AUSTIN (CN) – Seven public school districts, joined by parents and students, say Texas’ school finance formula is unconstitutional, taxing property-poor districts at higher rates than wealthy areas, yet still providing poor districts with less money. They say the unfairness was “compounded” this year when the Legislature cut $5 billion from schools.
The Texas Taxpayer & Student Fairness Coalition, joined by seven school districts and six parents and children, sued the Texas Commissioner of Education, the state comptroller and the State Board of Education, in Travis County Court.
The schools and parents challenge the Legislature’s 2011 Senate Bill 1, “which reduced school funding formulas by $4 billion in addition to other cuts in excess of $1 billion.”
SB1 will make “across-the-board percentage reductions to districts’ regular program funding” in fiscal year 2012. “These losses in already low-funded districts have a harsher impact than similar cuts to a much higher funded district,” the complaint states. And the cuts continue in FY 2013.
Under the Texas formula, taxpayers in “low-wealth districts” who agree to tax themselves at the highest rates allowed may still get less money for their schools than families in wealthy districts who tax themselves at lower rates.
For instance, residents of Nacogdoches Independent School District, a plaintiff, taxed themselves at the maximum $1.17 tax rate in the 2010-11 school year, producing $5,487 in state funding per student (a number known as WADA, or weighted average daily attendance). But residents of wealthier Eanes ISD taxed themselves at a rate of $1.04, and their schools got $6,881 in state aid per student.
So even though Nacogdoches families paid a 13-cent higher property tax rate than families in Eanes, “the state funding system rewarded Nacogdoches school children with over $10 million fewer dollars than they would have had at the Eanes funding level,” according to the complaint.
One result is that poorer districts can often barely finance fundamental education while richer districts have enough money for enrichment programs.
That inequity makes the law unconstitutional, the school districts say.
The plaintiff school districts are Hillsboro, Nacogdoches, Pflugerville, San Antonio, Taylor, and Van I.S.Ds. They claim that the finance formula caps their income while richer districts have room for budget increases and program expansions.
The property owners say they are forced to pay the maximum in school property taxes while getting less for their money than the richer districts.
Plaintiff Randy Pittenger says his tax rate of $1.17, in Belton, raises $5,947 per student, while a similarly situated taxpayer in the wealthier Glen Rose district pays an 82½ cent tax rate, which raises $8,895 per student.
“In other words, Randy Pittenger pays 42 percent higher taxes while Glen Rose received 50 percent more in revenue per WADA.”
The result, the plaintiffs say, is that “the public education funding system in Texas is arbitrary and, therefore, cannot be efficient.” (Under Texas education law, school funding must be spent in the most “efficient” way.)
The plaintiffs say SB1 violates a 2005 Texas Supreme Court ruling, West Orange Cove v. Neely, which stated that “citizens who were willing to shoulder similar tax burdens, should have similar access to revenues for education.”
In short, the plaintiffs say, the state is shirking its duty to educate children and fund schools: “The state has passed the burden of raising funds to support education to the districts.”
Citing data from the Texas Education Agency, the plaintiffs say: “(S)chool districts in the top 15 percent by wealth in 2010-11 have $2.5 billion left in taxing capacity, but school districts in the bottom 15 percent by wealth in 2010-11 have $0 left in taxing capacity.”
In the 2010-11 school year, more than 200 Texas school districts were taxing themselves at the maximum rate allowed by the state, $1.17, but the revenue per WADA for 80 percent of these districts is below the average revenue per WADA for all districts not at the cap,” the complaint states.
“Having a system that has been demonstrated to be inefficient, the burden rests with the state to show that such inefficiency is not arbitrary. This the state cannot do,” the plaintiffs say. They say the school funding formula is arbitrary and unfair.
They seek declaratory judgment that the state’s school finance system is unconstitutional and fails to provide equal protection to students in poor districts. And they want the state enjoined from distributing any school funding until an equitable system is created.
Lead counsel is Richard Gray III with Gray & Becker.