WIMBERLEY, Texas – Protests from this small school district nestled in the Texas Hill Country are reverberating across the state's school finance landscape. 

School board members – backed by parents and local business owners – have decided to say "no" when their payment comes due next month under the state's "Robin Hood" school funding law.

Wimberley is one of more than 160 high-wealth school districts – including several in the Dallas area – that are required to share their property tax revenue with other districts. But residents here insist that their students will suffer if they turn the money over to the state.

"We're not going to pay it," said Gary Pigg, vice president of the Wimberley school board and a small-business owner. "Our teachers are some of the lowest-paid in the area. Our buildings need massive repairs. We keep running a deficit – and they still want us to give money away.

"It's unconstitutional – and I'm ready to go to jail if I have to."

Mr. Pigg and the rest of the Wimberley school board voted last fall to withhold the payment of an estimated $3.1 million in local property taxes – one-sixth of the district's total revenue – that was supposed to be sent to the state under the share-the-wealth school finance law passed in 1993. The law was passed in response to a series of court orders calling for equalized funding among school districts.

The first payment this year from Wimberley is due Feb. 15, and Texas Education Agency officials and Wimberley schools Superintendent Dwain York have been looking for a way to avert the first instance of a school district refusing to share its property taxes under the 15-year-old law.

State Education Commissioner Robert Scott and the TEA have remained firm that if the situation can't be resolved, Mr. Scott will be required to take steps to dissolve the 2,000-student school district and annex it to a neighboring district, mostly likely the San Marcos or Hays school district.

"There is no option for the commissioner," said Debbie Ratcliffe, a spokeswoman for the education agency. "If they refuse to make payments, Wimberley must be consolidated with a lower-wealth district."

Some districts have threatened in the past to withhold payments, but none have done so.

Pay now or pay later

Local school officials from across the state have been closely watching the situation, sympathizing with Wimberley over its bleak financial picture, but also recognizing that it is required to surrender some of its revenue under a process called "recapture."

"I don't like to pay my income tax, but you have to pay it," said Clayton Downing, former superintendent of the Lewisville school district and president of the Texas School Coalition, which represents high-property-wealth districts.

"None of our districts are crazy about paying recapture, but as long as this is the law, there's no choice. You have to pay or there will be consequences. We understand their financial situation, but they're fighting the inevitable."

Lawmakers had hoped to do away with the unpopular Robin Hood system when they passed a massive school finance reform law in 2006, but the wide disparities in property wealth among districts made that impossible – so long as education funding continues to be heavily dependent on local property taxes.

The new system significantly reduced the amount of revenue taken from high-wealth districts – by almost half – but the figure is still expected to reach about $1.1 billion this year.

Mr. York, superintendent of Wimberley schools, said the designation of his district as high-wealth is misleading.

While most high-wealth districts have valuable commercial or industrial property, Wimberley has little of that except for the antique and specialty shops clustered in the center of town. Most of the property on the tax rolls is residential – and much of that is owned by retirees attracted to the area by its natural beauty and laid-back lifestyle.

"There's nothing in the school funding system that is positive for us. It's sucking the life out of our district," said Mr. York, who encouraged others to visit his school district and see for themselves that it is far from wealthy.

Last winter, for example, one of the district's two elementary schools had to use space heaters in several classrooms because parts couldn't be found for the campus' old heating system.

That same campus, Bowen Intermediate School, also has what teachers call the "portable jungle" – a collection of 20 portable classrooms scattered behind the overcrowded main building. And the stage in the gymnasium is no longer available for school events because it is being used for storage and also doubles as a lost-and-found room.

A $34 million bond package passed by voters last year – including funds to build a new elementary school – will eventually help, but there is no relief in sight for other pressing needs, according to Mr. York.

"We've cut out Spanish instruction for elementary students, eliminated some of our reading intervention programs, scaled back our music program, and my faculty has not had a decent raise in five years," he said.

The cutbacks have been particularly frustrating for the school board members because they have seen the beneficiaries of the Robin Hood system avoid such constraints.

"We're giving money to supposedly poor school districts that are giving their teachers raises every year, and in some cases, using that money to buy buses for their football teams," Mr. Pigg said.

Meanwhile, he added, Wimberley has been ranked "recognized," the second-highest rating, by the state, while some districts receiving Wimberley's property taxes have been rated "academically unacceptable. "

In discussions with state officials, Mr. York said, "They tell us our only hope is to either cut teachers or raise taxes. Those are two pretty pathetic answers."

Regarding the possibility of a tax hike, Mr. York noted that an increase would require voter approval – something that is not likely to happen with residents knowing that a big chunk of their money will be taken by the state.

Situation changed

Wayne Pierce of the Equity Center, a group that represents hundreds of low- and medium-wealth school districts, said Wimberley's predicament is more the result of a lack of adequate funding from the state than the Robin Hood system.

"We used to think all high-wealth school districts had lots of money. But the situation has changed, and many of those districts are now having difficulty making ends meet," he said.

Still, Mr. Pierce added, "If the state allowed a district to not pay its recapture funds, then you would have chaos in the system."

But such arguments don't impress the residents of Wimberley, who remain solidly behind the board's decision.

"We are right behind the school board on this," said Sue Hales, librarian at Wimberley Junior High School. "We are not what the state says we are. We don't have a lot of money in this district." The average home value, for example, is about $165,000.

Local businessman Jack Glover also has problems with the state taking so much property tax money out of the school district, particularly when teachers are underpaid compared with nearby districts.

"They need to raise our teacher salaries up and then maybe talk about how much of our money we can send out," said Mr. Glover, 83.

Local school officials said they will continue to negotiate with the state as the Feb. 15 deadline approaches, looking for common ground, such as a proposal to allow the district to stretch out its Robin Hood payments.

"The TEA is just as worried about this as we are," Mr. York said. "They know how bad it would look if they consolidate a recognized school district – one that has a 98 percent graduation rate – with a lesser district. What kind of message would that send?"