Law & Courts

Texas Judge Rules Funds Not Enough

By David J. Hoff — September 21, 2004 5 min read
  • Save to favorites
  • Print

A Texas judge declared the state’s 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’s cap on property-tax rates prevents Texas from raising enough revenue to ensure all students reach state-established achievement levels.

See Also

Read the accompanying story,

“If 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,” the judge said. “The solution seems obvious. Texas needs to close the education gap. But the rub is that it costs money to close the educational achievement gap.”

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 “an adequate suitable education,” as promised in the state constitution.

He also found that the state’s cap on property-tax rates failed to meet a separate constitutional guarantee that districts have “meaningful discretion” 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’s appeal of the case, which state officials promised to file almost immediately after the judge ruled.

“Because 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,” state Attorney General Greg Abbott said in a statement.

‘Major Victory’

Judge Dietz’s 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’t meet the Texas Constitution’s 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’t raise enough money and failed to distribute it equitably.

“It was a major victory,” 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’s ruling. “There’s no other way around it.”

According to a lawyer who worked for the plaintiffs, the judge’s 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.

“He really gets it,” 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. “If we don’t address the demographics and . the achievement gap, our economy is going to suffer.”

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’s 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’t close the achievement gap.

“If we could close the gap in educational achievement just halfway by 2020,” he said, citing the report, “then Texans would be wealthier than [they are] today in real dollars, spend more money for our economy, [and] pay more taxes for our government.”

But if the gap persists until 2040, he said, the state’s 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’s 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.

“When they have provided more resources [up to 3rd grade], you have a small gap,” Mr. Hinojosa said. “When they haven’t provided the resources [in upper grades], you see a big gap.”

Legislative Solution

State leaders responded to Judge Dietz’s decision with promises to come up with a solution before the state supreme court acts.

“Today’s ruling . confirmed what many of us long suspected, that the current ‘Robin Hood’ school finance system fails to meet constitutional standards,” 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’t 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. (“‘Robin Hood’ Still Alive After Texas Special Session,” May 26, 2004.)

In this year’s 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’t agree on what revenues would be tapped to offset the loss of property taxes.

Judge Dietz’s decision last week will give policymakers the incentive to actually fix the system, whether it’s before or after the supreme court rules on the appeal, according to Mr. Pierce of the Equity Center.

“We now have the opportunity to fix this thing,” he said. “We’re going to see to it that everybody is funded at an appropriate level.”

Events

This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Assessment Webinar
Reflections on Evidence-Based Grading Practices: What We Learned for Next Year
Get real insights on evidence-based grading from K-12 leaders.
Content provided by Otus
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Artificial Intelligence Webinar
Empowering K-12 Education with AI: From Instruction to Personalized Learning
AI isn't the future, it's NOW! Learn how AI can be effectively used to personalize student learning in K-12.
Content provided by Pearson
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
School & District Management Webinar
Breaking the Cycle: Future-Proofing Schools Against Chronic Absenteeism
Chronic absenteeism is a signal, not just data. Join us for a webinar on reimagining attendance with research & AI!
Content provided by Panorama Education

EdWeek Top School Jobs

Teacher Jobs
Search over ten thousand teaching jobs nationwide — elementary, middle, high school and more.
View Jobs
Principal Jobs
Find hundreds of jobs for principals, assistant principals, and other school leadership roles.
View Jobs
Administrator Jobs
Over a thousand district-level jobs: superintendents, directors, more.
View Jobs
Support Staff Jobs
Search thousands of jobs, from paraprofessionals to counselors and more.
View Jobs

Read Next

Law & Courts Supreme Court Allows Trump Admin. to End Teacher-Prep Grants
The high court, over three justices' dissent, granted the administration's request to remove a lower court's block on ending the grants.
5 min read
Erin Huff, a kindergarten teacher at Waverly Elementary School, works with, from left to right, Ava Turner, a 2nd grader, Benton Ryan, 1st grade, and 3rd grader Haven Green, on estimating measurements using mini marshmallows in Waverly, Ill., on Dec. 18, 2019. Huff, a 24-year-old teacher in her third year, says relatively low pay, stress and workload often discourage young people from pursuing teaching degrees, leading to a current shortage of classroom teachers in Illinois. A nonprofit teacher-training program is using a $750,000 addition to the state budget to speed up certification to address a rampant teacher shortage.
Erin Huff, a 24-year-old kindergarten teacher at Waverly Elementary in Illinois, pictured here on Dec. 18, 2019, says low pay, high stress, and heavy workloads often discourage young people from entering teacher preparation programs. The U.S. Supreme Court on April 4, 2025, allowed the Trump administration to immediately terminate two federal teacher-preparation grant programs.
John O'Connor/AP
Law & Courts Groups Sue Over Trump's Cuts to Education Department Research Arm
This suit seeks the restoration of Institute of Education Sciences staff and contracts abruptly canceled by the Trump administration.
3 min read
Supporters gather outside the U.S. Department of Education in Washington to applaud Education Department employees as they depart their offices for the final time on Friday, March 28, 2025. The rally brought together education supporters, students, parents, and former employees to honor the departing staff as they arrived in 30-minute intervals to collect their belongings.
Supporters gather outside the U.S. Department of Education in Washington to applaud Education Department employees as they depart their offices for the final time on Friday, March 28, 2025. Two organizations representing researchers are suing the department in an attempt to restore the agency's data and research arm, the Institute of Education Sciences.
Moriah Ratner for Education Week
Law & Courts Supreme Court Appears Unlikely to Strike Down School E-Rate Program
The Supreme Court seems unlikely to strike down the E-rate program, though some justices questioned its funding structure and oversight.
5 min read
The Supreme Court in Washington, June 30, 2024.
The U.S. Supreme Court considers a major challenge to the E-rate program for school internet connections on March 26.
Susan Walsh/AP
Law & Courts Trump Asks Supreme Court for OK to Move Ahead With Deep Teacher-Training Cuts
The Trump administration on Wednesday asked the Supreme Court to allow it to cut hundreds of millions of dollars for teacher training.
2 min read
President Donald Trump, left, holds up a signed executive order as young people hold up copies of the executive order they signed at an education event in the East Room of the White House in Washington, Thursday, March 20, 2025.
President Donald Trump, left, holds up a signed executive order as young people hold up copies of the executive order they signed at an education event in the East Room of the White House in Washington, Thursday, March 20, 2025. The Trump administration asked the Supreme Court to permit the cut of funding for teacher training programs.
Ben Curtis/AP