A Texas judge declared the state鈥檚 beleaguered school funding system unconstitutional last week, largely because it fails to close the achievement gap between white and minority students.
In his comments before handing down the ruling Sept. 15, District Judge John Dietz said the state鈥檚 cap on property-tax rates prevents Texas from raising enough revenue to ensure all students reach state-established achievement levels.
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鈥淚f the educational gap were completely closed, then Texas would be wealthier and would spend less in real dollars on prisons and the needy than it does today,鈥� the judge said. 鈥淭he solution seems obvious. Texas needs to close the education gap. But the rub is that it costs money to close the educational achievement gap.鈥�
The case has been closely watched nationally and is part of an upswing in school finance litigation. Currently, almost half the states face such lawsuits or are responding to court orders to fix their systems.
Ruling only minutes after hearing closing arguments in a five-week trial in Austin, Judge Dietz said Texas failed to raise enough money to provide 鈥渁n adequate suitable education,鈥� as promised in the state constitution.
He also found that the state鈥檚 cap on property-tax rates failed to meet a separate constitutional guarantee that districts have 鈥渕eaningful discretion鈥� in setting their tax rates.
The judge promised to issue a written injunction by the end of the month that would prohibit the state from relying on its school finance system after Oct. 1, 2005.
Enforcement of that order will likely be put on hold, however, while the Texas Supreme Court considers the state鈥檚 appeal of the case, which state officials promised to file almost immediately after the judge ruled.
鈥淏ecause 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,鈥� state Attorney General Greg Abbott said in a statement.
鈥楳ajor Victory鈥�
Judge Dietz鈥檚 decision is the latest in a lengthy history of school finance litigation in the Lone Star State.
The state set up its current school finance system in 1993 after the state supreme court ruled that the previous system didn鈥檛 meet the Texas Constitution鈥檚 guarantee of an efficient education. The main problem with the system, as the court determined then, was its inequitable distribution of funds.
Under the current system, wealthy districts must share portions of their property-tax receipts with poor districts. The so-called Robin Hood system also limits local property-tax rates to $1.50 per $100 of assessed value.
In West Orange-Cove Consolidated School District v. Neeley, more than 330school districts joined civil rights activists in claiming that the system didn鈥檛 raise enough money and failed to distribute it equitably.
鈥淚t was a major victory,鈥� Wayne R. Pierce, the executive director of the Austin-based Equity Center, a coalition of 652 Texas school districts, many of them plaintiffs in the case, said about last week鈥檚 ruling. 鈥淭here鈥檚 no other way around it.鈥�
According to a lawyer who worked for the plaintiffs, the judge鈥檚 remarks about providing enough funding to close the racial achievement gap are unique among those coming from the bench in the history of school finance litigation in the state. Previous cases, and rulings, focused on the amount of money available for each child and whether it was equitable for poor and minority students, said David Hinojosa, a staff attorney for the San Antonio-based Mexican American Legal Defense Fund, one of the plaintiffs.
鈥淗e really gets it,鈥� said Pascal D. Forgione Jr., the superintendent of the 78,700-student Austin Independent School District, which is part of the coalition of districts suing the state. 鈥淚f we don鈥檛 address the demographics and . the achievement gap, our economy is going to suffer.鈥�
And those demographic changes are happening quickly, Mr. Forgione said. In the Austin district, the student poverty rate has risen from 48 percent to 58 percent in the past four years. Students from racial and ethnic minorities account for almost 70 percent of the district鈥檚 enrollment, he said.
Economic Argument
In his statement announcing the ruling, Judge Dietz relied heavily on a state demographics report that predicts the losses to the Texas economy if it doesn鈥檛 close the achievement gap.
鈥淚f we could close the gap in educational achievement just halfway by 2020,鈥� he said, citing the report, 鈥渢hen Texans would be wealthier than [they are] today in real dollars, spend more money for our economy, [and] pay more taxes for our government.鈥�
But if the gap persists until 2040, he said, the state鈥檚 average income would fall from $54,000 to $47,000 and the high school dropout rate would rise from 18 percent to 30 percent.
Judge Dietz appeared to be swayed, according to one lawyer, by evidence that the state鈥檚 early interventions are effective in closing the achievement gap among 3rd graders on state tests.
After that grade level, state aid for teacher training, curriculum specialists, and tutors is trimmed back, and the gap widens, Mr. Hinojosa said.
鈥淲hen they have provided more resources [up to 3rd grade], you have a small gap,鈥� Mr. Hinojosa said. 鈥淲hen they haven鈥檛 provided the resources [in upper grades], you see a big gap.鈥�
Legislative Solution
State leaders responded to Judge Dietz鈥檚 decision with promises to come up with a solution before the state supreme court acts.
鈥淭oday鈥檚 ruling . confirmed what many of us long suspected, that the current 鈥楻obin Hood鈥� school finance system fails to meet constitutional standards,鈥� Speaker of the House Tom Craddick said in a statement.
Mr. Craddick asked Gov. Rick Perry to declare school finance an emergency measure, which will give the topic top priority when the legislature convenes in January.
In his own statement, the governor said he would prefer that the legislature solve the problem rather than the courts, but he didn鈥檛 specify whether he would declare the issue an emergency.
The legislature failed to pass a school finance overhaul in its 2003 session and again in a special session last spring. (鈥溾�楻obin Hood鈥� Still Alive After Texas Special Session,鈥� May 26, 2004.)
In this year鈥檚 session, the governor, Mr. Craddick, and Lt. Gov. David Dewhurst all agreed to several principles and goals in changes to school finance, including eliminating the revenue-sharing formula and offering property-tax relief.
But even the three Republicans couldn鈥檛 agree on what revenues would be tapped to offset the loss of property taxes.
Judge Dietz鈥檚 decision last week will give policymakers the incentive to actually fix the system, whether it鈥檚 before or after the supreme court rules on the appeal, according to Mr. Pierce of the Equity Center.
鈥淲e now have the opportunity to fix this thing,鈥� he said. 鈥淲e鈥檙e going to see to it that everybody is funded at an appropriate level.鈥�
