Despite acknowledging flaws in the school finance system, the Texas Supreme Court upheld its constitutionality in a decision announced May 13, ending a nearly five-year legal battle.
More than 600 school districts, including Pearland ISD, joined a lawsuit in 2011 that challenged the state’s funding formula, which twice was deemed unconstitutional by former District Court Judge John Dietz in 2013 and 2014.
“The evidence for the unconstitutionality of our [state] funding system is so overwhelming I wrongly predicted there was no chance the Supreme Court could overturn the findings of the district court. Boy, was I wrong,” PISD Superintendent John Kelly said. “It took tortured language and 100 pages, but our Supreme Court found a way.” [polldaddy poll=9446951]
Alvin and Friendswood ISDs were not plaintiffs in the lawsuit, however, officials from both districts expressed similar disappointment in the ruling. With no change to the school finance system, local officials said they are forced to contend with the same funding challenges the formula has created over decades.
“Currently, it is impossible to keep up with cost-of-living increases for teachers’ salaries without a change in the formula,” FISD Superintendent Trish Hanks said. “Most people do not realize that additional taxes paid from increased property values accrue to the state, not the local district. I hope the Legislature addresses this very quickly.”
Local school officials continue to share their concerns with state legislators from the area, including Rep. Ed Thompson, R-Pearland, and Sen. Larry Taylor, R-Friendswood. Taylor, who is chairman of the Senate Education Committee, said the school finance system will be a top priority in the next legislative session, which begins in January.
“This kind of clears the air so we can go at it with the ability to make transformative changes,” Taylor said.
Supreme Court decision
After almost a year, the Supreme Court declared Texas’ school finance system constitutional. In the court’s 100-page opinion, Justice Don Willett called the formula “Byzantine” but said it met minimum standards of the state constitution.
It was the seventh time since the 1980s the Supreme Court ruled on the constitutionality of the system.
Although Willett expressed the need for reform, he said the role of the court was not to micromanage policy but determine the finance system’s legality.
“Texas’ more than 5 million school children deserve better than serial litigation over an increasingly Daedalean ‘system,’” he wrote in his opinion. “They deserve transformational, top-to-bottom reforms that amount to more than Band-Aid on top of Band-Aid. They deserve a revamped, nonsclerotic system fit for the 21st century.”
Gov. Greg Abbott supported the Supreme Court’s ruling, calling it “a victory for Texas taxpayers and the Texas Constitution.”
“The Supreme Court’s decisions ends years of wasteful litigation by correctly recognizing that courts do not have the authority to micromanage the state’s school finance system,” he said.
AISD Superintendent Buck Gilcrease and Kelly said they believe the decision was based on politics and the interests of state legislators.
“I guess the ultimate disappointment is our elected supreme court justices let politics get in the way, and instead of rendering any decision, in essence said, ‘It’s not our job to decide,’” Gilcrease said. “We don’t ask a lot of state Supreme Court justices—only when things get to a certain level are they required to step up and say something—but on this issue they were straight cowards.”
Funding challenges
When it comes to the school finance system, officials agree on one thing: it is complex. The state funding formula is about four pages long, Kelly said.
The school finance system includes problems with equity and adequacy, local officials said. However, they said difficulties stemming from state funding begin with the complexity of the formula.
“There’s only one guy in all of Texas who the superintendents trust to translate that funding formula into an accurate picture of how much the school districts will receive,” Kelly said. “This particular man, Omar Garcia, puts out a huge spreadsheet that you can fill in [with] your local numbers to get at least an approximation of what your funding might be. It is unbelievable how complex the funding formula has become, and it’s because of special interests.”
According to data compiled by PISD, the district receives less funding than 60 percent of districts in the Greater Houston area. AISD, FISD and PISD all fall below the state average for revenue per pupil, which is based on weighted average daily attendance.
WADA is a formula used to determine state funding and accounts for district enrollment as well as students who may require additional resources, such as special needs and English as a second language students.
Fast-growth districts face particular challenges, Gilcrease said. With AISD growing by about 1,000 students each year, the district must deal with issues, such as increasing staff and resources. Although AISD voters approved the district’s third bond referendum since 2009 in November, bond funding goes toward facility projects and not the general fund.
“Our local citizens are the ones having to incur all of that debt to build facilities that the state is benefiting from,” Gilcrease said. “The state’s general revenue fund increases because of our increase in the number of people that move in. They spend more money, increasing sales tax [revenue], yet [legislators] don’t offer [proportionate] help in return.”
Looking ahead
Local school officials agreed the school funding formula as it stands continues to benefit the state as opposed to its school districts. Texas stands to gain more from increased home values, they said. PISD’s property tax value will increase by 8 percent next year, according to the Brazoria County Appraisal District.
“Right now, the school funding formula is an unholy alliance between local property taxes and the state’s [contribution],” Kelly said. “State funding is primarily sales tax [revenue] and local funding is primarily property taxes. The formulas we’ve been stuck with since 2006 essentially make it so that as your local tax base increases, the state then decreases the amount of state aid that they must deliver to you.”
Although Taylor said it is too early to discuss possible changes to the school finance system, he and Thompson both recognized its importance heading into the next legislative session.
“I think the Legislature is fully invested in the fact that we’re going to have to deal with some of the issues that are out there,” Thompson said. “I think that’s something that we’re going to try to do: equalize the funding and bring it up to the standard that we really need to bring it up to.”
After tweaks and amendments over the last few decades, a complete reform is needed, Taylor said.
“I think it’s time to totally update the whole [finance system],” he said. “We’ve got formulas that are 30 years old, talk of education indexes that are 20 and 30 years old. These things have not been updated in forever. We need to look at it with a fresh set of eyes.”
Kelly said he has lost hope for major reform and believes legislators will continue to make only negligible adjustments.
“Just [making] minor changes to the existing funding system is like rearranging the deck chairs on the Titanic,” he said. “It’s the equivalent of trying to bail out the ocean with a teaspoon.”
