Although the Texas Supreme Court denied an adequacy challenge to the state’s education finance system in 2005, it said at the time in Neely v. West Orange-Cove Consolidated ISD that “it remains to be seen whether the system’s predicted drift toward constitutional inadequacy will be avoided by legislative reaction to widespread calls for changes.” According to a complaint filed this week by a group of six school districts, representing a coalition of 120 relatively high wealth districts, “The Supreme Court’s warnings have proven prophetic.”
The new complaint in Calhoun Co. Ind’t Sch.Dist v. Scott recounts in detail the history of legislative attempts to deal with school funding issues since the Neely decision. In Neely, in addition to warning of the state’s drift toward inadequacy, the court held that because virtually all school districts were taxing at the statutory maximum level, the local property tax system had, in essence, become a state-wide ad valorum tax that is prohibited by the state constitution. To remedy these problems, the legislature lowered the property tax ceiling, but promised to more than make up for the lessened local revenue with additional state funding to be drawn from a new business tax. But, according to the plaintiffs’ complaint, that tax never yielded the anticipated sums and for several years most districts operated in accordance with the hold harmless provisions enacted as part of the new law. The receipt of federal stimulus funds postponed the day of reckoning, but after those funds ran out, and the legislature cut $4 billion from foundation funding and $1.4 billion from categorical grants in its last session, school districts are no longer able to provide the programs and services necessary to meet the state’s demanding college and career ready standards.
Interestingly, these relatively affluent school districts allege that even though the new system allows districts some flexibility to raise local property taxes, much of any extra revenues that their voters may might approve will be subject to the “recapture” provisions of state law and this fact will likely discourage voters from approving the increase. Even if the local voters should approve these increases, the amounts still would not be enough to provide their students an adequate education, according to the complaint.
A few days after the Calhoun Co. Ind’t Sch case was filed, the Edgewood Ind’t Sch. Dist. and three other districts representing mainly low-income and Latino students filed a separate law suit. Plaintiffs in this case, who also include a number of parents, are represented by the Mexican American Legal Defense Fund. Edgewood was the plaintiff in four earlier education finance litigations decided by the Texas Supreme Court, and the district’s funding problems were the focus of the U.S. Supreme Court’s 1973 Rodriguez case which held that education was not a fundamental interest under the U.S. Constitution; the Supreme Court said at that time that challenges to state education finance decisions should be determined at the state level.
Edgewood’s new complaint primarily raises equity issues, claiming that the gap between the funds available in the lowest wealth and highest wealth school districts now substantially exceed the $600 per student unit that the Texas Supreme Court had held to be the constitutionally permissible limit in previous cases. The complaint also raises adequacy concerns, stating that since 2006, “the Texas Legislature has retreated from its obligation to provide an efficient public finance system, while at the same time, it has continued to ratchet up accountability and curriculum standards for individual students and school districts. “ Plaintiffs further allege that the overall inadequate funding for low income and English language Learner students.
Last October, the Texas Taxpayer and Student Fairness Coalition, a grouping of more than 150 largely high need school districts, students, and parents, filed a an adequacy case, alleging the system is unfair, inefficient and unconstitutional. According to the Huffington Post, a fourth group from among Texas’ 1100 school districts is expected to file another suit in the near future.