2005 Texas Supreme Court Ruling on School Finance System
November 22, 2005 -- In a 7–1 opinion, the Texas Supreme Court today struck down the school finance system, finding that it had evolved into an unconstitutional state property tax. The Court also found that there was substantial evidence that “the public education system has reached the point where continued improvement will not be possible absent significant change” and 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.”
The Court gave the Legislature until June 1, 2006 to address the constitutional deficiencies in the system. For the full ruling and summary, select the links below:
- The full court ruling can be found on the Texas Supreme Court website.
- An excellent summary (65k) of the ruling is provided by plaintiffs' attorneys.
The West Orange-Cove Plaintiffs, the lead plaintiffs in the lawsuit, hailed the Court’s ruling. Haynes and Boone LLP attorney George W. Bramblett, Jr., co-counsel for the West Orange-Cove Plaintiffs, remarked: “Today is a great day for the State of Texas. The Court’s historic decision will be applauded by educators, teachers, parents, and students across the state.
"The Court’s ruling on our state property tax claim means that the Legislature must build financial capacity into the school funding system so that districts can hire quality teachers and provide the type of programming that communities across our state need and expect. And, the Court reaffirmed that the Legislature has a constitutional duty to provide an adequate level of funding for our public educational system and that this duty is enforceable in court,” said Mr. Bramblett.
Bracewell & Giuliani LLP attorney David Thompson, co-counsel for the West Orange-Cove Plaintiffs, continued: “For the past decade, the Legislature has been shifting the responsibility of funding Texas schools onto local districts and onto the local property tax, but the local property tax can no longer bear this heavy burden. The Supreme Court’s decision makes clear that it is time for the Legislature to step up to the plate and pay for the high academic standards it has imposed on districts and students.”
Currently, more than two-thirds of school districts in Texas – which educate more than 80% of the students in the state – are taxing at or very near the maximum tax rate. The Supreme Court concluded that these districts lacked “meaningful discretion” to reduce their tax rates without jeopardizing their ability to provide a constitutionally adequate education. While the Court concluded that the system is “adequate” now, it reserved the right to revisit the issue in the future. In doing so, the Court rejected the State’s claim that the adequacy of the educational system is a “political question” not subject to judicial review.
The Legislature has failed to address the looming school finance crisis on multiple occasions, including its 2003 regular session, a 2004 special session, the 2005 regular session, and two special sessions called by Governor Perry this summer.
“The Legislature’s focus has been on simply trading property taxes for consumer taxes, without adding any real new money into the school system. And they could not even accomplish that meager goal. We hope that the Legislature will heed the Supreme Court’s call and adopt ‘big picture’ reforms that will place the Texas public school finance system on firm financial footing for years to come,” remarked Haynes and Boone LLP attorney Mark Trachtenberg, co-counsel for the West Orange-Cove Plaintiffs.
Representing West Orange Cove Plaintiffs
Judge Dietz's Ruling on State Funding Lawsuit
State District Judge John Dietz ruled in favor of plaintiffs in a landmark school finance lawsuit, which culminated in September, 2004. Judge Dietz entered an injunction shortly thereafter, giving the state one year to address an inadequate school finance system. Plano ISD is among the 300 school districts who served as plaintiffs.
Dr. Doug Otto, superintendent of schools, explained that, “The Texas school finance lawsuit came to an end when Judge Dietz ruled in favor of all children in the state of Texas. He very aggressively stated that the school finance system is under-funded and that districts need more money in order to help students meet the new state and federal standards.” Dr. Otto serves as president of the Texas School Coalition, which provides research, information and consultation regarding school finance legislation.
“The judge indicated that, not only should districts have more money to meet the standards, but that they need additional dollars for meaningful discretion which would allow them to offer programs that meet the expectations of their communities,” said Dr. Otto. “The judge’s decision was not only that there is not enough money and that the $1.50 tax cap is tantamount to a statewide property tax, but that districts ought to have latitude to offer enrichment programs that are ‘over and above’ state minimum requirements.”
Judge Dietz's official ruling was signed and posted on November 30, 2004, the Texas Education Agency legal services Web site.
Plano ISD 2004-05 Budget Update
Plano ISD implemented budget reductions for this school year totaling $17 million and resulting in cuts in personnel and services. The cuts for the 2004-05 budget were over and above the nearly $40 million that has already been cut from the budget over the past five years.
Plano ISD Reduction in Force (19k) -This school board agenda item dated December 9, 2003, details the board-approved reduction in force for the 2004-05 school year.
These cuts result from a badly-flawed state school finance system, reduced property values and virtually no increase in state funding. It is essential that the state legislature rewrite the Texas school finance system and find a way to adequately fund Texas schools ensuring equity and excellence.
Plano ISD is party to a lawsuit against the state, but decisions in that case may take years. In order to guarantee that the legislature meets it obligations, write your local legislator and Governor Perry asking that a special legislative session on school finance be held this spring or sooner.
We cannot wait. We cannot do nothing. The future of our students is at stake.
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