America's Property Tax Advisor

Texas Supreme Court Upholds School Funding Plan


For more than three decades, lawsuits have challenged the way Texas public schools are funded. In May, the Texas Supreme Court ruled that while the system is not perfect, it is constitutional.


This decision means that lawmakers won't have to devise a new system. Nevertheless, two House committees are studying school funding issues in advance of the Legislature's 2017 session.


Room for Improvement


In its ruling, justices noted that the school funding system is "undeniably imperfect with immense room for improvement. But it satisfies minimum constitutional requirements. Accordingly, we decline to usurp legislative authority. Our judicial responsibility is not to second guess or micromanage Texas education policy."


The court reversed a lower judge's decision that sided with more than 600 school districts. The districts charged that the $5.4 billion in education cuts approved by state lawmakers in 2011 unfairly distributed tax dollars among wealthy districts and those with less property tax income. School districts in all parts of Texas were on the same side in the case. While those in economically challenged areas said funding was inadequate, wealthy districts argued that voters often refuse to approve local tax increases because a good portion of the money goes elsewhere.


Legislature Studies Recapture


Texas House Speaker Joe Straus ordered two House committees, Appropriations and Public Education, to continue studying education funding. A statement issued by his office said this will allow the House to take a thorough look at school finance when the Legislature convenes in January 2017.


Specifically, Straus told the committees to recommend ways to reverse the increasing reliance on recapture payments to fund public schools. Recapture funds are monies from wealthy school districts provided to the state for distribution to poor school districts. Recapture funding amounted to $1.2 billion in 2014, the latest year that figures are available from the Texas Education Agency.


The number of school districts having to share their property taxes with smaller, rural districts is growing. Houston, the state's largest school district, is entering that list. The Houston Independent School District faces a payment to the state of $175 million next year to help fund other districts.