In 1984, a group of school districts filed suit (Edgewood v. Kirby), charging that the state's heavy reliance on property taxes to fund education resulted in expenditure differences that violated the Texas Constitution. The districts argued that the disparity in districts' property wealth limited the ability of less wealthy districts to raise adequate funds.
      After a trial in 1987 and appeals throughout the state court system, the Texas Supreme Court in 1989 ruled that the finance system violated the constitutional provision for an "efficient" system. The court noted that glaring disparities existed in the abilities of less wealthy school districts to raise revenues from property taxes because taxable property wealth varied greatly by district. The wealthiest district had over $14 million of property wealth per pupil, while the poorest had about $20,000.[2] As a result, less wealthy districts struggled to raise the revenue needed to fund programs that met the state's basic education requirements.
      In response to the Texas Supreme Court decision, the Legislature met in special session and passed, in June 1990, Senate Bill 1 (SB 1), a reform measure that provided more money for equalization but left intact the school finance system. Less wealthy districts appealed, and, in January 1991, the Texas Supreme Court struck down SB 1, holding that while SB 1 improved the school finance system it still did not restructure the system to ensure that less wealthy districts had substantially equal access to revenue from similar tax effort.
      Senate Bill 351 (SB 351), signed into law in April 1991, set up a system that would partially consolidate the tax bases of individual districts. It created 188 County Education Districts, which were countywide taxing entities encompassing several school districts, with cumulative property wealth no greater than $280,000 per pupil. These districts were to levy state-mandated property taxes and redistribute the revenues to their member districts on an equalized basis. This time the wealthy districts appealed, and in January 1992, the Texas Supreme Court ruled that SB 351 was unconstitutional because it (1) violated the state constitution provision that prohibits a state property tax, and (2) levied a school property tax without voter approval. The Texas Supreme Court gave the Legislature until June 1993, to create a new school finance system.[1]
      The Texas Legislature, in May 1993, passed a new measure, Senate Bill 7 (SB 7), in an attempt to develop a system that would meet the test of the State Supreme Court. In 1995, the Texas Supreme Court stated that "the Texas system passed constitutional muster" and has been in place since. 2 The new mechanism in SB 7 is a 'recapture' provision that created greater equality in property wealth among districts. The term 'recapture' refers to the exporting of locally raised property taxes from one or more school districts to be used elsewhere to equalize resources in a school finance system. [2] The Texas Education Agency has redistributed the following amounts for wealth equalization:

      This redistribution of funds, known as the "Robin Hood" system, attempts to ensure that all property wealth in the state is taxed more equitably. However, the redistribution of recaptured funds is unable to close the gap between rich and poor districts in their ability to raise money for students. Despite all these efforts, the majority of school districts are still unable to generate as much tax revenue per penny as wealthier districts. State aid is provided to lower wealth districts to guarantee they are able to generate $21 per weighted* student per penny of tax effort. However, wealthier districts are able to generate up to $28 per weighted student per penny of tax effort. Therefore, the majority of districts must tax at a higher rate to raise the same amount of money per student as the wealthiest districts. Many are not able to bear this tax burden.
     
* Students with special needs are weighted so schools receive more funding for the special services these students need.