Recapture, which is also commonly known as ‘Robin Hood,’ began in 1993, when 33 school districts were subject to wealth equalization for a total amount of $130 million. Now the number of districts subject to recapture exceeds 400 in number and collectively those districts send more than $1.5 billion per year to the State of Texas.
Read more on the history of Recapture
The Gilmer Aikin Act, adopted by the Texas Legislature in 1949, established a public school finance system that, for the first time included funding from local tax bases. This revenue was to allow districts to supplement or enrich the program that the State provided. Over time, districts were forced to rely on local taxes for more than just supplementation, but to cover the cost of the basic operations.
Districts were forced to increase their tax rates to fund the basic programs when the state funding did not keep pace. Because Texas districts vary greatly in both size and property values, wealth per-student varied widely as well. For example, a small district serving 300 students with a nuclear power plant in their taxing jurisdiction had a much higher wealth per-student compared to a larger district serving 40,000 in a predominantly residential community.
In 1989, the Texas Supreme Court ruled in Edgewood I that the Texas system of school finance was inequitable. The State Legislature set out to remedy the problem with a new school finance system. After several failed attempts, the Supreme Court ruled in Edgewood IV that the system put in place by the Legislature in 1993 was constitutional. This new school finance system required that each property wealthy district help equalize funding by choosing from five different options by which they could “share their wealth.” By creating both a floor, or guaranteed yield that each district could achieve, and a ceiling, or a wealth limit that no district could exceed, the system was determined to have equalized funding.
In the beginning, only 33 school districts, serving less than 1 percent of the State’s students, were subject to recapture to equalize funding. In the 1993-94 school year, approximately $130 million was sent away from these 33 districts. As property values increased,the State Legislature was forced to increase the floor in order to maintain the equity in the system.
From 1993-2003, the state increased the funding elements of the school formulas each session. Therefore, the number of districts subject to recapture did not increase much during that time. By 2003,there were 105 Chapter 41 districts. However, beginning in 2003, the State stopped trying to keep pace, and the funding elements did not increase as they had in the past. Once this decision was made the number of recapture districts began to skyrocket. Today, we have 448 districts that qualify as Chapter 41 districts for the 2016-17 school year, with approximately 250 of those expected to pay recapture. The annual amount of recapture paid by districts exceeds $1.5 billion.
These two maps depict the growth of the number of Chapter 41 school districts over a 20 year period. In 1993, Texas had just over 30--33 small rural districts with oil & gas, refining or other industry that was driving their higher than normal property wealth. These districts encompassed only 1% of the students in the Texas Public School System. By 2013-14, there were well over over 300 Chapter 41 districts, and those districts were rural, urban and suburban, districts of all sizes, and many serving student populations with great needs.
The 356 Revenue-Contributing School Districts in Texas – through their local taxpayers – play a vital role in improving the quality of education for all schoolchildren in the state.
Chapter 41 districts in the Texas have added $20 billion to the state public education budget since 1993, with many districts giving up more than 50 percent of their locally raised tax dollars.
The number of Chapter 41 Districts is rising at an increasingly rapid pace, more than doubling in the five years from 2007-2012. It took 15 years to reach 164 Chapter 41 Districts, but only five years to add the next 200 Districts. This intensifying upward spiral has the potential to imperil the entire school finance system as more and more taxpayers have less incentive to locally raise new tax revenue for the state
For example, 38 Revenue-Contributing School Districts have added more than $100 million each to the statewide system, with some contributing more than $1 billion each. And, 53 Chapter 41School Districts are remitting from 50 percent to as much as 88 percent of their local tax revenue to the state. These taxpayers are asking, How much is enough?