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Finance Reform Is Struck Down By Texas Judge

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A Texas judge last week threw the nation's second-largest state school system into a new round of fiscal and political turmoil by striking down a finance-reform measure approved by the legislature this year. The law, which was enacted in June after a prolonged and bitter debate, falls far short of the state supreme court's mandate to reduce spending disparities between the state's rich and poor districts, District Judge Scott McCown declared in a strongly worded opinion.

While allowing state schools to operate under the provisions of Senate Bill 1 during the current school year, Judge McCown said the plan "is not the dramatic structural reform that the Supreme Court foresaw would be required."

The judge said he would impose a remedy if the legislature fails to implement a finance system acceptable to the court by next September.

The ruling evoked expressions of dismay from legislators, who said they had produced the best plan that was politically achievable, and delight from representatives of low-wealth districts, who described the decision as unexpectedly forceful.

Commissioner of Education William N Kirby pledged to appeal the ruling to the state high court, which had set the current events in motion when it ruled last fall in Edgewood v. Kirby that the existing system of state aid was unconstitutional. (See Education Week, Oct. 11, 1989.)

The commissioner also called for a quick renewal of discussions over school-finance alternatives.

"Our state's leaders must display the bold leadership necessary to develop a system of school finance which will put us on a path to educational excellence or risk having the courts lead our children down the road of mediocrity for all," he said.

State education officials had pleaded for more time to gauge the effects of SB 1, which this year will increase aid to the state's 1,056 school districts by $528 million. But Judge McCown made clear he found no promise in the legislature's approach.

"Parts of Senate Bill 1 are so vague as to be no plan at all. Parts of Senate Bill 1 are destined to fail," he wrote in a 50-page opinion. "From what is known today, even assuming the best, the court confidently finds that Senate Bill 1 will not provide equity."

"Waiting five years for the obvious to prove true only postpones desperately needed reform," the judge said.

"Senate Bill 1 provides too little equity to justify much delay. The problems of our poor school districts remain as disturbing today as when this case began," he continued. "The court wants to say loudly and clearly that it can not and will not forbear drastic action after Sept. 1, 1991. "The ruling questions many of SB 1's fundamental provisions. The trigger for determining whether per-pupil spending in poor districts has fallen too far behind their wealthy counterparts, for example, remains unclear, the judge said.

Astroturf for All?

Limiting equalization to what the state terms "necessary" funding for "appropriate" programs and "adequate" facilities also fails to address the supreme court's intent, he added.

"The state asks: Why should equalization be provided for unnecessary costs? Why should the state provide Astroturf, swimming pools, and planetariums for all? Why is it not sufficient to equalize to an adequate level?" Judge McCown wrote. "These questions show that the state still does not understand the evil that the court insists must be remedied."

"The legislature continues to try and define adequate as something less than the elected school boards charged with the responsibility to educate our children say they need to do the job," he continued. "Of course, the legislature does not give a thought to prohibiting rich districts from spending money on what the legislature refers to as 'Astroturf.' In stead, it refuses to fund what it calls 'Astroturf' for the poor districts."

Further, Judge McCown said, the state did not show that it provides an adequate minimum education under its foundation program, which funds a basic program for all districts, and its guaranteed-yield program, which funds program enhancements.

Rich Still Rich

Finally, the judge said the bill's timetable for providing equalization and its modest increases over its five- year duration would not allow poor districts ever to match programs already in place in wealthy areas.

"Under Senate Bill 1, the rich districts are left rich, the poor districts poor," Judge McCown wrote. "The rich can still raise revenue through local property taxes and the poor cannot. The poor will receive state funds to equalize the difference, but only up to a level of bureaucratically and legislatively determined 'adequacy,' not to the level of the real difference in educational opportunity."

Spokesmen for the state's low-wealth school districts said they had expected the substance of the judge's ruling, particularly in light of what they said were early indications that the finance reforms are providing little help to poor schools. But they added that they were surprised by the intensity of Judge McCown's objections to the state's plan.

"The legislature did not pay attention to the real holdings in the Edgewood v. Kirby supreme court case, and they are now suffering the consequences," said Al Kauffman, the lead attorney for the school districts that challenged the law.

"We're obviously very pleased with what the judge has to say, which is precisely what we've been saying for years now," added Craig Foster, executive director of the Equity Center, a group representing poor districts across Texas. "If members of the legislature and executive branches are looking for guidance, I think this opinion is full of such advice."

New Governor the Key

Observers said that while lawmakers bear the burden of inventing an acceptable finance system, their approach to a new finance plan will depend largely on the results of the race to succeed Gov. William P. Clements Jr., whose disagreements with the legislature produced the marathon standoff over SB 1.

"As you think back on various versions of Senate Bill 1, clearly the resistance all along the way demonstrated by the Governor, as it turns out, was fatal to the success of the bill," said Brad Ritter, communications director for the Texas State Teachers Association. ''His entire focus was to decrease the amount of money, which, in turn, decreased the legislature's options. Clearly stronger leadership from the governor's office is required than we had from Governor Clements." Mr. Clements called last week's ruling an attempt by the court to usurp the power of the legislature."While fine-tuning may be in order, certainly SB 1 deserves to be given time to work," he said.

State Treasurer Ann W. Richards, the Democratic gubernatorial candidate, announced following the ruling that after the election she would convene education officials, lawmakers, teachers, and parents to be gin devising a new finance plan. "We have had a Governor who was part of the problem and not part of the solution," Ms. Richards said. The Republican candidate, Clay ton Williams, who is leading in the polls, would be willing to consider increased spending to comply with the court order, according to a spokesman. But he has ruled out raising taxes to do so.

Spending Caps, Consolidation

Lawmakers who had worked on SB 1 acknowledged Judge McCown's criticism, but at the same time said that the bill was the best they could muster under the circumstances.

"The legislature has labored long and hard on this issue," said Speaker of the House Gibson D. Lewis. "The bipartisan compromise agreed to by the legislature and the Governor was not easily obtained."

State Senator Carl D. Parker, chairman of the Senate education committee, said the decision makes touchy issues that were avoided in drafting SB 1, such as consolidations and local spending limits, very real considerations now."

Mr. Ritter of TSTA said, however, that spending caps for wealthy districts and consolidations to expand districts' tax bases should be seen as a last resort.

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