Largest school finance lawsuit in Texas takes shape

By Kate Alexander | AMERICAN-STATESMAN STAFF
Thursday, Dec. 22, 2011

The legal fight over Texas' school finance system is shaping up to become the largest of its kind in state history.

Texas' largest school districts — including Austin, Houston and Dallas — joined the fight Thursday when they and 60 other districts, including Round Rock, filed a lawsuit that claims the method for funding Texas public schools is unconstitutional. It is the fourth such legal challenge filed against the state in recent months.

In all, more than 3 million students go to school in districts that have signed on to one of the four lawsuits. That total exceeds 60 percent of the state's public school population and dwarfs any of the past legal challenges.

"It demonstrates the pervasiveness of the issue," said lawyer David Thompson , who is representing the school districts that filed the latest lawsuit. "It is a problem of statewide magnitude."

The issue, according to the lawsuit, is that the state has run afoul of the Texas Constitution by failing to provide adequate resources to meet the higher academic standards established by the Legislature. At the same time, districts lack "meaningful discretion" to set their own tax rates, as the courts have said is required.

Finally, the system for divvying up the limited state dollars among the districts is inequitable and arbitrary.

More than $5 billion worth of state budget cuts to education enacted by lawmakers earlier this year has exacerbated the problem. Effectively, each Texas student on average is now valued at about $500 less than last year.

"From our perspective, the finance system is broken, and we've been saying that for the last two or three years," Round Rock Superintendent Jesús Chávez said.

The superintendent and the attorneys said the lack of state funding makes it more difficult for schools to perform at high levels, particularly with the increased rigor of new state-mandated achievement tests rolling out this school year.

"We are looking at steadily rising standards and funding that seems to be completely unrelated to what it is we're trying to accomplish," Thompson said.

Thursday's lawsuit involves the widest array of school districts, encompassing as many as 1.6 million students, including about 86,700 in Austin.

"The school board and administration believe that the current school finance system prevents the district from providing an appropriate and adequate education to all students. It is in the best interest of Austin students to seek a remedy within the court system that will ensure the level of funding to which they are entitled by the Texas Constitution," district spokesman Alex Sanchez said.

The other challenges have come from more focused groups of districts, including those that are considered property-wealthy and those on the opposite end with large populations of English-language learners.

About half the school districts in the state are now party to the lawsuits, which are expected to be consolidated and heard in a single trial next fall in Travis County.

Those big numbers might not figure into the court's legal calculus. But they matter to members of the Legislature, who would be tasked with fixing the school finance system if it is ruled unconstitutional, said Ray Freeman , deputy director of the Equity Center, which has spearheaded one of the other lawsuits. That challenge, which focuses on districts that are at the lower end in terms of per-student funding, includes 1.3 million students.

"You have elected officials in every one of these school districts saying that things are bad enough that we need to sue the state," Freeman said.

The current round of school finance litigation is the eighth filed against Texas since 1968.

The issues at the center of today's litigation stem from the Legislature's response to a 2005 Texas Supreme Court ruling that lawmakers had enacted an unconstitutional statewide property tax.

Legislators reduced local school property tax rates by one-third and dedicated more state money to the schools to replace the local money. The state has not maintained that level of school funding in recent years.

They also froze the level of per-student revenue at what each school district was getting in 2005-06 with the intention of coming back in 2007 to make a long-term fix. But lawmakers still haven't fashioned a lasting solution.

In a joint statement announcing Thursday's suit, the lawyers argue that the temporary finance system from 2006 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."

For example, neighboring Pflugerville, which joined the Equity Center lawsuit, and Round Rock school districts tax their property owners at the same rate. But Round Rock has almost $700 more per student to spend this school year.

"There's the issue of adequacy, as well as equity," Chávez said. "For Round Rock, certainly the adequacy is very important, having the necessary funds to provide a good education to our students. With the shortage of funds from the state level, that's been put into jeopardy."