School finance lawsuits to be heard in court this fall - Community ...

16 | NEWS | Community Impact Newspaper • Northwest Houston Edition
Lawsuit
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“Then the Edgewood cases in the ‘80s
and ‘90s dealt with issues in hope of bringing
more equity into the system,” he said.
“Over time the gains that those lawsuits
made were eroded by changes in legislation
that complicated the funding system
and made it less and less equitable.”
In 2006, legislation mandated a statewide
reduction in property taxes by onethird,
which resulted in a loss of revenue
for school districts. To make up for the
lost funding, the legislature guaranteed
that each district would receive target
revenue based on money it would have
received from weighted average daily student
counts and the district’s maintenance
and operations tax rate from the 2005-06
school year.
“Until the recession hit, the state was
doing good enough economically that
they could use increased revenue from
sales tax to offset the shortage and the lack
of a permanent funding system to offset
what [districts] gave up,” Freeman said.
“Taking away that third of the property tax
revenue was the major cause of the [budget]
shortfall last session.”
In addition, the amount of target revenue
a district receives can differ by thousands
depending on local property values, rate
of increase in property values, enrollment
growth, level of tax collections and loss of
A history of school
district finance issues
in Texas: 1947-2012
value from a local homestead exemption
when House Bill 1 was passed in 2005.
“The factors that originally impacted
and caused the differences in target revenue
in 2005 are essentially the same in the
current finance system,” Snow said. “The
school finance system has not been overhauled,
just patch-worked.”
Local effects
In Cy-Fair ISD, an explosion of student
growth and a local property tax exemption
hindered the amount of state funding the
district received after the target revenue
system was put into place.
“In 2005 and 2006, it was the period of
greatest enrollment growth the district
had seen in its history,” Snow said. “Over
that two-year period we grew by about
13,000 students, and our property value
growth increased rapidly as well.”
Despite property value growth, CFISD’s
optional homestead exemption limited
the amount of property taxes collected by
the district, which resulted in less funding
per student from the state. About 60
percent of CFISD’s taxable value comes
from residential homes, which is a higher
percentage than the other Harris County
school districts with a local exemption,
Snow said. In addition, student enrollment
growth outpaced the property value
increase, resulting in less funding.
The potential amount of property tax a
district collects depends on whether it has
1968–1971
Rodriguez v. San Antonio
In 1968, a group of parents filed a lawsuit on behalf
of students who lived in districts with a low property
tax base. Although a federal district court ruled in
1971 that the state’s school finance system was
unconstitutional, the decision was appealed to the
state Supreme Court, which overturned the ruling.
1947–1949
Gilmer-Aikin Laws
A committee was formed in 1947 to address efficiency in public schools,
suggestions from which would come before the legislature in 1949.
Several bills were passed because of the committee, which resulted in
the consolidation of school districts, state equalization funding, higher
teacher salaries and the change to state funding based on attendance.
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On June 26, another school finance lawsuit was filed by the Texas Charter School Association, which represents
numerous charter school groups around the state, including Harmony Public Schools, which has several Northwest
Houston campuses.
“School finance litigation has been going on for decades, but charter schools [in Texas] have only been around for 15
years,” said David Dunn, executive director of the TCSA. “The courts have never reviewed the school funding system
through the lens of charter schools, and we think it’s time they did so.”
There are two pots of state funding for Texas school districts: maintenance and operations—which provides for instruction—and
interest and sinking money, which help pay for new facilities. Both charter schools and independent school
districts receive M&O funding, but charter schools receive no I&S dollars since they do not have a local tax base—one
of the main reasons why they have filed the lawsuit.
The charter school lawsuit has not yet been consolidated with the other school finance lawsuits, but it is a possibility,
Dunn said.
smaller properties, such as houses, or larger
commercial facilities such as an oil refinery
or a power plant, said Chandra Villanueza,
policy analyst with the Texas Center for
Public Policy Priorities.
“A lot of suburban districts are bedroom
communities and have all houses, so they
have a high number of students, but property
values aren’t as high, even if it is more
expensive housing,” she said.
Next session
Legislation regarding education and
school finance is expected to gain steam
slower than before the last session, Anderson
said. This may be because two members
of the legislature’s public education
committee are leaving: state Rep. Rob
1984–1989
Edgewood ISD v. Kirby
Representatives of Edgewood ISD filed this suit because of
the state’s reliance on local property taxes to fund school
districts, since property values differ greatly from district to
district. The state Supreme Court deemed the school finance
system unconstitutional and tasked the legislature with developing
an equitable system by the 1990-91 academic year.
1989–1995
Robin Hood plan
The legislature had not developed a plan by June 1990, so the Supreme Court offered
another solution: transfer money from property wealthy districts to poor ones to equalize
the amount each district spends per student. The Edgewood v. Kirby case was appealed
several more times in the early ‘90s, until a multi-option plan was approved in 1993
through Senate Bill 7 to make the system more equitable.
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Texas Charter School Association lawsuit
Cy-Fair ISD Community Leadership Committee
The district’s Community Leadership Committee aims to better inform community members on legislative issues that
affect the district. For more information, or to get involved, visit www.cfisd.net/dept2/govt/governmental.htm.
Eissler, R-The Woodlands, lost his seat in
the primary election, and state Rep. Scott
Hochberg, D-Houston, is stepping down,
Anderson said.
“Both of them are very knowledgeable
about school finance, so to have two experts
gone next year is a concern,” Anderson said.
Additionally, it is unlikely legislators
will make any changes to the school
finance system until there has been a final
ruling in the lawsuits.
“We could be looking at the legislative
session ending in 2015 before we start
seeing any movement on school finance,”
Snow said.
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CFISD finance or School finance
2005–2006
Property tax relief
A cap was placed on school districts in 2006 as to how much
they could raise taxes, which forced many districts to compress
their rates. The legislature created a target revenue system
to ensure no district lost money, which means each district
receives no less than the amount of state and local revenue per
weighted student that they received in the 2005-06 year.
2011–2012
School finance lawsuits
A handful of school finance lawsuits were filed in late
2011 and through the spring of 2012. Travis County
Judge John Dietz will hear these cases together this
October. Whichever side wins, the decision is expected to
be appealed to the state’s Supreme Court.
source: texas state historical Association, texas taxpayers and research Association: “An introduction to school Finance in texas”
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