In 1993, SB 7 created a two-tiered system to ensure school districts received state aid based on local property wealth per student and tax effort, essentially establishing financial equity for districts across the state. While SB 7 eliminated county education districts (CEDs), the bill limited school districts in each tier to $28 per student per penny of tax effort, or $280,000 of taxable property wealth per student.
All revenue raised by districts above this limit was subject to recapture, known as “Robin Hood”, to redistribute revenue according to property wealth. The bill further required districts exceeding the equalized wealth level to reduce the wealth in several different ways, including consolidating with another district and purchasing of average daily attendance credits. SB 7 also imposed a tax limit of $1.50 per $100 value on property for all school districts.