The poorest school districts in Texas tax at a rate that is nearly 8 percent higher than the state’s wealthiest districts but receive 35 percent less in per student funding, potentially contributing to lower standardized tests scores and higher dropout rates, an expert testified Thursday during a much-watched school finance case.
More than 600 public school districts that educate around three-quarters of the state’s 5 million students have sued, claiming that the way Texas funds its schools is so inefficient, inequitable and unfair that it violates the state constitution’s guarantee of a “general diffusion of knowledge.”
Six separate legal challenges have been rolled into a single case being heard by state District Judge John Dietz in Austin.
Wayne Pierce, executive director of the Equity Center, whose mission is to boost state funding for poorer school districts, took the stand for more than six hours. He said the bottom 15 percent of poorer school districts collect an average of $5,581 per student per year in property taxes — compared to $7,535 per student for the top 15 percent of the wealthiest districts statewide.
That works out to a more than $65,000 per-classroom funding deficit each year, he said.
The funding gap persists, Pierce said, even though the top 15 percent of wealthiest districts only collect an average tax rate of $1.02 per $100 of property value, compared to an average of $1.10 collected by the bottom 15 percent of the poorest districts.
Schools in parts of Texas with high property values — or that generate revenue from oil and gas or other natural resource interests — are considered “property-wealthy” compared to districts where home values are low and where no significant source of additional tax revenue is available.
Texas school districts have gone to court repeatedly in recent decades, claiming the Texas Legislature has underfunded them. The latest lawsuits came after lawmakers in 2011 cut $5.4 billion in funding and grant programs from public schools when setting the two-year state budget.
Attorney General Greg Abbott’s office has acknowledged that the system is flawed but argues that it is not entirely broken, much less unconstitutional.
Pierce said scores on exams like the SAT and ACT were lower on average in property-poor districts than in those that got more funding. The state objected that Pierce was not a testing expert, but Dietz allowed his testimony to continue.
Students from property-wealthy districts also performed better on state tests measuring college-readiness and had lower dropout rates, Pierce said.
Texas’ so-called Robin Hood system requires districts in wealthy areas to turn over a portion of their tax revenue to be distributed to schools in less well-to-do areas. But Pierce said the funding playing field is no longer level and is getting worse every year.
He cited two homes whose property values were within $10 of each other, one in the San Antonio Independent School District area and one in Alamo Heights, a wealthy suburb. Both areas pay identical tax rates, but San Antonio gets about $5,400 annually per student compared to nearly $6,700 per student in Alamo Heights.
Similarly, in suburban Austin, Pierce said that two nearly identically valued homes, one in the Pflugerville Independent School District and one in nearby Eanes ISD saw Eanes students receiving about $1,330 per year more than students in Pflugerville, despite paying the same tax rate.
State law allows school districts to raise their property tax rates up to $1.04 without voter approval and hold elections for permission to raise it to a maximum $1.17. Pierce showed a table indicating what would happen if all school districts statewide taxed at $1.17. It showed that in order to reach the funding levels of their property-wealthy counterparts, poor school districts would have to impose tax rates of $1.95, which would be illegal.
The case is expected to go until January, and then Dietz will rule on the lawsuits. But whatever he decides is likely to be appealed to the state Supreme Court. If its justices side with the plaintiffs, the Legislature will have to rewrite school funding rules.