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Equity v. Adequacy Excerpts from District Judge F. Scott McCown’s Edgewood v. Kirby Opinion on School Finance ENATE BILL 1, an act relating to public education, passed by the Legislature on June 5, 1990, and signed into law by the Governor on June 7, 1990, effective September 1, 1990, does not “establish and make suitable provision for the support and maintenance of an efficient system of free public schools,” as required by Article VII, Section 1, of the Constitution of Texas, as interpreted by the Supreme Court of Texas in Edgewood I.S.D. v. Kirby. The Texas school system remains unconstitutional because it continues to deny school “districts … substantially equal access to similar revenues per pupil at similar levels of tax effort.” If the 72nd Legislature does not “establish and make suitable provision for the support and maintenance of an efficient system of free public schools” by September 1, 1991, then … the court will consider enjoining the expenditure of all state and local funds or ordering defendants to disburse available funds in the most efficient manner until such time as the Legislature does establish an efficient system. The question presented by the motions before the court is whether the Texas School financing system as modified by Senate Bill 1 is efficient. The test for determining whether the financing system is efficient is whether it gives each school district “substantially equal access to similar revenues per pupil at similar levels of tax effort .” In applying this test, the court presumed the financing system as modified by Senate Bill 1 to be constitutional until the plaintiffs established otherwise. In other words, the court placed a heavy burden of persuasion on the plaintiffs. In addition, the court attempted at each juncture to construe Senate Bill 1 so as to make the financing system constitutional. In the end, however, the court reluctantly came to the conclusion that the system remains unconstitutional. Senate Bill 1 The state argues that Senate Bill 1 should be given a chance to work. The state further argues that it is too soon to predict how much equity will be achieved by Senate Bill 1 because of variables that have as yet to hap pen, for example the adoption of local tax rates, the results of accountable cost studies, the appropriations of future legislatures…. A plea for time to show a plan will work is always decided by looking at the particular plan. A particular plan might appear to have merit, but need time to prove itself. Or a particular plan might be so vague as to be no plan at all, in which case time is not needed, a plan is needed. Or a particular plan might be readily identifiable as one that will probably fail. Senate Bill 1 falls into these latter two categories. Parts of Senate Bill 1 are so vague as to be no plan at all. Parts of Senate Bill 1 are destined to fail. The court finds no purpose in waiting to assess Senate Bill 1. From what is known today, even assuming the best, the court confidently finds that Senate Bill 1 will not provide equity. Waiting one to five years for the obvious to prove true only postpones desperately needed reform. Flaws Senate Bill 1 does nothing to eliminate the disparities in local wealth. These disparities remain s great as when the court first considered this problem in 1987. Instead, Senate Bill 1 is yet another attempt to ameliorate the disparities in local wealth through an equalization plan With a little more money in the tradition of House Bill 72 in 1984 and Senate Bill 1019 in 1989. Senate Bill 1 is not the dramatic structural reform that the Supreme Court foresaw would be required. Exclusion of Districts adequacy and equity in funding as the policy neutrality as the test of equity. This subdivision sets out the test of Edgewood: “substantially equal access to similar revenue per student at similar tax effort.” tional program revenue per pupil per cent of effective tax effort shall not be statistically significantly related to local taxable wealth per student for at least those districts in which 95 percent of students attend school; What is not obvious … is which districts have 95 percent of the students. The districts can be arrayed in many ways, for example, largest to smallest or smallest to largest or alphabetically. The plan of Senate Bill 1 is to array the districts from richest to poorest and exclude from the test the number of districts from the richest down that have 5 percent of the students. Thus, Senate Bill 1 begins by excluding 174,182 children in districts with total taxable value of about $90 billion, or 15 percent of the state’s total taxable property wealth. The Test of Statistical Significance The fine print gets even finer … Senate Bill 1 appears to adopt a test of statistical significance. The court says ‘appears” because in fact Senate Bill 1 does not adopt any test at all …the yield of state and local educational program revenue per pupil per cent of effective tax effort shall not be statistically significantly related to local taxable wealth per student for at least those districts in which 95 percent of the students attend school. … In plain terms, the section says that the difference between districts in state plus local revenue per pupil shall not be “statistically significantly” related to local taxable wealth. The state refers to this provision as the self-correcting or self-adjusting feature of Senate Bill 1. As the state describes Senate Bill 1, it works like central air conditioning. When the house gets so hot as to reach the point of statistical significance, the air conditioner automatically goes on to cool the house down. Their term “statistically significant” does sound like it means something precise, but in fact it does not. When a statistician is asked to determine whether two factors such as revenue and local taxable wealth are related, there are several different statistical tests he can employ to do so. … Dr. Robert Berne, an expert statistician in the area of public school finance, was called by the state to explain more sophisticated statistical tests. What was disturbing about Dr. Berne’s testimony was his candid admission that the term “statistically significant” has no meaning. How large is large? How small is small? These are questions that the science of statistics does not answer. They are also questions 4 SEPTEMBER 28, 1990