Area superintendents say system provides inadequate, inequitable funding for students

As many school districts struggle to meet statewide academic standards with fewer resources, some area superintendents are banking on five lawsuits to force the Texas Legislature to funnel more funds toward education.

The first lawsuit was filed in October, just four months after the Legislature passed Senate Bill 1 that cut $5.4 billion from public education, including $1.4 billion in grants.

Within Community Impact Newspaper's Central Texas coverage area, seven of the nine school districts are represented among five lawsuits filed against the state. Georgetown and Leander ISDs have opted not to join in any lawsuits.

For the other seven districts, superintendents say filing lawsuits is their only means to see legislation that would boost public education funding at a time when school districts have faced budget cuts.

"I'll say that I don't think all legislators are interested in having all kids funded the same. They're not. In their district, they're interested in having certain funding rules, but not across the state," Hutto ISD Superintendent Doug Killian said.

Pflugerville ISD Superintendent Charles Dupre said adequacy is one of the major themes in the lawsuits.

"With the expectations that have been established, there's not adequate funding. [The state is] not meeting the constitutional levels for adequate funding," he said during an April 5 superintendents' forum at Community Impact Newspaper.

Filing suit

In October, the legal firm Gray & Becker P.C. filed the first lawsuit against Texas Education Commissioner Robert Scott, Comptroller Susan Combs and the Texas State Board of Education. The firm represents 415 school districts, including Pflugerville and Hutto ISDs, in what is known as the Texas Taxpayer and Student Fairness Coalition.

The districts involved in the suit are seeking adequate or equitable funding that would provide each district with the same amount of funding per student, said Ray Freeman, deputy executive director of the Equity Center, which is assisting the Texas Taxpayer and Student Fairness Coalition in its lawsuit against the state.

"Obviously, appropriate funding would be funding that provided an efficient system of funding for schools, which from earlier finance cases has been defined as substantially equal access to substantially equal dollars for substantially equal effort," he said.

Each district receives state aid in the form of revenue per weighted average daily attendance, or WADA. WADA is defined as a measure for compensating school districts for educating students who cost more to the district, such as those in special education or gifted classes. Freeman said the problem is that not every district's revenue per WADA is the same. Some receive a couple of thousand dollars less per student than other districts based on the state's formula.

A second lawsuit, filed by Thompson & Horton LLP, focuses more on the inadequacy of how much funding districts receive versus the inequity of it, Austin ISD Superintendent Meria Carstarphen said. More than 60 school districts, including Austin ISD, Round Rock ISD and Hays CISD, are represented in the lawsuit.

"We were more about the arbitrary nature of how the finance system is set up and that it's simply not adequate enough," Carstarphen said.

The third lawsuit, filed by Haynes and Boone LLP and has support from the Texas School Coalition, focuses on the contention that the state is violating the Texas Constitution for having a de facto statewide property tax, which local districts set but the state caps at $1.17 per $100 assessed property value, said Mark Trachtenberg, a partner with Haynes and Boone.

"Then it is not a local tax rate because the state regulates it," he said.

He said districts want to have meaningful discretion to set local property tax rates.

The second claim in the suit states that districts do not have adequate funding to provide an education as required by the Texas Constitution, he said.

Six school districts are named as plaintiffs, but 85 total districts, including Lake Travis and Eanes ISDs, support it financially.

Two other lawsuits also address equity issues. The Mexican American Legal Defense and Education Fund Inc. coalition represents districts near the Mexico border and in San Antonio, and the Texans for Real Efficiency and Equity in Education group represents parents, students and taxpayers.

Declining school revenues

The origin of Texas' recent school finance woes arose from two separate bills the Legislature passed in the 2000s.

In 2006, House Bill 1 reduced local property tax rates for maintenance and operations (M&O) for most school districts from $1.50 per $100 assessed valuation to $1. This lower figure is known as the compressed rate by which the formula and target revenue is calculated for determining how much funding a district is guaranteed per student from the state.

Districts could increase the M&O rate up to $1.17 per $100 assessed property value but only with approval from voters for any rate over $1.04.

"With the target revenue system, those target revenue amounts are set in stone," said Dupre, whose district has the lowest amount per student in the Austin area. "Today you cannot point at any system or measure that explains why [PISD's] is substantially lower than someone else's and someone else's is substantially higher than other districts. And so the message that sends is that the students in my district are not worth the same amount as students in other districts."

The Legislature also funneled an additional $1.8 billion to aid with decreases from lowering the property tax rate, a measure Trachtenberg said was a temporary fix.

In June 2011, the Legislature approved an across-the-board $4 billion cut to public education plus an additional $1.4 billion cut to school grants. This reduced funding an average of $500 per student annually.

Freeman said the Fairness coalition just want students to be treated equally.

"The inequities in the system are so large that when you explain them to people and show them what's going on, everybody's just shocked that their government would allow this to happen, that the government would design and maintain a system that treats different people within the system so unfairly," he said.

Lawsuit timeline

In April, the lawsuits were consolidated to be heard by Travis County Judge John Dietz. Trial is scheduled to start Oct. 22, and Freeman said the speculation is that Dietz would like to hand down a decision in early December. The law firms are gathering expert witnesses and putting together testimony.

Round Rock ISD Superintendent Jess Chvez said that whichever side wins, the decision will be appealed to the Texas Supreme Court, delaying any final outcome. He said it might not be for another two legislative sessions before any final decision is made.

"All of us are in that mode of 'How long can we hold it together?'" he said.