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Texas School Funding System Overturned Again

by Foy Mitchell, Dallas, October 2014


Texas spends $60 billion a year on its public schools, which includes billions in local property tax revenue. For the second time in 18 months, a state judge has ruled the current school finance system is unfair, inadequate, and unconstitutional.


An Ongoing Problem


The fight over how to pay for Texas public schools has been going on for decades. Most recently, lawsuits were triggered by massive funding reductions in 2011. Lawmakers didn't anticipate the growing number of students, which led to a sharp drop in per-pupil expenditures. It forced the elimination of 11,000 teaching jobs and increased class size throughout the state.


In February 2013, State District Judge John Dietz found the system unconstitutional. He withheld his final decision in the case after legislative leaders indicated they would address the issue in their 2013 session. Even though the Legislature increased school funding, many districts are still receiving less per student than they did before the 2011 cuts.


Key Points in the Lawsuit


The 600 school districts that filed suit argued the system distributes money inequitably and Judge Dietz concurred. He said inequities leave lower-wealth school districts with far less money to spend on their pupils than their wealthier counterparts across the state.


School districts also charged they were not receiving enough money to pay for programs to meet state standards. Dietz agreed, saying that all available measures show the amount of money in the system isn't enough to properly educate students.


Finally, the public schools complained they lack the ability to raise needed funds on their own because they've maxed out what they can tax property owners under state law. The judge described school property tax rates as stuck at both a floor and a ceiling. Schools must tax at the state-ordered cap of $1.17 per $100 valuation to meet state standards, but they can't go any further to enhance local programs, he wrote.


The Next Step


Judge Dietz ordered public school funding to stop beginning next July until the problems are corrected. The state plans to appeal the ruling, probably straight to the Texas Supreme Court.


"The state will appeal and will defend this law, just as it defends all laws enacted by the Legislature when they are challenged in court," a spokesman for the attorney general said in a written statement.


If the Texas Supreme Court affirms Dietz's ruling, it will force the Legislature to come up with a new more equitable school funding plan. Officials say that will probably not occur until after the Legislature reconvenes in January.