More Than 150 Districts Sue the State Over Inequitable, Arbitrary Funding

More Than 150 Districts Sue the State Over Inequitable, Arbitrary Funding

The first of several anticipated legal challenges to the state’s school-finance system was filed today in Austin by a coalition of more than 150 school districts, along with individual taxpayers and parents. The biggest of seven districts named as original plaintiffs against the state is San Antonio ISD.


The Equity Center, the Austin-based research and advocacy center for lower-wealth districts that is coordinating the lawsuit filed today, put the thrust of the case in simple terms:  “This lawsuit comes at a crucial time in the history of public education in Texas. School districts, taxpayers and students are being treated unfairly by our current system, and it’s time to stand up and fight.”

Inequity in the distribution of school funding among 1,000-plus school districts is the main target of the lawsuit. The petition filed in state district court in Travis County says the state’s “funding for public education had already become an arbitrary hodge-podge of approaches rather than a coherent system” even before the deep cuts in funding and changes in the funding structure enacted this year. The result has been “huge differences in yields for similar tax effort that gave property-wealthy districts unconstitutionally greater access to educational dollars,” say the plaintiffs. They add:  “This constitutional inefficiency was compounded in 2011 by SB 1 passed by the 82nd Legislature which reduced school funding formulas by $4 billion in addition to other cuts in excess of $1 billion.” Cuts inflicted by lawmakers on the “haves” and “have-nots” alike inevitably involve harsher impacts for those disadvantaged to begin with, the plaintiffs argue.

Equity is not the only focus of the lawsuit. The districts suing the state also contend that the legislature in effect has imposed an unconstitutional statewide property tax, because districts have to tax at the maximum rate allowed by the legislature in the effort to meet basic state requirements. In effect, they say, the state-imposed cap of $1.17 per $100 on districts’ property taxes for school operations “is both a floor and ceiling leaving the districts with no meaningful discretion.”

The districts’ case also alleges that the state has imposed ever higher academic standards for all Texas students but has failed to assure all districts of the resources needed to help their students meet those standards.  They say the “differences in funding for districts…cannot be explained without resorting to an answer that is nothing more than ‘that’s the way we (the Legislature) wanted to do it.’”

A goal of the lawsuit is to get a definitive court ruling before the legislature meets again in regular session in January 2013.  

Another Line of Legal Attack on State’s System of School Finance

A new line of attack on the state’s system of school finance is in the works.  The legal/consulting team of school-law attorney David Thompson and school-finance experts Lynn Moak and Dan Casey will not focus on the inequity of funding levels among districts; that particular angle of attack they will leave to lower-wealth school districts recruited to join the impending legal fray by the Austin-based Equity Center. The Thompson team, backed by comparatively higher-wealth districts, will concentrate on three other legal weaknesses of the current system:

--Inadequacy of funding.  A lawsuit rationale distributed last week by Thompson notes that the Texas Supreme Court came close to finding the school-finance system constitutionally inadequate in 2005.  The court said then: “it remain[ed] to be seen whether the system’s predicted drift toward constitutional inadequacy will be avoided by legislative reaction to widespread calls for changes.” Since then, Thompson says, the state has increased performance requirements for schools and students even as it made “dramatic reductions” in “funding for specific programs that the Legislature itself has identified as necessary to help the growing population of at-risk students in Texas reach these higher standards.”

He says “it is as if, over a five-year period from 2006-2011, the State has responded to the Court’s decision declaring the system unconstitutional by raising standards and requirements without sufficient additional resources. Would this response have been acceptable in 2006? We believe the answer is clearly no. So, why should this response be acceptable today?”

--Unlawful statewide property tax. The Texas Supreme Court said in 2005 that the state was enforcing an unconstitutional state property tax because districts lacked “meaningful discretion” over their tax rate—they were forced to tax at the maximum rate allowed in their effort to meet state mandates.  “At present,” the Thompson rationale says, “a majority of districts in Texas find themselves with significantly increased State requirements as compared to 2005 and with little discretion remaining other than to cut programs important to parents and students.”

--Arbitrary funding levels.  In 2006 the state responded to the Supreme Court with a “temporary” school-finance fix that ever since has locked districts into a “target revenue” system leaving them with widely varying funding levels.  These funding levels “have become arbitrary and not reasonably connected to the State’s own high requirements for all students,” and the system therefore “is not sufficient or suitable” as required by the state constitution, says Thompson. Conclusion:  “[T]he ‘temporary’ target revenue system…has become a permanent funding system that assigns different levels of money to students in different school districts without regard for the actual costs of educating a growing and increasingly diverse and poor student population.”