Texas
HISTORICAL BACKGROUND
In the late 1960s, plaintiffs in a property-poor and underfunded school district filed Rodriguez v. San Antonio Independent School District, 411 U.S. 1 (1973). The plaintiffs in this case sought to declare the state’s school funding system unconstitutional due to gross disparities in funding among Texas school districts. In 1973, the U.S. Supreme Court rejected plaintiffs’ arguments, holding that education is not a “fundamental interest” under the federal constitution.
Following Rodriguez, a wave of lawsuits sought similar relief under state constitutions. In Texas, this state court litigation began with Edgewood Independent School District v. Kirby, 777 S.W.2d 391 (1989). In the Texas Supreme Court, the Edgewood plaintiffs successfully argued that Texas’s education finance system violated the education clause of the state constitution. A series of legislative responses followed, each revising the state’s education finance system. The first two legislative efforts prompted litigation in Edgewood II, 804 S.W.2d 491 (1991), and Edgewood III, 826 S.W.2d 489 (1992). After the third legislative effort, the court deemed the education finance scheme constitutional in Edgewood IV, 893 S.W.2d 450 (1995). The new system included partial recapture of local revenues from the state’s wealthier school districts for redistribution to property-poor districts.
The litigations at the end of the 20th century, however, did not end legal battles over state financing of education. Indeed, Texas has been a hotbed of educational equity and adequacy litigation in the new millennium. In 2001, four wealthy school districts filed a lawsuit, West-Orange Cove Consolidated ISD v. Nelson, claiming that the provision of the education finance system that limited local tax rates to $1.50 per $100 of assessed valuation constituted a violation of the state constitution. In 2003, the Texas Supreme Court voted 8-1 to reverse dismissal of the complaint and sent it back to the trial court for further consideration in West Orange-Cove Consolidated ISD v. Nelson, 107 S.W.3d 558. As the litigation proceeded, plaintiff-intervenors expanded the scope of the case by bringing a challenge against the state’s school funding as inadequate and adding hundreds of Texas school districts to the plaintiff ranks.
In 2005, the case reached the Texas Supreme Court again in West Orange-Cove Consolidated ISD v. Neeley, 176 S.W.3d 746. The Texas Supreme Court held that the school finance system unconstitutional on the grounds that it violated the state constitution’s prohibition on a statewide property tax. On the other hand, the court found that the financing system did not violate the state constitution’s education article. The court determined that the state’s core constitutional obligation under the education article was to ensure that school districts be “reasonably able to provide all of their students with a meaningful opportunity to acquire the essential knowledge and skills reflected in…curriculum requirements….” It found this mandate had been met, as evidenced by students’ improvement on standardized test scores. Evidence of other significant defects in the quality of public education in Texas did not impact the court’s decision.
RECENT EVENTS
Between October and December 2011, in direct response to a $5.4 billion budget cut approved by the Texas legislature, over 500 school districts sued the state in four separate litigations. A group representing charter schools filed a separate lawsuit as well. All five cases were consolidated as Texas Taxpayer and Student Fairness Coalition v. Williams.
After hearing twelve weeks of testimony, Texas district court judge John Dietz held that the state’s education finance system was unconstitutional in Texas Taxpayer and Student Fairness Coalition v. Williams. Judge Dietz found that the state failed to provide adequate funding to districts, failed to distribute the funding fairly, and denied low wealth school districts meaningful discretion in setting their tax rates because the lack of state funds forced them to tax at or near the maximum rate.
On May 27, 2013, the Texas legislature voted to restore $3.4 billion to schools, concentrating funds in lower and middle-income districts. In light of these legislative developments, Judge Dietz reopened Texas Taxpayer and Student Fairness Coalition v. Williams. At the new trial, plaintiffs argued that the amount of money restored by the state was still constitutionally insufficient and that student achievement rates were at an historical low point.
In August 2014, Judge Dietz once again found Texas’s education finance system unconstitutional. In his sprawling 364 page decision, the Judge noted multiple constitutional defects in the system. The remedy Judge Dietz ordered for these violations was dramatic. Specifically, he enjoined all state spending through the current education finance system, unless the state corrected constitutional defects.
The Texas Supreme Court unanimously reversed Judge Dietz. In Morath v. The Texas Taxpayer and Student Fairness Coalition et al, the Court held that legislative actions meeting a “reasonableness” test would not be struck down by courts – and that the current education finance system satisfied that test. It further held that, in its view, adequacy depends not on inputs but on outputs — i.e. results. At the time, the Court found that schools passed the “results” test because the overwhelming majority of school districts and individual campuses met state accountability and accreditation standards.