'Robin Hood' system rejected

September 16, 2004

AUSTIN – Texas' education funding system is unconstitutional and must be dramatically reshaped to put more money into schools, a state judge ruled Wednesday in a landmark decision touching millions of schoolchildren and taxpayers.

State District Judge John Dietz said the $30 billion-a-year system is collapsing because of inadequate state money and the inability of school districts to meet increasing state and federal requirements.

"The state's school finance system fails to provide an adequate, suitable education as required by ... the Texas Constitution," the judge said in a ruling that came after 5 1/2 weeks of testimony in lawsuit brought against the state by more than 300 school districts, including Dallas and Houston.

Attorney General Greg Abbott said the state would appeal directly to the Texas Supreme Court, bypassing an intermediate appellate court. The high court has previously issued several orders on school finance – including a 1995 ruling that upheld the current "Robin Hood" law.

The state appeal and the judge's decision to not enforce his order for one year will give the Legislature more time to fix the system in its next regular session in 2005 or during a special session. A special session this year failed to produce a new funding law.

State leaders insisted Wednesday that Judge Dietz's decision has not affected their plans to seek a funding solution – although there was relief among some lawmakers that the judge did not uphold the existing funding method. A decision for the state could have stalled efforts to overhaul the finance system.

"This was just the first step in the legal process that is ongoing," Gov. Rick Perry said in a prepared statement. "A legislative solution is preferable to a judicial mandate. ... "

House Speaker Tom Craddick said the decision "confirmed what many of us long suspected, that the current 'Robin Hood' school finance system fails to meet constitutional standards."

The speaker said he would urge the governor to declare school finance an emergency measure when the Legislature convenes in its regular session in January.

Lt. Gov. David Dewhurst, who has urged the Legislature to enact a new school finance law for more than a year, said: "Our public schools need more resources tied to accountability, and our homeowners and businesses need property tax relief."

Judge Dietz's decision was handed down in the same Travis County courtroom where former State District Judge Harley Clark first declared the state system unconstitutional in 1987. Judge Clark's ruling eventually led to the current funding methods, approved in 1993.

The ruling from Judge Dietz, which was delivered to a packed courtroom, came after several hours of closing arguments from attorneys.

The judge said he would issue a written order around Oct. 1 along with an injunction to cut off all funding for public schools effective Oct. 1, 2005 – unless the Legislature fixes the school finance system to meet constitutional standards before that date.

His decision hinged on two major findings:

• That state funding is inadequate for school districts to meet academic requirements and provide a suitable education for students. Those requirements stem from the state's accreditation, accountability and student assessment programs.

• That school districts have "lost all meaningful discretion" in setting local property tax rates because of the state-imposed cap of $1.50 per $100 valuation. The state's tax rate limit – now affecting two-thirds of all districts – violates a constitutional ban on state property taxes.

In remarks preceding his order, the judge called on the state to focus on the "significant" achievement gap between economically disadvantaged and more affluent students – noting that half the students in Texas fall into the disadvantaged category.

"The key to changing our future is to close the gap in academic achievement between the haves and the have-nots," he said, adding that the "rub" is the cost of closing the gap needed to improve instruction for those students.

"Money invested in education benefits first the children of Texas, our future. It also benefits our entire economy because educated people make more money, spend more money and pay more taxes."

Mr. Abbott emphasized that the final say will come from the Supreme Court, which he hopes will hear the case as an expedited appeal. That would allow a ruling from the high court well before Judge Dietz's injunction takes effect in fall 2005.

Dallas lawyer George Bramblett, lead attorney for the plaintiff school districts, said his clients "are optimistic about an expedited appeal because we want to get this resolved as soon as we can."

Former Dallas Superintendent Mike Moses, a key plaintiffs' witness, called the ruling "the right decision, and a decision that school districts very much need. Some are desperate for relief, and I hope this is a signal to the Legislature that Texans want something substantial to happen."

Richardson Superintendent Jim Nelson, a former state education commissioner like Dr. Moses, said the decision would increase pressure on lawmakers to take action once they convene in their regular session in January.

"Had this decision gone the other way, it would have been very difficult to have school finance rise to a very high level on the agenda of the next session. Now, it will be at a very high level," he said.

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