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Judge Dietz Rules Texas School Finance System is Unconstitutional

AISD among Plaintiffs Arguing State Does Not Fund Schools Adequately

Austin, Texas—Today, Judge John Dietz ruled the Texas school finance system is unconstitutional, finding it does not adequately fund public schools and that the system has evolved into a de facto statewide property tax.

The Austin Independent School District is one of 84 school districts that make up one of six parties in several lawsuits before Judge Dietz.  AISD is in the Fort Bend ISD group represented by Thompson & Horton.

In November, Superintendent Meria Carstarphen testified on behalf of the Fort Bend ISD plaintiffs’ group. During her testimony and answers to cross examination and questions from Judge Dietz, she covered issues including:

  • The district’s financial challenges to provide an adequate education amid declining resources and increasing state standards.
  • State budget cuts: The district lost $35 million in revenue due to state budget cuts in 2011-12, and an additional loss of $25 million in the 2012-13 school year.  Even If the district increases its tax rate to the maximum allowed ($1.17), the $60 million lost could not be recouped. With the 2017 repeal of Additional State Aid for Tax Relief—a 2006 deal that protects school districts from funding losses due to statewide property tax relief—there is the potential of the loss of another $100 million. 
  • The district’s ability to address the needs of students not passing the first administration of the state’s new end of course exams.
  • The district’s need for a sustainable revenue source because the use of AISD’s fund balance is reserved for one-time funding needs and cash flow purposes.

“Judge Dietz’s ruling affirms AISD’s position that our district needs adequate resources to serve our students well, while meeting the state’s increasing standards,” Superintendent Carstarphen said.  “We celebrate the success of our educators and students amid declining resources, but our schools need more resources if we are going to be able to help all of our students achieve their potential. All Texas students deserve a quality education that will help them prepare for—and compete in—today’s global economy.”

The state is likely to appeal the decision. Based on the timeframe and outcome of a Supreme Court appeal, some speculate the Texas legislature could take action between spring 2014 and the 2015 legislative session. At this time, it is uncertain how potential court and legislative action would impact district funding levels during the next couple of years.