Texas School Funding

Judge John Dietz (Photo by Jana Birchum)

Judge John Dietz must have a terrible case of déjà vu. In 2004, he told Texas lawmakers that the state's public school-finance system failed to meet the state constitutional requirement to educate all children. A decade later, and he has issued basically the same ruling.

On Aug. 28, Dietz handed down his final ruling in a lawsuit brought in 2012 by the Texas Taxpayer and Student Fairness Coalition (a group brought together by the Equity Center and representing 443 school districts) and the Texas Charter School Association. He ruled that, since the current system makes so many demands on local independent school districts, it amounts to a de facto state property tax. Moreover, the end result violates the education clause of the Texas constitution, requiring that the state provide an "adequate" and "equitable" education to all children.

Technically, the defendants were Com­missioner of Education Michael Williams, Comptroller Susan Combs, and the State Board of Education. However, the real target were the Texas lawmakers who created the current system after Dietz's 2004 ruling. State Rep. and House Appropriations Com­mittee member Dawnna Dukes, D-Austin, said, "As legislators, any ruling that behooves ensuring equitable, sufficient, quality education, and funding for the school children of Texas, is a victory. As appropriations committee members, this means we have to buckle down and make a commitment that is true and strong to financing our schools in the proper way, and not rolling the responsibility downhill to local government."

Dietz's ruling was not a surprise. He issued a preliminary oral opinion last year ("Dietz Rules Against School Finance Sys­tem," Feb. 8, 2013) but gave lawmakers a chance to improve the situation during the last legislative session. However, their solution – return $3.4 billion to fill the $5.4 billion hole they dug in 2011 – was insufficient. When Dietz reopened proceedings earlier this year, the state's response was direct: Attorney General Greg Abbott tried, unsuccessfully, to have the judge recused. Now Abbott is widely expected to challenge the ruling at the state Supreme Court. How­ever, in a statement, Equity Center Exec­utive Director Wayne Pierce said, "Judge Dietz's ruling marks an incredible first step to achieving a system that treats our children and property taxpayers fairly."

The current system basically breaks districts down into two categories: property-wealthy, and property-poor. The wealthy ones are commonly referred to as "Chapter 41" districts, from the relevant section of the Texas Education Code. They contribute funds from their property tax revenue to the state, which re-allocates it to districts with lower property tax income. Chapter 41 district Austin ISD is in the worst of positions: While its property values are high, its needs are great, and a large majority of its students are poor. On Aug. 26, the board of trustees approved its 2014-15 budget; this year alone, AISD will lose $175.5 million to the state under recapture, while spending $24.9 million of its reserves just to cover operating expenses.

In all, AISD taxpayers have sent $1.66 billion to the state since 2002 and, if the current system does not change, the administration calculates that the annual contribution will increase to $300 million by 2018. Interim Superintendent Paul Cruz described Dietz's ruling as a chance to reinforce the district where it needs the most help. "Increased standards and an emphasis on post-secondary readiness for all students are the right goals for Austin ISD schools. We must have additional resources if we are to provide the interventions and individualized attention our struggling students need in order to succeed."

Dukes, whose district includes parts of both Austin and Pflugerville ISDs, echoed Cruz's sentiments, adding that the current "Robin Hood" system cannot be left as is, and the state must pick up its share of the tab. She said, "I hope that the resolution will not be the grand burden that our districts have had to encompass."

The afternoon of the final ruling became a cavalcade of press releases from statewide groups. The majority hit basically the same two talking points, summed up by Texas American Federation of Teachers President Linda Bridges. Point one: "The kids are worth it, and they shouldn't have to wait any longer for the state to do what's right." Point two: "State officials should stop trying to defend this indefensible system."

A.G. Abbott – who can count this ruling as yet another loss for his office – was nevertheless bullish in defeat. His campaign released a statement proposing root-and-branch educational reform, "rather than just doubling down on an outdated education system constructed decades ago." His proposal was to send voters to his election website, with policy plans requiring the Texas Education Agency to allocate more cash to the less accountable private charity Teach for America, and, of course, increasing the state's dependence on charters.

However, other ranking Republicans joined the call for funding reform. Senate Education committee member and Higher Education Chair Kel Seliger, R-Amarillo, said that, legal appeal or not, he will draft legislation for the next session. "While increased funding does not necessarily equate to improvements in student performance, the current mechanism by which the funding is distributed clearly needs to be addressed."