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Will Proposed Education Cuts Lead to Lawsuits?

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In Perry’s State of the State address, he asked lawmakers to create a “loser pays” bill, so that those who sue risk losing a whole lot of cash. It was a nod to the tort-reformers and business community, but Perry also may have been thinking of something more close to home. If the proposed budget cuts pass, the State of Texas will almost undoubtedly be seeing some significant lawsuits—perhaps most obviously when it comes to public school funding.

As I’ve written before, the cuts to public school are nothing short of drastic—the House draft budget cuts almost $10 billion while the Senate version cuts a hardly charitable $9.3 billion. And those cuts don’t just mean fewer computers and school buses. Even as new curriculum standards go into effect, the House draft doesn’t commit any money for instructional materials. One education analyst estimated that 100,000 teachers could be laid off. For parents and educators, the situation is nothing short of scary. And when things get scary, sometimes suing can be the best option. 

Texas has a history of making its education funding reforms through lawsuits and litigation. It takes people in black robes to get lawmakers worried. The past two major cases have focused on issues of equity—whether or not the distribution of funds was fair. But at Thursday’s House Appropriations meeting, state Rep. Mike Villarreal, D-San Antonio, floated concerns about lawsuits over general adequacy. Could parents sue simply because the state isn’t providing enough money for schools to provide a basic education? 

“If the state’s going to decrease its contribution by almost a quarter, what are the implications of a lawsuit that says we are not the primary funders of education?” he asked. “Does’t that have an implication on the constitutionality of our school finance system?” 

Not so surprisingly, no one had an answer for him. According to Villarreal, the proposed cuts would mean the state only paid for 45 percent of the total funding for public schools. And if school districts raised their own taxes to make up for the cuts, that would make the state’s share even lower. To make the sizable cuts to education that so many lawmakers deem necessary, the Legislature will have to pass new laws to get the state out of its current monetary obligations to schools. In other words, we can’t give schools as much as we’ve said they need, so now the lawmakers will have to change the rules. 

Easier said than done. The current school finance system, a messy network of arcane grandfather clauses and payments based on five-year-old snapshots of property values, came out of litigation over equity. After the courts ruled that the current system was unconstitutional, Texas lawmakers rewrote much of the taxcode. They lowered the amount that localities could tax property from $1.50 to $1. Since property taxes largely pay for schools, the lawmakers promised they could make up for the 33 percent cut with higher cigarette taxes and a reworked business franchise tax. The franchise tax didn’t perform, and according to the Comptroller’s office, the state now faces a $10 billion shortfall every biennium so long as the current tax structure remains in place. (Translation: structural deficit.) Villarreal says, the whole saga effectively meant fewer dollars for public education.

“Typically when the state gets sued for having an unconstitutional school finance system,” Villarreal said, “we end up investing more in education. 06 is quite unique. It appears that after this lawsuit, we actually invested less.” With the proposed cuts of almost $10 billion it looks like that’s a theme that may continue. 

Villarreal’s not the only one concerned that these cuts will lead to lawsuits. At the Senate Finance Committee hearing on the Texas Education Agency, Education  Commissioner Robert Scott told the senators he was almost certainly expecting lawsuits if the proposed funding levels went through. If the legislature couldn’t find $6 billion more to put into public schools, Scott said he was concerned schools wouldn’t be able to educate. “These are bare bones for what we need to continue to move on,” he said.

The Texas Supreme Court may want to start clearing its calendar.