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A Blog from New America's Federal Education Budget Project

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Court Ruling Finds Texas Public Schools Funding Inequitable, Unconstitutional

Published:  February 12, 2013

Last week, a district court in Texas ruled in favor of more than 600 Texas school districts, finding that the state’s education finance system is unconstitutional. This is nothing new for Texas – all told, six school finance lawsuits have been tried against the state since 1984, the last in 2005. Each round of lawsuits has prompted the legislature to tinker with the funding formulas. That has added complexity and apparently exacerbated underlying inequities.

Using data and statistics from the New America Foundation’s Federal Education Budget Project (FEBP), we were able to reveal that the inequities across Texas school districts are in fact significant. Worse yet, the inequities have indeed increased over the past several years.

The latest litigation in Texas was brought on by $5.4 billion in cuts that the legislature made to public education in the 2012-13 biennium. The cuts break down into three figures: (1) $2.2 billion from shifting public funds for schools to the 2014-15 biennium; (2) $1.8 billion from assuming no student enrollment growth over the two years; and (3) $1.4 billion from the elimination of programs such as the state pre-kindergarten grant program, as well as reductions in many other public education programs.

While these cuts sparked the latest lawsuit, the districts involved in the suit have indicated that restoring these funds would not be enough to fix the broken system. The court ruled that the state not only provides insufficient funding for education, but that it is unfairly distributed to school districts. In other words, increasing funding through an inequitable formula does not, by definition, make education spending more equitable.

The FEBP data make that abundantly clear. In 2006, per-pupil spending in Texas varied on average 9.3 percent, or $693, from district to district. Three years later in 2009, per-pupil spending varied on average 9.7 percent, or $831, from district to district. And this growing disparity is even more evident at the local level.

Consider Penelope Independent School District. According to the National Center for Education Statistics, the Waco-area district is relatively property-poor – it gets only 14 percent of its per-student revenue from local taxes. And overall, it spent just over $9,300 per student in 2009 (slightly above the state average). Meanwhile, Glen Rose Independent School District outside of Dallas received more than 83 percent of its per-pupil revenue from local sources. That district spent more than $11,300 per student in 2009.

But those figures don’t necessarily align with the two districts’ needs. Whereas nearly 75 percent of Penelope ISD’s student body was eligible for free and reduced price lunches (a proxy for student poverty), only about 40 percent of Glen Rose ISD’s students were eligible. Penelope students struggled more in 2009 state achievement tests, too, with only half of fourth-grade students proficient in reading and math, while Glen Rose fourth graders were 88 and 95 percent proficient in reading and math, respectively.

Of course, research has shown that the payoff from spending more money on students is not always improved academic success. But wealthier districts tend to be at an advantage in hiring more experienced teachers and providing extra support services. Fair and equitable funding should be an essential element of state education policies.

The inequalities in Texas’s school finance formulas are mirrored in federal and state funding formulas around the country – and this week’s ruling is just the latest update to a long history of attempts to ensure equal access to quality education.

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