George on the Lege, Part 5 – School Finance

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by George Christian

Public education has long commanded the lion’s share of state resources and, consequently, controversy over how the money should be raised and spent. Texas has historically spent nearly half of its general revenue on the maintenance and operation of “public free schools,” which supplement state aid with property taxes raised at the local school district level. Nothing in the Texas Constitution, however, explicitly requires that the state finance public education through any particular mechanism (such as the state-local share), just that the legislature has a duty “to establish and make suitable provision for the support and maintenance of an efficient system . . .” (Art. VII, Sec. 1).

This modern system of making public education a shared responsibility of state and local governments originated in legislation enacted by the 50-th Legislature in 1949. Prior to this time, public schools had largely been funded at the discretion of local taxpayers, whose interest in the quality of education could (and did) vary widely. In addition to inequality of funding and the lack of minimum educational standards across the state, claims of racial discrimination in the school system became increasingly prevalent in the 1930s and 1940. When the legislature deadlocked over a minimum salary schedule for teachers in the 1947 legislative session, Governor Beauford H. Jester appointed a joint legislative committee to study Texas’ public education system and make recommendations to the next legislature. The landmark Gilmer-Aiken Act, named after its sponsors Rep. Claude Gilmer and Sen. A. M. Aiken, was the product of this study.

For the first time, Gilmer-Aiken required the state, through the operation of funding formulas for schools, to provide a minimum level of funding for poor school districts based on average daily attendance. It also created an elected State Board of Education and the Texas Education Agency, made public schools available to every student for grades 1-12, and established a minimum 175 days of instruction in the school year. It should be noted that despite several rounds of school finance litigation and major legislative changes in school finance since 1949, the basic framework of Gilmer-Aiken remains intact to this day.

Despite the advances Gilmer-Aiken made in equalizing school funding between rich and poor school districts, constitutional litigation has been a central feature of the system, especially in the past 40 years. In May, 1968, more than 400 students of the Edgewood Independent School District in San Antonio walked out of class and marched on the district administrative office, complaining of inadequate funding for facilities, supplies, and teachers. In July of the same year, eight Edgewood ISD parents, backed by advocacy groups such as the League of United Latin American Citizens (LULAC), the American G.I. Forum, and the Mexican-American Legal Defense Fund (MALDEF) filed suit to invalidate Texas’ public school finance system on federal constitutional grounds. Ultimately, a divided U.S. Supreme Court rejected their claims, holding that education was not a “fundamental right” under the federal constitution. Rodriguez et al v. San Antonio Independent School District, 411 U.S. 1 (1973).

In 1984, the Edgewood plaintiffs filed a lawsuit in state district to invalidate the school finance system, this time on state constitutional grounds. The basis of the lawsuit involved the vast disparity in property wealth per student among the more than 2,000 Texas school districts. Since the basic funding mechanism of the Gilmer-Aiken system was (and remains) the property tax, districts with more taxable wealth—for example, industrial facilities, power plants, mineral property, commercial office buildings or shopping malls, or expensive homes—could raise far more revenue per pupil than property poor districts. This funding scheme, according to the plaintiffs, violated the Texas constitutional requirement for an “efficient” system of public free schools. The late Harley Clark, the Travis County district judge who heard the case, ruled that the system was unconstitutional and ordered the legislature to devise a more equitable one in the 1989 session. The Austin Court of Appeals reversed the decision, letting the legislature temporarily off the hook, but in October, 1989, the Texas Supreme Court reaffirmed Judge Clark’s judgment: Texas’ public school system was unconstitutional. Edgewood ISD vs. Kirby, 777 S.W. 2nd 391 (Tex. 1989).

The fallout from the so-called Edgewood I decision (there have been subsequent modifications of the original ruling, Edgewood II, III, and IV) is still in the air. The basic principle of Edgewood I—that an “efficient” system of public education requires school districts to enjoy “substantially equal access to similar revenue per pupil at similar levels of tax effort”—may have been settled, but the devil was and continues to be in the details. Following the Court’s ruling, then-Governor William P. Clements called four special sessions of the legislature, each of which failed to produce a plan. When a special master appointed by the Texas Supreme Court devised a finance mechanism whereby money would be transferred from property-wealth districts to poor ones (the so-called “Robin Hood” plan), the legislature promptly passed and Governor Clements signed a bill that, while it increased funding for public education by more than $500 million, did not force rich districts to share.

The Edgewood plaintiffs went back to court and once again prevailed, both at the district court and the Texas Supreme Court. On January 22, 1991, the high court held that rich and poor districts alike must participate in the school finance system. Although the court made it clear that it did not mean that funding per student had to be precisely the same in all districts, the legislature still had to come up with a way to redistribute at least some of the wealth from rich districts to poor ones. Governor Ann Richards, who had been elected in 1990 partly on the promise that she would solve the school funding crisis, backed legislation that created 188 county education districts (CEDs) with substantially equivalent property wealth. Revenue raised within a CED would be shared by all school districts. Each district could elect to impose an additional tax to enrich its own local programs. Problem solved? Not by a long shot.

 

Continued here, school financing in Texas from 1991 to the present.

Previous installments of George on the Lege:

Part 4: Concealed Weapons

Part 3: Redistricting

Part 2: Cutting Spending

Part 1: Budget Crises, Today and Yesterday

The Texas Legislature: Online

Texas Public Education at The Texas Tribune

Photo: Wing-Chi Poon  [CC-BY-SA-2.5] via Wikimedia Commons