Judge finds Texas school finance system ‘unconstitutional’

Special to the Current

An Austin district judge last week held that the state’s school finance system is unconstitutional and that capturing property tax dollars to help pay for public schools is, in essence, a state property tax.

District Judge John Dietz of Austin

District Judge John Dietz

District Judge John Dietz issued his final written judgment on Thursday at the end of the longest and most extensive school finance trial in state history.

The case that pitted school districts, including Glen Rose Independent School District, in a massive lawsuit against the state. GRISD is part of the Texas School Coalition, which represents school districts that return tax dollars raised from their local homeowners and businesses to the state.

Since 1993, such revenue-contributing districts have given more than $16 billion to the statewide system and they are now contributing about $1 billion annually, the coalition said in a news release after the ruling was announced.

All of the school district plaintiff groups succeeded in their claims. Dietz held that the Calhoun County ISD plaintiffs – a group of 88 school districts — had proven that the current school finance system has evolved into an unconstitutional statewide property tax.

Moreover, the system fails to sufficiently fund Texas schools at the level required to provide a constitutionally adequate education, the judge found.

The districts that challenged the financing scheme showed that “the state has made no effort to determine the costs of meeting its own standards or of bridging the performance gaps,” Dietz wrote in his findings.

The state’s financing system does not ensure “a constitutionally adequate education for all Texas schoolchildren,” he also concluded. Dietz added that the system isn’t fair because poorer areas of Texas don’t have enough funds to keep up with wealthier areas.

GRISD is considered one of the state’s “tax wealthy” school districts because of the very large taxpayer in its backyard, the Comanche Peak Nuclear Power Plant. Such wealthy school districts must give back part of their tax dollars in a process known as “recapture” under the so-called “Robin Hood” school finance plan.

“Because of statutory mandates, rising academic standards and declining state funding, districts have lost meaningful discretion over their local property tax rates and have no opportunity to provide enrichment programming desired by their local communities,” said John Turner, one of the attorneys with Haynes and Boone, LLP, which represented the Calhoun County ISD plaintiffs.

“Judge Dietz correctly found that this situation results in a de facto state property tax, which is prohibited under the Texas Constitution,” Turner added in a prepared statement.

Glen Rose ISD Superintendent Wayne Rotan could not be reached for comment.

Judge Dietz’s orders now set the stage for an appeal by the state, possibly directly to the Texas Supreme Court.

As part of the final judgment, Judge Dietz enjoined the operation of the school finance system but delayed the effect of the ruling until July 1, 2015, to give the Texas Legislature an opportunity to address the system’s constitutional shortcomings.


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