Judge: Texas school finance plan unconstitutional

AUSTIN, Texas — The system Texas uses to fund public schools violates the state's constitution by not providing enough money to school districts and failing to distribute the money in a fair way, a judge ruled Monday.

The landmark decision could force the Legislature to overhaul the way it pays for education.

Shortly after listening to closing arguments, Judge John Dietz ruled the funding mechanism does not meet the constitutional requirement for a fair and efficient system that provides a general diffusion of knowledge.

"We're pleased the judge ruled the state hasn't provided adequate resources or equitable resources to the schools." said Gene Sheets, who has been superintendent at the Muleshoe Independent School District for 13 years, "We agree with the ruling."

The state is expected to appeal the ruling to the Texas Supreme Court.

This was the sixth case of its kind since 1984. In 2005, Dietz found the previous funding system unconstitutional and directed the Legislature to devise a new one.

At issue in this case are $5.4 billion in cuts to schools and education grant programs the Legislature imposed in 2011, but the districts say simply restoring that funding won't be enough to fix a fundamentally flawed system.

"It was inadequate and inequitable before they cut $5.4 billion," Sheets said. "At the same time they cut $5.4 billion, the state raised the standards."

Sheets and others point out the cuts have come even as the state requires schools to prepare students for standardized tests that are getting more difficult and amid a statewide boom in the number of low-income students and those who need extra instruction to learn English, both of whom are more costly to educate.

"There is no free lunch. We either want increased standards and are willing to pay the price, or we don't," Dietz said. He has promised to issue a detailed, written decision soon.

The trial took more than 240 hours in court and 10,000 exhibits to get this far.

Sen. Rodney Ellis, D-Houston, said Dietz's decision confirms what his party has been saying all along.

"Hopefully this latest in a long line of decisions will force the legislature to truly and systemically address the inequities in our school finance system to ensure that every child in every school — regardless of wealth — has access to a top-notch education," Ellis said in a statement.

The attorney general's office declined to comment.

Attorneys representing around 600 public school districts argued Monday that the way Texas funds its schools is "woefully inadequate and hopelessly broken," wrapping up 12 weeks of testimony in the case.

Texas does not have a state income tax, meaning it relies on local property taxes to fund its schools. But attorneys for the school districts said the bottom 15 percent of the state's poorest districts tax average 8 cents more than the wealthiest 15 percent of districts but receive about $43,000 less per classroom.

Rick Gray, a lawyer representing districts mostly in poorer areas of the state, said during closing arguments that Texas must begin producing better educated college graduates, or it would see its tax base shrink and needs for social services swell due to a workforce not properly prepared for the jobs of the future.

"The system today, as we see it, is failing Texas children," he said, later adding: "Texas should be ashamed."

Texas Attorney General Greg Abbott's office countered that the system is adequately funded and that school districts don't always spend their money wisely.

In all, the case involves six lawsuits filed on behalf of about two-thirds of Texas school districts, which educate around 75 percent of the state's roughly 5 million public school students.

Districts in rich and poor parts of the state are on the same side. Texas' funding system relies heavily on property taxes and a "Robin Hood" scheme where districts with high property values or abundant tax revenue from oil or natural gas resources turn over part of the money they raise to poorer districts.

Many "property wealthy" districts say that while they are in better shape than their poorer counterparts, the system still starves them of funding since local voters who would otherwise support property tax increases to bolster funding for their schools refuse to do so, knowing that most of the money would be sent somewhere else.

All the school districts involved argued that funding levels were inadequate, regardless of what level of funding they received.

Also suing were charter schools, which want state funding for their facilities and Texas to ease or a remove a cap allowing only 215 licenses to operate charter schools statewide. Dietz said they had not made their case and ruled in favor of the state.