Judge Rules Texas School Finance System Unconstitutional; Case Likely Headed To State Supreme Court

Source: Terrence Stutz / The Dallas Morning News

In a ruling that could signal a huge fiscal impact on Texas, a state judge ruled Monday that the Texas school finance system is not delivering enough funding for schools to do their job and is sending out that money in an unfair and unconstitutional manner.  State District Judge John Dietz, who heard 12 weeks of testimony before issuing his decision, gave the more than 600 school districts who sued the state most of what they hoped for – though they will be successful only if the Texas Supreme Court upholds the ruling. The state is expected to appeal to the high court, which could hear the case later this year.

In an oral ruling from the bench that was handed down after closing arguments from both sides, Dietz ruled the school funding system is inadequate and inequitable, and must be overhauled. “There is no free lunch. We either want increased standards (in schools) and are willing to pay the price, or we don’t,” he said from the bench. “However, there is a cost to acting, namely a tax increase. And there is a cost to not acting, namely the loss of our competitive position as a state.” And the judge added: “The longer we wait, the worse it gets. The time to speak is now.”

Nearly two-thirds of the school districts in Texas – including Dallas and dozens of other North Texas districts – jumped into the court case after the Legislature made unprecedented funding reductions in 2011 that forced massive job cuts and larger classes across the state. At the same time, the state imposed a new testing program that has seen high failure rates among high school students who were tested. Unlike previous exams, the state offered no financial aid to help improve the skills of those students and many face the prospect of no diploma at graduation.The funding decreases combined with the higher state standards was the last straw for many districts as they signed up with the four plaintiff groups who are seeking billions of additional dollars and a new system of paying for public education.

Legislative leaders said they had no choice but to reduce funding levels given the $23 billion revenue shortfall that the state faced in 2011. In addition, Gov. Rick Perry and most Republicans adamantly opposed any kind of tax increase to ease the situation. But the consequences for many school districts were severe – a point that was emphasized by several superintendents and school finance experts during the lengthy trial, which began back in October. The Richardson school district, for example, was forced over the last two years to request class size waivers that permitted 550 elementary classes to exceed the state’s 22-pupil limit for kindergarten through fourth grade. The previous two years, only 13 waivers were needed.

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