School Finance Litigation:

Post-Trial Court Decision Update

J. David Thompson
Philip D. Fraissinet

TPPF Conference
January 9, 2015

Thompson
Horton LLP
Janet L.&Horton
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Texas
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Thompson
& Horton
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om
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512-615-2351

Texas Constitutional Provisions

ARTICLE VII, SECTION 1
A general diffusion of knowledge being
essential to the preservation of the
liberties and rights of the people, it shall
be the duty of the Legislature of the State
to establish and make suitable provision
for the support and maintenance of an
efficient system of public free schools.
ARTICLE VIII, SECTION 1-e
No State ad valorem taxes shall be levied
upon any property within this State

The Ruling
State Property Tax
Districts do not have meaningful discretion over their tax rates
because they are being forced to tax at or near the cap in order to
achieve a general diffusion of knowledge
Adequacy
The system is not providing a general diffusion of knowledge
Suitability
The system is not structured, operated, and funded so as to
achieve a general diffusion of knowledge
Equity
Districts cannot raise the funds necessary to achieve a general
diffusion of knowledge at similar tax rates
3

Figure F-4. Increased Appropriations for Public Education for the 2014-2015 State Fiscal
Biennium (Amounts in Billions)

Element

FSP Formula Increase

Enrollment Growth
Other Programs (e.g. IMA, SSI,
Pre-K)
TRS FY 15 Revenue Offset
Total

Legislated
Increases

General
Revenue
Impact

Other Funds

$3.40
$2.20

ISDPropertyValue
$1.63 Growth
$3.77
PropertyTaxReliefFund
$0.20

$0.29
$0.33
$6.22

$0.09 PSFPayment
$0.33
$2.05

$0.20

$4.17

Source: MCA Analysis of SB 1 and HB 1025 Appropriations for the 2014-15 Biennium

Source:LynnMoak2014TrialPresentation,Ex.6618
4

Pre-K through 12 Public Education Revenue per Student

Federal

State

Local

Total

Source:LynnMoak2014TrialPresentation,Ex.6618
5

Percent of Students Passing Spring 2013 STAAR Tests by District Percentage of

Economically Disadvantaged Graduation
Students
Tests at Level II Phase-In I
Graduation Tests at Level II Final
Standard

Economic Disadvantaged
Under 30%

NON-ECON
ECON DIS % Met DIS % Met
Level 2 at Phase- Level 2 at
# Districts
in I
Phase-in I

Recommended Standard

ECON DIS % Met

Level 2 on ALL NON-ECON DIS %
ALL STUD % EOCs Taken, at
Met Level 2 at ALL STUD % Met
Met Level 2
Lvl II FINAL
FINAL
Level 2 FINAL
at Phase-in I
Recommend
Recommend
Recommend

77

49.6%

77.2%

71.7%

21.4%

49.0%

43.5%

30% to less than 50%

243

41.0%

66.9%

57.5%

15.1%

36.8%

29.0%

50% to less than 70%

449

35.9%

60.1%

47.2%

12.2%

30.4%

20.7%

70% to less than 90%

273

33.9%

54.1%

38.9%

11.8%

26.5%

15.4%

61

31.3%

47.7%

32.2%

11.7%

22.6%

12.4%

32.3%

52.9%

40.6%

26.8%

31.2%

28.6%

1,111

36.1%

65.0%

49.5%

12.9%

35.9%

23.5%

90% and Over

Unknown
Grand Total

Grade 3-8 Tests at Level II Phase-In I

Standard

Economic Disadvantaged
Under 30%

ECON DIS % Met

Level 2 at Phase# Districts
in I

NON-ECON
DIS % Met
Level 2 at
Phase-in I

Grade 3-8 Tests at Level II Final Recommended

Standard

ALL STUD %
Met Level II ECON DIS % Met NON-ECON DIS % ALL STUD % Met
Phase-In I
Lvl II FINAL
Met Lvl II FINAL
Level II Final
Standard
Recommend
Recommend
Recommend

93

56.6%

84.0%

77.9%

17.3%

46.8%

40.3%

30% to less than 50%

257

53.0%

78.2%

67.7%

14.7%

37.9%

28.3%

50% to less than 70%

467

48.0%

72.2%

57.3%

12.5%

32.6%

20.2%

70% to less than 90%

291

46.3%

67.2%

50.2%

12.1%

28.8%

15.2%

90% and Over

81

42.6%

59.7%

43.5%

10.8%

23.3%

11.5%

Unknown

12

29.7%

58.0%

48.0%

6.2%

25.3%

18.6%

1,201

47.9%

76.2%

59.3%

12.7%

37.2%

22.5%

Grand Total

Source: MCA analysis of the TEA confidential student-level data files via Litigation Discovery and TEA Analyze Categories

Source:MoakCaseyAnalysis,Ex.6620

Judge Dietz
on Suitability
Despite a statutory mandate, the State has made no

attempt to calculate the cost of adequacy or meeting

its own standards
Most of the district and student level formula
adjustments have not been updated since before the
fall of the Berlin Wall.
The school districts presented three credible estimates
of the cost of accomplishing a GDK.
The lowest of these - based off a number the
Supreme Court found to be adequate in Edgewood IV,
under an easier accountability system - shows that the
State needs to spend $800 more per student to fund a
GDK at $1.04 tax rates.
7

Judge Dietz
on Efficiency
The vast majority of school districts do not have

access to the level of funding that achieves a

general diffusion of knowledge at any tax rate.
888 districts cannot raise the adjusted Edgewood

IV adequacy estimate this school year at $1.17.

73 districts can raise the adjusted Edgewood IV
adequacy estimate at $1.
The actions of the 2011 and 2013 Legislatures

have combined to level down funding in direct

contravention to the Supreme Courts prohibition.