Texas school finance lawsuits continue to grow

The plaintiffs all agree that current levels of state funding are inadequate.

Photo by Todd Wiseman

One consequence of the $5.4 billion cut to Texas public schools is already known: By the end of the year, there will likely be four school finance lawsuits filed against the state.

School districts are joining up left and right to sue, and when the cases head to trial — expected in the fall of 2012 — most Texas students will be represented in the courtroom. So we’ve developed a guide to keeping all the lawsuits and the issues straight.

First, it's important to remember that once in court, the cases most likely be consolidated into one, meaning the districts will share experts and discovery costs while maintaining their own lawyers. The districts are allies — they have a common opponent, the state — but all of their interests don't necessarily align. That's where the different lawyers come in.

Districts typically sue the state on three different grounds: efficiency, adequacy, and what's called “meaningful discretion.” The Texas Constitution requires that the state provide efficient and adequate funding for public schools. It also says that school districts must have the ability to choose how they spend money they bring in from property taxes.

Chapter 41 schools, the property-wealthy districts that give local revenue back to the state under Robin Hood laws, are joining together as the Texas School Coalition and suing the state primarily to make sure that they don’t end up shelling out more money.

A broader coalition of schools, led by attorney David Thompson, will attack on both the adequacy and property tax fronts. That group, which has not yet filed in court, will argue that the state failed to dedicate enough money to public education for schools to meet increasingly rigorous accountability standards. By doing so, they will argue, the state has taken away local districts' ability to choose how to spend or whether to raise property taxes: They must levy the maximum amount allowed under the law to meet the minimum standards. In effect, they say, lawmakers have instituted an unconstitutional statewide property tax.

The two other lawsuits represent the interests of poorer districts. They both attack the target-revenue system established in 2006. Then, lawmakers reduced the property tax rate and guaranteed school districts that the state would give them enough money to ensure that their revenue would not drop. Because of that measure, some school districts receive a lot of money from the state to maintain revenue levels, while others receive much less. That has resulted in a funding scheme in which neighboring school districts can have as much as a $7,000 difference in state spending per student. A group known as the Texas Taxpayer and Student Fairness Coalition, organized by the Equity Center, is suing on behalf of suburban, rural, and inner-city schools of varying sizes, arguing that the target-revenue system is wildly inefficient and unfair.

The Mexican American Legal Defense and Educational Fund argues in its lawsuit that the target-revenue system disproportionately hurts school districts that serve large contingents of low-income and English-language-learning students. Both MALDEF and the Equity Center will also include the property tax argument in their lawsuits.

The plaintiffs all agree that current levels of state funding are inadequate. If the court agrees with them, the question will then become how the state will go about fixing the situation: Will it bring all districts up to the same funding level by pouring more money into the system for poorer districts, or will it level the playing field by cutting money to the wealthier districts?

All the school districts argue more money would be the best solution, but where those dollars would come from in the state’s current budgetary situation remains to be seen.