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Published in Print: May 20, 1998, as Frustrated With State, Texas Districts Back Reviving Finance Suit

Frustrated With State, Texas Districts Back Reviving Finance Suit

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A group of 126 poor, mostly rural Texas school districts that joined a 1984 lawsuit that forced the state to rewrite its school aid law now says it wants to reopen the litigation because the state is backpedaling.

The group's 30-page petition, filed May 7 in Travis County District Court, claims the state has failed to adequately redistribute tax wealth from rich to poor districts as called for in the 1993 finance-reform law.

That law was upheld in 1995 by the state supreme court, ending more than a decade of legal wrangling over how Texas pays for its schools. ("Texas Supreme Court Upholds Finance System," Feb. 8, 1995.)

One of the central provisions of the law was a limit of $280,000 on the amount of tax wealth, or tax base, available for each student in a school district. Anything over that limit would be redistributed to other, less wealthy districts.

The legislature, however, has since extended the three-year phase-in period for the cap to seven years, or through the 1999-2000 school year. As a result of that extended phase-in, the petition claims, up to $240 million in revenue will be lost from equalization efforts in that time.

"Over the last two legislative sessions, they haven't done much more than figure out how to help out rich districts," asserted Buck Wood, the Austin-based lawyer for the low-wealth districts.

The petition argues that the state is providing other loopholes for rich districts, and is granting too many tax exemptions to businesses. All told, the loss in school aid has been about $486 million since 1993, the petition alleges.

Efforts Ignored?

The petition has drawn sharp rebuttals from lawmakers, who say that it ignores new spending outside the school aid formula.

For example, Republican state Sen. Bill Ratliff pointed out that the state has provided $360 million for school facilities in the past two legislative sessions, most of which has gone to poor districts.

"Those people only want to look at the negative side of the ledgers and not give credit for programs that go to help poor districts," Mr. Ratliff, the chairman of the Senate finance committee, contended.

And he doubts whether the new action will pressure lawmakers to act when they convene for their biennial session in 1999. "It does not inspire me to help," he said of the petition. "I don't respond well to threats."

The legislator has support from an unexpected source. The superintendent of one district included on the petition said she opposes the new legal action and was unaware that it was being filed.

"Somebody filed a lawsuit on my behalf, and I didn't even know about it," said Ann Dixon, the superintendent of the 2,500-student Somerset district near San Antonio. "I'm not too happy about it."

Somerset is a low-wealth district with a local tax base of just $34,000 per student--nowhere near the $280,000 cap. The district, however, has received more than $4 million in state grants since 1993, most of which has gone toward building a new high school and early-childhood center.

"The legislature is giving me what it told me it would," Ms. Dixon said last week. "I'm worried that this [lawsuit] is going to send a bad message to the legislature."

Vol. 17, Issue 36, Page 22

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