Vol 28, Issue 39 Print Issue

Frustrated by Legislature, Schools Go to Court

It's apparently impossible to do anything both legal and constructive to school finance without a judge waving a gavel at the Legislature.

The lawsuits are back for the sixth time in the last 40 years, carrying the issue that dominated Rick Perry's first years as governor: Is the state spending enough money, and distributing it fairly enough, to ensure that every kid in the state has a shot at an adequate public school education?

Legal arguments about school finance drove the search for revenue that ended with the 2006 rewrite of the state's business tax, along with increases and changes in a number of other revenue sources.

During the legislative session earlier this year, lawmakers added $4 billion to an education system that needed considerably more than that to keep up with inflation and enrollment growth. But the lawsuits were probably coming anyway, sooner or later.

The first suit comes from the Texas Taxpayer & Student Fairness Coalition, a growing group of school systems, parents and property taxpayers that started with seven districts and several individuals named in the filing. The opening line: "Before the 82nd Legislature convened in January 2011, Texas' funding for public education had already become an arbitrary hodge-podge of approaches rather than a coherent system." They contend it gave property-rich districts "unconstitutionally greater access to education dollars" and that the problem was compounded by the budgeting during this year's session. The cuts were disproportionately hard on property-poor districts, the suit says.

It's not all in the districts you might expect. Austin ISD and Fort Worth ISDs have the same $1 tax rate in Tier one, the suit says, but Austin has $1,000 more per student. "This difference in funding provides Austin ISD with $100 million per year more than the same tax effort makes available to Fort Worth ISD," the suit says.

This year's cuts put 45 percent of the school districts in Texas in a position where their state funding was cut by more than they're able to raise locally; they can't make up the difference even if their taxpayers are willing. They cite several examples of taxpayers in one district paying higher rates than their peers in other districts, even as their schools get less money per student. And they note that 200 of the state's school districts are taxing at the maximum rate of $1.17 per $1,000 property valuation. Another way of saying it: "...school districts in the top 15% by wealth (154 districts) in 2010-11 have $2,505,875,342 left in taxing capacity, but school districts in the bottom 15% by wealth in 2010-11 have $0 left in taxing capacity."

The poor districts don't have any discretion left, the suit says, leading them to charge that this is an unconstitutional state property tax. They can't charge more than the state limit, and they can't charge less.

This is the first of at least three school finance lawsuits in the works. They've been bubbling since before the current state budget was written, but the cuts in that budget ripened the legal arguments.