Texas School Property Tax Is Unconstitutional

AUSTIN (CN) - The Texas School Finance System effectively imposes an inequitable state property tax and is unconstitutional in several aspects, a state court judge ruled.

In 2011, the Texas Taxpayer & Student Fairness Coalition, along with seven school districts and six parents and children, sued the Texas Commissioner of Education, the Texas Comptroller and the State Board of Education, in Travis County Court.

The lawsuit said that Texas' school finance formula taxed property-poor districts at higher rates than wealthy areas, but that it still gave poor districts less money. This created an unconstitutional inequity because poorer districts had difficulty in paying for basic education, while richer districts had enough money for enrichment programs.

The judgment rendered by judge John Dietz on August 28 dealt with that suit as well as five others with which it was consolidated that challenged the State's school finance system and other aspects of the educational system. Hundreds of Texas school districts ultimately joined in the consolidated suit, as did the Texas Charter School Association and various individuals.

Judge Dietz found that "the Texas school finance system effectively imposes a state property tax in violation of Article VIII, Section 1-e of the Texas Constitution because school districts do not have meaningful discretion over the levy, assessment, and disbursement of local property taxes."

He also said the Legislature "failed to meet its constitutional duty to suitably provide for Texas public schools because the school finance system is structured, operated, and funded so that it cannot provide a constitutionally adequate education for all Texas schoolchildren. Further, the school finance system is constitutionally inadequate because it cannot accomplish, and has not accomplished, a general diffusion of knowledge for all students due to insufficient funding."

"Finally, the school finance system is financially inefficient because all Texas students do not have substantially equal access to the education funds necessary to accomplish a general diffusion of knowledge."

Dietz said the State's school finance system "fails to satisfy the 'make suitable provision' requirement because Texas school children, particularly the economically disadvantaged and English language learners, are denied access to that education needed to participate fully in the social, economic, and educational opportunities available in Texas."

The judge also declared that current facilities funding "is arbitrary and inadequate in providing Texas school children with the constitutional mandate of adequacy" and that "funding for open-enrollment charter schools also is inadequate."

"[T]he school finance system violates the 'efficiency' provisions of Article VII, Section I of the Texas Constitution in that it fails to provide substantially equal access to revenues necessary to provide a general diffusion of knowledge at similar tax effort, and instead arbitrarily funds districts at different levels below the constitutionally required level of a general diffusion of knowledge."

Dietz denied declaratory relief for plaintiffs' "taxpayer equity" claim, as well as the Intervenors' claim on "qualitative efficiency." The Charter School plaintiffs were granted judgment on the adequacy claim, but relief on their other claims was denied.Finally Dietz directed that all court costs incurred by the Texas Taxpayer & Student Fairness Coalition plaintiffs and school district plaintiffs will be paid by the State defendants.

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