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District Court Judge Rules Texas School Finance System Unconstitutional
In a strongly worded ruling, State District Court Judge John Dietz on Sept. 15 found that the state's system of funding public schools fails on all counts. Attorney General Greg Abbott, representing the state, vowed to immediately appeal directly to the Texas Supreme Court.
After a month of testimony from three groups of plaintiffs and a defense by the state office of the Attorney General, an oral ruling was issued by Judge Dietz in the latest round of school finance litigation. The district court is the first level for this litigation, which essentially consolidated three groups of plaintiffs challenging the state's school finance system as tantamount to an unconstitutional statewide property tax that lacks adequacy and is inequitable.
Presiding Judge Dietz, unlike his predecessors in earlier incarnations of school finance litigation in Texas, issued a verbal ruling within minutes of the conclusion of the closing arguments. Dietz found that the state's school finance system was not efficient, not adequate, and did not provide meaningful discretion for the setting of tax rates. The judge noted that some districts must charge more than the $1.50 tax rate to meet the constitutional requirement for a general diffusion of knowledge and the standards established by the state's accountability system.
Emphasizing his ruling, Judge Dietz issued an injunction prohibiting further funding of public schools under the existing school finance structure effective one year from the date of his written orders, which was expected expected on Oct. 1, 2004, but at this poiint is still pending. In essence, the Texas Legislature will have to fix the school finance system prior to the start of the next school year.
Judge Dietz remarked in delivering his ruling that "Education costs money, but ignorance costs more money." This comment was precipitated by the state demographer's testimony regarding the changing profile of the state's student population and likelihood that if the education gap continues, Texas' future will include a population that is larger, poorer and less well educated than today. A written ruling, which will no doubt provide more detail and a clue as to what the implications might be for lawmakers and districts, is expected in early October.
In a news release issued following the court's decision, Gen. Abbott stated, "Although we respect the judge's decision, we will immediately file a direct appeal to the Texas Supreme Court. Because this is a critical matter of statewide importance, and because the students, parents, school districts and taxpayers need closure on this matter, we will urge the Texas Supreme Court to hear the school finance case at the earliest possible date."
House Speaker Tom Craddick also reacted to the ruling, saying it is just the first step in the judicial review process, but added that "it confirmed what many of us long suspected, that the current "Robin Hood" school finance system fails to meet constitutional standards.
"Judge Dietz's decision also provides important direction to the Legislature on particular issues that will need to be addressed, especially regarding the need to close achievement gaps among different groups of students," Craddick said. "To achieve this goal, the state must improve funding and accountability for the education of poor and bilingual students and, as I have consistently argued, we must do a better job of measuring and addressing our dropout problem.
"Today's decision means that we in the Legislature must redouble our efforts to establish a school finance system that is fairer to taxpayers and, most importantly, better ensures that all Texas students can participate fully in the social, economic and educational opportunities of our state.
Background
This litigation, West Orange-Cove CISD v. Neeley, consolidated three separate groups of plaintiffs, who made arguments seeking a ruling on the school finance system, with the state system defended by the office of the Attorney General.
The first set of plaintiffs, generally referred to as the West Orange-Cove group, essentially comprised nearly 50 relatively wealthy property districts. This group argued that the $1.50 cap on the maintenance and operations tax rate, which nearly half of the state's districts have now hit, amounts to a statewide property tax in violation of the Texas Constitution. Further, they argued that the cap on tax rates means local school districts lack meaningful discretion to ensure the general diffusion of knowledge required by the Texas Constitution. Several urban superintendents appeared as witnesses for this group of plaintiffs, testifying to the hardships imposed by bumping up against the tax ceiling, resulting in program cuts, reductions in staff and other cost-cutting measures.
During the trial, attorneys for the state responded by challenging the nature of the expenditures being made by districts. It was pointed out that districts still make discretionary expenditures, in areas such as extracurricular activities and teacher pay raises above the state minimum requirements. In essence, the argument was that such voluntary expenditures indicate that local districts do have discretion in spending and that the state's mandated program does not exceed the revenue available to districts.
The second group of plaintiffs, comprising more than 200 other school districts, asserted that the current school finance system, under which only 38 percent of funding comes from the state, is not adequate. This group of plaintiffs has asserted that the true dropout rate is sufficiently high and the passing standards for TAKS are so low that despite the number of campuses and districts receiving satisfactory or better ratings under the accountability system, too many children are not being provided an adequate education.
The third group of plaintiffs, composed of 22 property-poor school districts, was represented by the Mexican American Legal Defense and Educational Fund (MALDEF). These plaintiffs alleged that the state inadequately funds education and the equity gap has widened to unacceptable levels (roughly $1,000 per pupil) between property-rich and property-poor school districts, in violation of the Texas Constitution.
The trial lasted 26 days and included 140 hours of testimony. Many of the 35 witnesses were school superintendents testifying to the hardships imposed in their districts due to inadequate funding. Testimony highlights included the presentation of an adequacy study, separate from the one commissioned by the Joint Select Committee on Public Education Funding (which indicated adequate funding in all but a handful of districts). The alternative study indicated a shortfall of approximately $1,800 per student in current funding levels. Teacher quality and compensation also have been reviewed in Texas, with Judge Dietz at one point suggesting that perhaps if compensation is the reason teachers are leaving the profession, raising compensation levels "would have the most propitious effect" of slowing the rate of departures. Judge Dietz also indicated interest in testimony that funding is particularly inadequate for bilingual education and LEP programs.
Key to the defense was the presentation of the state's cost study, including an extensive review of methodology, and the reiteration of the conclusion that most districts have more than enough money available to them to offer the state-required program.
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