Texas Property Tax Redistribution Program failure

greenspun.com : LUSENET : Economic History (and Related Observations) : One Thread

In 1994, Texas enacted a new redistribution program to finance its public schools. The funding scheme often lead to significant inequalities in the amount of money spent on education in different areas of the state. Poorer districts with a low property tax base had significantly fewer dollars to spend than wealthier districts. The hope of the new law was to equalize the amount of money school districts received with the goal of improving the quality of education in the poorer districts. Under the new program the primary source of funding for public schools would still come through property taxes. Poor districts however, would be guaranteed a minimum level of funding. Ay shortfall would be redistributed from wealthier districts. While funding for poorer districts has increase, the program has largely been considered a failure. The primary criticism is based on how the new law has affected the overall property tax base in Texas. Some estimates suggest that the law destroyed 81 billion in property wealth. Why would the property tax base fallen?

-- murad (muradp@yahoo.com), October 29, 2004


Because the amount of money used was still the same, only it was spread to more areas. For example, if you have $100 to give 10 friends movie tickets, they can all participate. However, if that same $100 was divided between 20 people, that same service could not be enjoyed by all.

-- Erik Peterson (erikp10@yahoo.com), February 22, 2005.

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