Judge: Texas School Finance System Unconstitutional

^{Editor’s note: This story has been updated throughout.}

Nearly three years after more than 600 Texas school districts filed litigation challenging the state’s school finance system, a Travis County district judge has ruled in their favor.

In an almost 400-page opinion released Thursday, District Court Judge John Dietz of Austin said that the state’s school finance system is unconstitutional not only because of inadequate funding and flaws in the way it distributes money to districts, but also because it imposes a de facto state property tax. Certain to be appealed by the state, the lawsuit that arose after lawmakers cut roughly $5.4 billion from state public education funding in 2011 will now continue to the Texas Supreme Court.

Though Dietz made no public remarks on Thursday, his decision is a reprise of an earlier oral ruling in February 2013. From the bench at the time, Dietz discussed what he called the “civic, altruistic and economic” reasons for supporting public education.

“We realize that others provided for us when we were children. We realize that children are without means to secure their education. Just as others provided for us when we were in school, now is the time when we provide for others,” he said, going on to describe the societal benefits of a well-educated population: lower crime rates, fewer people who need public assistance and a greater state income.

The judge ruled against the two parties in the lawsuit that did not represent traditional school districts. He held that the issues raised by Texans for Real Efficiency and Equity in Education — a group representing parents, school choice advocates and the business community that alleged that the current system was inefficient and overregulated — were better solved by the Legislature. He also ruled against the Texas Charter School Association, which argued that the state cap on charter school contracts and charters’ lack of access to facilities funding was unconstitutional.

Dietz reopened evidence in the trial for a four-week period earlier this year so that he could consider changes made by the 2013 Legislature, which restored about $3.4 billion of the $5.4 billion in public education cuts made in 2011 and changed graduation and testing requirements.

In the trial’s second round, lawyers for school districts argued that the funding boost was short-term and that other changes like implementing complex high school curriculum requirements had imposed additional expenses on schools. On Thursday, Dietz agreed.

The updated ruling generated swift reaction from policymakers and stakeholders across the political spectrum. In a preview of what may be an upcoming battle in the 2015 legislative session, several Democrats urged the state to fix the system without waiting for further action from the courts.

“Today’s court ruling is yet another opportunity to do better, especially with the 84^th Legislature right around the corner,” said state Sen. Jose Rodriguez, D-El Paso. “The state’s attorneys should end their battle against the Texas Constitution — and our students, parents and teachers — and allow us to move forward on a legislative solution to this issue, which is of such vital importance for the future of Texas.”

Republicans, on the other hand, questioned whether adding more funding to the public education system would solve anything.

“While I fundamentally disagree with Judge Dietz’s reasoning and have confidence that Attorney General [Greg] Abbott will prevail on appeal, it is clear to me that the Legislature must act boldly and decisively in the next legislative session to address this complex and critically important issue once and for all,” said state Rep. Jason Villalba, R-Dallas. “Antiquated and ineffective constructs such as Robin Hood and quasi statewide property taxes must be eliminated if we are to craft a fair and reasonable finance system that works for all of our Texas public school students.”

Thursday’s ruling will also likely fuel continued sparring over the issue in the state’s gubernatorial contest between Abbott, a Republican, and Democrat Wendy Davis. As the Texas attorney general, Abbott is responsible for the state’s defense. Davis, a state senator from Fort Worth, filibustered the 2011 budget bill that enacted the $5.4 billion in cuts that led to the litigation that arose two summers ago.

Abbott attempted to remove Dietz from the case in June, when he filed a recusal motion that questioned Dietz’s impartiality based on a series of emails sent to school district lawyers. The visiting court judge appointed to decide the motion dismissed it a few weeks later, saying the evidence did not justify Dietz’s recusal. The emails were not made public.