Additional Texas Funding Lawsuits Filed: Rural School & Community Trust

Additional Texas Funding Lawsuits Filed

Last Updated: November 29, 2011

This article appeared in the November 2011 Rural Policy Matters.

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As predicted in last month’s RSFN, the state of Texas now faces a second school funding lawsuit, and a third lawsuit was also recently filed. The challenges focus on the school finance plan that was passed in 2006. (See background in RSFN here and here.)

The first lawsuit was filed by the Texas Taxpayer & Student Fairness Coalition, which now represents more than one million students statewide from over 250 districts ranging from large and urban to small and rural. This suit is challenging the system on four grounds: its inequity, both for students and taxpayers; its arbitrary fund distribution scheme; its inadequacy; and its provision for a millage system that effectively operates as a state property tax.

The Texas School Coalition, a coalition of 120 Texas school districts will also challenge the tax rate provisions, asserting that their districts lack meaningful discretion, making the tax a de facto state property tax. They will also assert an adequacy claim, stating that districts lack sufficient funding under the current system.

In addition, a number of very large school districts will be represented by the law firm of Thompson & Horton, and are loosely referred to as the “Thompson & Horton suit.” These large school districts are also challenging the system on the statewide property tax point, adequacy, and adding a challenge to the efficiency of the distribution system.

Per student funding across Texas ranges from under $5,000 to over $10,000, and schools have withstood budget cuts of over $5 billion in the last year. Despite shortfalls, lawmakers refused to tap the state’s Rainy Day funds.

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Summary of all lawsuits: