficiency that will cause?
If the state does away with recapture and chooses not to make up the difference, the guaranteed per-student basic allotment would be reduced from $5,140 to $4,908, a drop of $232 per student, for the more than 750 non-recaptured districts across the state.
That’s a drop of $92,800 in funding for a typical elementary school, enough to pay the salaries of two teachers.
If reliance on local property values is the problem, fix that. If the state is not providing adequate funding for schools to meet state standards and local needs, fix that.
But to claim the policy that guarantees schools the same level of funding — nothing more, but nothing less — is a problem? Since when is a policy that ensures efficiency and savings to the state budget a problem?
Ray Freeman is deputy executive director of the Equity Center, which represents the interests of Texas taxpayers and children in school districts underfunded by the state’s school finance system.