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Texas Supreme Court Upholds Finance System

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The Texas Supreme Court last week ended the state's five-year legal ordeal with its school-finance system, ruling in a split decision that the system imposed by the legislature in 1993 passes every constitutional test.

The opinion, which had been expected last fall, upheld every aspect of a law that had been challenged by poor school districts, wealthy districts, the state, and even a small group of parents who argued that the mediocrity of Texas schools should be constitutional grounds to allow vouchers to send children to private schools.

"We conclude that Senate Bill 7 is constitutional in all respects," Justice John Cornyn wrote in the 5-to-4 decision. The ruling noted that the legislature has made great strides toward equalizing spending since the court in 1989 concluded unanimously that "glaring disparities" trapped poor school districts "in a cycle of poverty from which there is no opportunity to free themselves."

State officials reacted with what amounted to a huge sigh of relief.

"The legislature has struggled with school-finance equity far too long," said Lieut. Gov. Bob Bullock, the leader of the Texas Senate. "For years I have said that it is time to get education out of the courtroom and into the classroom where it belongs."

Gov. George W. Bush also heralded the decision. The ruling removes a pressure that overshadowed the education agenda of his predecessor, Ann W. Richards.

"This decision makes our efforts to increase local control of schools even more imperative so local districts can spend their money most effectively in the classroom," Mr. Bush said.

Living by the Law

Texas school districts must now learn to live with the 1993 school-finance law approved by lawmakers. Ironically, the funding program has increased the state's reliance on local property taxes--the focus of the supreme court's original criticism.

Under the law, the state's wealthiest districts must shed part of their local tax base so that they do not exceed a level of $280,000 per student. They can reach that level by one of five means: consolidating with another district, giving up territory, consolidating tax bases with a poorer district, contracting with a poorer district to educate its children, or giving the state excess property-tax receipts. (See Education Week, June 9, 1993.)

After imposing that limit on wealthy districts, the state assists poor districts by promising a guaranteed yield on local taxes--making up the difference between its promise and what the district can raise on its own.

The new system has made drastic changes at both ends of the Texas school-finance spectrum. At the time of the 1989 decision, the wealthiest district claimed $14 million in property wealth for each student--700 times more than the poorest ratio. Under the new law, the ratio has dropped to 28.

Al Kauffman, the lead lawyer for the Edgewood school district, which filed the finance suit more than 10 years ago, said Texas officials have made vast progress. But more work remains, he added.

Looking Ahead

The high court agreed that lawmakers cannot rest easy.

"Our judgment in this case should not be interpreted as a signal that the school-finance crisis in Texas has ended," Justice Cornyn wrote. "We conclude that the system becomes minimally acceptable only when viewed through the prism of history. Surely Texas can and must do better."

In a strong dissent, Justice Rose Spector argued that the court should have done better and that the justices retreated from the 1989 standards.

"This case is about a court that has come full circle," she wrote, contending that the decision "is based on the previously rejected premise that the state's constitutional responsibility is satisfied by providing most schoolchildren with the very least, and the favored few with the best money can buy."

The court threw out an effort by poor districts to find that the state had disregarded its obligation to increase its spending on school facilities. The court added, however, that it is prepared to reconsider that issue with more evidence.

Lawmakers expect to take up the facilities question in their biennial session, which began last month. Their deliberations may be more fruitful now that they are out from under the court's gun.

"We all look forward to working on the many other education issues facing Texas so we can have educational excellence throughout the system," said Pete Laney, the Speaker of the Texas House.

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