Another Lawsuit Challenges Texas School Financing<TAB>

DALLAS — A third lawsuit seeking to overturn Texas’ system for financing public education was filed Tuesday in a Travis County state district court in Austin.

The lawsuit brought by the Mexican American Legal Defense and Educational Fund contends that the system devised by the Texas Legislature to fund public education violates the state constitution.

Attorney David Hinojosa said the financing method is arbitrary and does not provide “an efficient system of public free schools” as mandated by Article VII, section 1, of the Texas constitution.

The funding mechanism allows property-rich districts to levy a lower tax rate than poorer districts, which tend to have more lower-income students and students that require bilingual instruction, Hinojosa said.

“The state has left many Texas children behind by blatantly defying its constitutional duty to fully support their education,” he said. “Every Texas child should have the opportunity to go to college, and this lawsuit will ensure that opportunity.”

The Edgewood Independent School District in San Antonio is the lead plaintiff in the MALDEF suit.

Hinojosa said the Edgewood district collects $5,472 per student with its legal maximum property tax rate of $1.17 per $100 of assessed value, while the neighboring Alamo Heights Independent School District generates $6,242 per student with a tax rate of $1.04 per $100 valuation.

Texas school districts can levy an operations property tax rate of $1.04 per $100 of assessed value, but can go to a ceiling rate of $1.17 per $100 with voter approval. The maximum levy for debt service is 50 cents per $100.

The 2011 Legislature reduced state aid by $4 billion over fiscal 2012 and 2013 from what would have been allotted under the funding mechanism, and did not fund any growth in enrollment. In addition, lawmakers eliminated $1.4 billion of educational grants.

Attorneys representing a coalition of property-rich districts filed a school funding lawsuit Dec. 9. The suit contends that the property tax rate limitations put on school districts constitute a statewide property tax, which is prohibited by a constitutional amendment approved by Texas voters in 1979.

The suit was filed by Mark Trachtenberg and John Turner of Haynes and Boone LLP on behalf of the Texas School Coalition, a 60-member group of mostly property-rich districts.

The filing said the schools have paid almost $15 billion from local tax collections into the state system for redistribution since it was developed in the early 1990s. The districts expect to send the state another $1 billion in fiscal 2012.

Turner said the funding system is constitutionally inadequate.

“Local tax dollars raised above a certain level ought to be available for local enrichment and not be used to compensate for funding the state has failed to provide,” he said.

 The Texas Taxpayer & Student Fairness Coalition filed the initial lawsuit challenging the current funding system on Oct. 10. That suit called the school funding system “inadequate, unfair, and lacking in local control.”

A fourth lawsuit from a coalition of large school districts is expected to be filed this week.

The lawsuits may be combined into a single action by the district court, with a   resolution expected by the time the Legislature convenes in early 2013.

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