Long-time Locke friend Virginia Postrel has a vital column in today’s NYT on school-funding deep in the heart of Texas. Basically, it is a mess.
The plan that was supposed to “equalize” school funding between rich and poor districts has instead caused a cash-crunch across the state, Virginia explains. The mechanism by which rich districts send their “excess” property tax collections to the state depresses property values in those districts as it is hard to get people to pay for something that they do not get.
Back when this “Robin Hood” plan was under discussion it was the biggest deal in state-tax policy and I distinctly recall asking people involved in it at the time how would home-buyers react to the prospect of not getting all the school system they were paying for. Not to worry, was the reply, they’ll always be strong enough demand for those houses in those neighborhoods to keep property values up. Evidently not.
I firmly believe the interaction of property taxes, housing values, and public education has been insufficiently studied over the years. I witnessed plainly irrational behavior in the housing market in Montgomery County, Maryland where parents would absolutely pay anything for a house if it was in the “right” school cluster. This essentially locks school districts into mini intra-district Robin Hood plans, taking resources from the wealthy enclaves and shifting it to the poorer ones.
The hope is that this can be done without reaching some tipping point where property owners decide they are no longer getting their money’s worth for their taxes. They then begin to consider alternatives, and moving is often the easiest and cheapest option.
So? Maybe property taxes cause sprawl.
