Texas Supreme Court Declares School Funding System Unconstitutional

The Texas Supreme Court struck down the state's school funding system on November 22, finding that it had evolved into an unconstitutional state property tax. In Neeley v. West Orange-Cove, the court found 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.” Nonetheless, the court reversed the trial court's holding that “the State's school finance system fails to provide an adequate, suitable, and efficient education system” as required by the state constitution's education article.

June 1 Legislative Deadline

Looking forward, the court warned that “[i]t would be arbitrary . . . for the Legislature to define the goals for accomplishing the constitutionally required general diffusion of knowledge, and then to provide insufficient means for achieving those goals.” The court also highlighted the fact that “[t]he State funds only about 38% of the cost [of K-12 education], down from about 43% in [1995], the lowest level in more than 50 years.” Moreover, the court stated that “many districts have been created as tax havens allowing property owners to escape paying their fair share of the cost of public education in Texas,” which violates the constitutional requirement for “efficiency.” Plaintiffs' co-counsel David Thompson observed that the 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.”

All eyes will be on the legislature to cure the constitutional deficiencies, an effort that may require significantly greater financial capacity for school districts or new state revenue. “We hope the Legislature will heed the 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," said Mark Trachtenberg, plaintiffs' co-counsel. The court set a June 1, 2006 deadline for legislative action.

Adequacy Definition Upheld

Elsewhere in its opinion, the court rejected the state's arguments that: (1) plaintiff school districts lacked standing; (2) the issues in the case were “political questions” and are “judicially unmanageable”; and (3) the court should use a rational basis test. The court also agreed with the trial court's definition of adequacy, with slight modification:

To fulfill the constitutional obligation to provide a general diffusion of knowledge, districts must be reasonably able to provide "all Texas children . . . access to a quality education that enables them to achieve their potential and fully participate now and in the future in the social, economic, and educational opportunities of our state and nation.” TEX. EDUC. CODE § 4.001(a) (emphasis added). Districts satisfy this constitutional obligation when they are reasonably able to provide all of their students with a meaningful opportunity to acquire the essential knowledge and skills reflected in . . . curriculum requirements . . . such that upon graduation, students are prepared to “continue to learn in postsecondary educational, training, or employment settings.” TEX. EDUC. CODE § 28.001 (emphasis added) . . .

The supreme court added the “reasonably able to” phrases and rejected state defendants' argument that the statutory language was merely “aspirational” and should not be used for the constitutional definition.

In examining the trial court's decision, the court cited a list of shortfalls in available educational resources and “much evidence . . . that many schools and districts are struggling to teach an increasingly demanding curriculum to a population with a growing number of disadvantaged students, yet without additional funding needed to meet these challenges.” The court concluded that

[t]here are wide gaps in performance among student groups . . . Non-completion and dropout rates are high, and . . . the rate of students meeting college preparedness standards is very low. There is also evidence of high attrition and turnover among teachers statewide, due to increasing demands and stagnant compensation.

However, the court relied on “undisputed evidence” of “steadily improved” standardized test scores, “even while tests and curriculum have been made more difficult,” and improved NAEP scores relative to other states to conclude that the system has not yet reached the level of a constitutional violation on adequacy grounds.

The court stated that “[d]eficiencies and disparities in public education that fall short of a constitutional violation find remedy . . . through the political processes” and called for the legislature to respond to the need for major restructuring of education finance in Texas.

Prepared by Molly A. Hunter, November 29, 2005