Gov. Richards Signs School-Finance Compromise in Texas

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A Texas judge last week allowed the flow of state funds to public schools to resume after Gov. Ann W. Richards signed an 11th-hour school-finance compromise passed by the legislature.

The ruling by District Judge Scott McCown means classes will continue without disruption in the nation's second-largest state school system.

The seven-year battle over the state's funding system may not be over yet, however. Representatives of low-wealth school districts said last week that they had not decided whether they will again challenge the legislature's plan.

The Texas supreme court has twice overturned the state's $14-billion school-finance system, ruling that its reliance on local property taxes unfairly distributes school funds based on local wealth.

Still, the end of the debate for now allows lawmakers their first opportunity to face other state needs in the 1991 legislative session. And as a slate of school-improvement issues and the state budget wind their way through the legislature, advocates for the low-wealth districts said they will watch closely to see how those programs and appropriations might alter the funding-equity landscape.

"We now have a school-finance bill, but there are still a lot of education issues out there," said Al Kauffman, the lead lawyer for the districts. He said programs that impose new funding requirements on districts could undermine the equity strides made in the school-finance bill. "It's hard to say until you know what they are going to do."

The wait-and-see sentiment was also expressed by Judge McCown, who freed state funds that had been frozen since April 1, but at the same time said his acceptance of the legislature's plan was based only on the presumption that it met constitutional standards.

Last year, Judge McCown similarly accepted an earlier funding plan passed by the legislature, only to overturn it later.

At last week's hearing, Judge McCown put off ruling on any other issues related to further sanctions the legislature would have faced if it had failed to act, as it did in missing the original April 1 court deadline. The judge also would not make public a court-ordered funding plan that would have redistributed existing school funds on an equalized basis.

"When the other poker player folds, you don't show him your cards," the judge said in court.

Mr. Kauffman said that last week's hearing revealed little about how Judge McCown would react to another equity lawsuit.

"I don't think he really gave any strong hints" about the new plan's merits, Mr. Kauffman said.

School officials and lawmakers themselves spent much of last week analyzing how the school-funding plan will affect local tax rates and determining its cost at both the state and local levels. A preliminary estimate said it will require over $1.2 billion in new revenue over two years.

The plan will guarantee districts a certain amount of funding per student once they adopt a minimum tax rate of $0.72 per $100 of assessed value, which will rise to $1.00 after four years. Beyond the minimum tax rate, or "foundation" funding, districts will be allowed to keep locally generated funds. The state will provide guaranteed funds to poor school districts up to an additional $0.45 in tax levies.

Mr. Kauffman called the state's guaranteed funding "a great stride,'' but added that "above that, there's still inequity."

Other groups representing poor districts have already questioned the legislature's approach to funding school construction and said that the bill is not constitutional. Last week, however, analysts predicted that advocates will spend the next few weeks studying the school-finance bill with an eye toward how it is funded in next year's state budget.

"We have not made up our minds whether we're going to go back to the court, but this really is a life-and-death struggle for poor districts," Mr. Kauffman argued. "It's not something where if you make progress it's enough. Some people say, 'It is better. Why aren't you satisfied?' But the long-term issue is whether this is going to change the system."

Vol. 10, Issue 31

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