Texas: Rodriguez and Robin Hood
Texas: Rodriguez and Robin Hood
Texas was the site of the original federal lawsuit that challenged school funding inequities as a violation of the U.S. Constitution. After the U.S. Supreme Court rejected that argument in Rodriguez, the advocates for low-income students first approached the legislature, which adopted a series of funding reform measures, most notably House Bill 72, a package of school reforms backed by the industrialist H. Ross Perot. However, the collapse of the oil boom put pressure on state budgets, and the state was unable to make up the disparities in education funding among districts.
In response, the Mexican American Legal Defense and Educational Fund (MALDEF) took advantage of language in that decision and filed suit in state court. Edgewood Independent School District v. Kirby was filed in 1984.
The arguments in the lawsuit showed clearly the vast discrepancies in spending among Texas districts because of the state’s reliance on local property taxes as the basis for most school revenue. As with California, low-wealth Texas districts were doubly disadvantaged: they had to raise tax rates in order to provide relatively low levels of funding for schools, while more affluent districts could keep taxes low and still raise enough revenue to spend relatively lavishly. At the time the case was filed, the 100 poorest districts had an average tax rate of 74.5 cents (per $100 valuation) and spent an average of $2,978 per student. The 100 wealthiest districts had an average tax rate of 47 cents and spent an average of $7,233 per student. Overall, per-pupil spending ranged from $2,112 to $19,333.
In 1989, the Texas Supreme Court ruled unanimously that the state’s funding system was unconstitutional. The court noted the vast discrepancies in spending and pointed out that the state’s foundation level, which did not cover school facilities or debt service, was inadequate. As a result, the court found, virtually all districts supplemented state funding with local funds, but while wealthy districts could pay for academic enrichment, poorer districts had to pay for basic services, such as debt service on construction bonds.
The legislature adopted a new funding system to meet the court’s mandate that allocated additional funds and set a goal of ensuring that 95 percent of Texas students would be in an “equalized” system. However, the legislation did not alter the disparities in taxation that made possible large discrepancies in funding and the state supreme court ruled in 1991 that the revised system was unconstitutional as well. It suggested as possible remedies the consolidation of districts and the consolidation of tax bases.
The legislature took the court up on those suggestions and in 1991 passed Senate Bill 351, which created 188 County Education Districts that could levy taxes and distribute those taxes to districts within them. Local districts could raise additional tax revenue; however, S.B. 351 set a cap on the tax revenue districts could raise. Thus, the bill was aimed at curbing the huge disparities that the Edgewood litigation identified. But a divided court ruled that S.B. 351 violated the state constitution because it was found to have levied a state tax without passing a constitutional amendment.
After a constitutional amendment to allow the taxing districts was rejected, the legislature adopted a new funding system in 1993. This system required wealthy districts to limit their wealth by one of five methods, including “recapture,” or paying credits to the state. Advocates for low-wealth districts argued that the system remained inequitable and did not address the needs of children in those districts. The wealthy districts argued that recapture was also unconstitutional. But the state supreme court in 1994 rejected all challenges and upheld the system for the first—and only—time. The structure, known as a “Robin Hood” finance system, remained in place for more than a decade.
In a shift, the funding system then came under attack in 2001 from wealthy districts, which filed to block it arguing that the funding scheme amounted to a statewide property tax. Low-wealth districts intervened initially to defend the recapture system alongside the state. Although lower courts rejected the claim on jurisdictional grounds, the state supreme court reversed them and allowed the lawsuit to go forward. The lawsuit was later amended to add an adequacy claim and several other wealthy and poor school districts, including Englewood ISD, filed suit alleging that the system was inadequate.
Although the court rejected the adequacy claim (and a separate claim of inefficiency filed by Edgewood), the court ruled that the school finance system’s cap on local property taxes violated the state constitution due to the increasing cost of education. The court emphasized, however, that so long as the state continued to rely so heavily on disparate property taxes, a wealth-sharing system such as the Robin Hood system would be needed. In response, the legislature reduced property taxes and increased state funds for local districts. While these moves were intended to increase funding equity over time, these efforts were muted because of “hold harmless” provisions and other changes in the law.
In 2011, the legislature cut funding for schools by $5.4 billion and districts went back to court to challenge the funding system. This time, two-thirds of the state’s districts joined the suit filed by four separate groups, which argued, in part, that the cuts, coming at a time when the state raised standards for students, made it impossible for them to provide an adequate education. Three of the plaintiff groups, including Edgewood ISD and over 400 other property-poor districts, also argued that the disparities in funding across districts were greater than at any time since 1993. For example, the poorest one-tenth of districts (which included Edgewood ISD) raised $1,443 less per child than the wealthiest one-tenth of districts, despite taxing 11 cents more (per $100 valuation). Edgewood ISD, home of the plaintiffs in the original lawsuit, had a tax rate at the maximum of $1.17 per $100 valuation and raised $5,808 per pupil, while its neighbor, Alamo Heights, had a tax rate of $1.04 per $100 valuation and raised $6,666 per pupil.
The districts were joined in the suit by charter schools, who argued that they received inadequate shares of school funding and no facilities funding. A group of interveners led by business interests challenged the system as inefficient, not on grounds of inadequate or inequitable funding, but instead targeting various statutes such as those governing teacher due process rights, teacher salary schedules and class size mandates. In February 2013, Judge John Dietz upheld each of the school districts’ claims and declared the funding system unconstitutional, but found the facilities claims of the charter schools and the interveners’’ claims “nonjusticiable” or incapable of being decided by the court. In issuing his ruling, Judge Dietz said the legislature had an obligation to provide adequate funding. “There is no free lunch,” he said. “We either want increased standards and are willing to pay the price, or we don’t.”12
As one veteran of the litigation put it, the long saga represented “great progress, then near death by a thousand cuts.”13
12. Quoted in Will Weissart, “Texas School System Finance Plan Unconstitutional, Judge Rules,” Huffington Post, February 4, 2013; http://www.huffingtonpost.com/2013/02/05/texas-school-system-finan_n_2622002.html