12:00 p.m., Wednesday, July 20, 2005

Austin, TX - House and Senate conferees agreed yesterday to a 38% cap on Robin Hood recapture, the dollars "property wealthy" school districts must forfeit to the state. Many thanks to those who communicated their thoughts to Senate leaders in recent days. Each legislative chamber must now approve HB 2 in an up or down vote by midnight tonight.

"For the first time in 12 years, there would be a limit to what Robin Hood can take from school districts. Robin Hood was only supposed to be a temporary fix - a Band-Aid solution," said Rep. Dan Branch. "Before House Bill 2, HPISD is sending nearly 75% of its local tax dollars to Austin. If the bill passes each chamber a final time, HPISD's Robin Hood payments will dramatically decrease."

In addition to the phased-in 38% cap on recapture, the conference committee version of HB 2 provides substantial immediate relief from the scourge of Robin Hood:

• Property tax relief - anticipated reductions of approximately 25 cents in 2006, approximately 30-35 cents in 2007, and additional buy-downs from budget surpluses will reduce reliance on this local funding source.
• State's share increase - the state's contribution to total public education funding will improve from 37% to more than 55%.
• Un-recaptured local enrichment - a "property wealthy" district can retain 100% of its tax revenues under this extra tier of funding by choosing to levy up to 15 cents of additional taxes beyond the foundation tier of funding.
• Full recognition of the Local Option Homestead Exemption - the state will no longer penalize "property wealthy" districts like HPISD with a phantom recapture tax for offering this tax relief to their taxpayers.
• Phased-in inflation adjustments through implementing an updated cost of education index.

House Bill 3 or a similar tax bill must pass the Legislature in a subsequent session before HB 2 can take effect. The Governor has suggested that he plans to immediately call the Legislature into a second special session to pass the tax reform.