After weeks of shoring up support across the state, a group of Texas school districts united under the Texas Taxpayer & Student Fairness Coalition (TTSFC) filed suit against the state Oct. 11, 2011, challenging the constitutionality of the Texas school finance system. The coalition represents more than 200 districts from across the state, with more likely to sign on as the challenge progresses. Individuals representing taxpayers are also named as plaintiffs.

A separate lawsuit by the Texas School Coalition (120 districts) will also challenge the system, but has not yet been filed. This suit will address some of the same issues as those raised by the TTSFC.

The TTSFC is led by the Equity Center and tends to represent less-wealthy school districts. The lawsuit challenges the constitutionality of the current system on several grounds:

1.      Taxpayer equity. A previous ruling in 2005 declared that “citizens who were willing to shoulder similar tax burdens should have similar access to revenues for education.” The lawsuit asserts that taxpayers in school districts of different wealth levels do not receive similar benefits. (Example: A taxpayer in Belton has a 42% higher tax rate than the rate paid in Glen Rose, but the Glen Rose ISD receives 50% more in revenue per weighted student.) The lawsuit notes that approximately 45% of school districts will not be able to regain funds lost by the recent budget cuts even if the taxpayers are willing to pay the maximum possible tax rate of $1.17.

2.      Efficiency/equity. The courts have previously ruled that the school finance system is not efficient as required by the constitution if districts “do not have substantially equal access to available revenues to perform their mission.” The suit presents a number of examples comparing the per-student funding levels of poorer and wealthier districts.

3.      Disequalization caused by local supplementation. The plaintiffs hope to demonstrate that local supplementation has created an unequalized system, because a significant portion of the revenue generated by property taxes is not subject to “Robin Hood” recapture, thus allowing wealthier districts to raise more money overall and provide enriched education opportunities.

4.      Statewide property tax. By the 2010-11 school year, more than 200 districts were taxing at the maximum rate of $1.17. The coalition maintains that the $1.17 rate is both a ceiling (because of the statutory cap) and a floor (because of the need to provide adequate funding) for many districts, leaving them with no meaningful discretion and turning the taxes into an unconstitutional state property tax.

5.      Suitability. Previous courts have ruled that “if the Legislature substantially defaulted on its responsibility such that Texas school children were denied access to that education needed to participate fully in the social, economic, and educational opportunities available in Texas, the ‘suitable provision’ clause [of the Constitution] would be violated.” The lawsuit points to the increasing demands of the statewide accountability system, combined with the underfunding of the public schools in the most recent legislative session.

6.      Arbitrariness. The coalition cites a Supreme Court decision that provided that state action is unconstitutionally “arbitrary when it is taken without reference to guiding rules or principles,” and maintains that the funding differences laid out in the lawsuit demonstrate a lack of guiding rules or principles.

7.      Equal protection. The plaintiffs assert that the school funding system is in violation of the Texas Constitution’s equal protection clause, and of subsequent interpretations that the clause “requires that all persons similarly situated should be treated alike.”

The Texas School Coalition represents a different type of school district (typically not the poorer districts included in the TTSFC) and thus will not include all of the above arguments in its lawsuit, expected to be filed in late October or early November. The issues addressed will include the lack of access to sufficient funding and the de facto imposition of a statewide property tax.

Previous successful challenges to the state’s school finance system have resulted in increased funding for public education in the subsequent legislative session. The cases typically take many months, and it is unknown whether a ruling will be made by the time the next regular session begins in January 2013.