We’re Not Gonna Take It

Texas' starving school districts lawyer up for (another) epic battle for survival


Patrick Michels

A version of this story ran in the February 2012 issue.

All is not well in Texas schools. After billions in cuts and tens of thousands of teachers laid off, students now cram into overcrowded classrooms across the state. Field trips are canceled, and lunch is served for hours to accommodate the crowds. There is a pallor, a stagnancy crusting over the system like old coffee at the bottom of the teachers’ lounge pot.

In December, a survey by the American Federation of Teachers captured the mood. “Morale is lower than I have ever seen it,” said one of the 3,500 Texas teachers surveyed. “I dread coming to work,” said another. Eighty-five percent of Texas teachers reported district colleagues getting laid off. Fewer teachers mean bigger classes. Bigger classes mean more stressful days and longer nights grading assignments.

In Dripping Springs, teachers and even children sweep the floors because the district had to lay off its janitors—a Dickensian, almost Gingrichian vision made incarnate by the state’s meager funding. Some districts are selling ads on their school buses.

Even one of the state’s most efficient districts, Northwest Houston’s Cypress-Fairbanks Independent School District (ISD), is bleeding out slowly after eight years of cuts.

Cy-Fair, the state’s third-largest district, has become a model for doing more with less. It’s consistently a top performer not only in the state comptroller’s rankings of budget efficiency, but also in state test scores. The district hasn’t suffered the massive teacher layoffs some others have, and spokeswoman Kelli Durham says that’s because the district has grown so adept at finding other places to cut. Still, Cy-Fair has scaled back its custodial contracts, cut money for field trips, and skimped on new furniture, trimming $125 million (20 percent of the district’s current budget) in less than a decade. They’ve gotten more waivers than ever before to exceed the state’s 22-student cap in kindergarten-through-4th grade classrooms.

To keep running smoothly through the tight times, Durham says, district leaders cashed in on trust and goodwill they’ve built with their community over time, asking teachers and the whole Cy-Fair community to do more for their schools. But that solution, Durham says, is not sustainable. “In reality, people can’t do double-time for a long period of time.”

Most districts receive more than Cy-Fair’s annual $4,800 per student, but some get even less. The state’s current funding scheme harms them all in different ways. In wealthy districts, parents pay thousands in taxes every month, then watch the state give it to some other school. Their kids sell candy bars and magazines so their school can make ends meet. In poorer districts, students may have to pay to ride the bus to a school that’s more crowded than ever—the sort of environment that makes it easier than ever for students to drop out without being missed.

Last spring, parents and neighbors from school districts statewide converged on the Capitol in matching T-shirts to plead with the Legislature to fix the system once and for all.

The Legislature not only didn’t fix the system, it made it worse. Lawmakers trimmed $5.3 billion from public education—a record cut.

For the first time in 60 years, the state isn’t budgeting for growing enrollment. This year 80,000 new students have entered the system, but there’s no new money to pay for their schooling. The Legislature also eliminated funding for full-day pre-kindergarten and saddled districts with expensive new testing requirements. As the state’s public education budget winnows away, disparities between rich and poor districts grow deeper.

Beaten and cash-starved, schools have turned now to their last, best hope: the courts.

They have hired the handful of lawyers who know school finance best and who have beaten the state in court before. Rich and poor districts, often at odds over school funding in the past, have even formed a tenuous alliance.

To those who watch it closely and guide its evolution, Texas school finance has a certain elegance, a grand fractal spiral passing the same problems on to new generations. An early telling of the tale, in a 1999 issue of Yale Law and Policy Review, captured the scope of Texas’ education troubles in its headline, “The Edgewood Drama: An Epic Quest for Education Equity.”

The “drama” described in that piece is the 25-year string of lawsuits filed by San Antonio’s Edgewood ISD—a mostly Hispanic district bordered by more affluent Anglo ones on the city’s west side—arguing that Texas’ system of school funding violates the state constitution. Six years after that history was written, many of the same school districts again took the state to court over funding.

Like some sadistic Hollywood studio that just can’t let Rocky retire, many of the players in this ongoing drama are back for another sequel. Like many sequels, this one will feature familiar story lines and characters, but on a much grander and more expensive scale.

Now, just seven years after the Texas Supreme Court last ruled the system unconstitutional, more than half the school districts in the state have sued again. Together, the plaintiffs in the four separate suits account for more than 60 percent of the students in Texas public schools. Sequels usually promise to be bigger, better, and badder than before, and this case is no different. Get ready for the school finance fight of the century.

What’s Fair

San Antonio’s Edgewood is where it all began, with a march of students and parents to district headquarters in 1968 demanding school funding on par with neighboring Alamo Heights ISD, one of the richest in the state.

Inequality had left Edgewood with old bat-infested buildings, while Alamo Heights enjoyed shiny new ones. Edgewood students shared precious few typewriters; Alamo Heights kids got swimming pools.

Edgewood parent Demetrio Rodriguez sued the state in federal court, backed by the pioneering civil rights attorney Arthur Gochman, arguing that the funding system was unfair. Poor districts can raise property taxes, which largely fund schools in Texas, to the limit and still never generate as much money as property-rich districts like Alamo Heights, he argued. Rodriguez v. San Antonio ISD reached the U.S. Supreme Court, which threw the case out, saying school funding isn’t a federal issue. But while Rodriguez’s suit wasn’t successful, its arguments would become the basis for school equity suits in decades to come.

In 1984, the Mexican American Legal Defense and Educational Fund (MALDEF) used Rodriguez’s arguments to file the first Edgewood case in state court, beginning decades of wrangling between courts and the Legislature over how to forge a constitutional system. When that first Edgewood case was filed, the 100 poorest districts in Texas received an average of about $3,000 annually for each student, while the 100 richest got a little more than $7,000. (There is still inequity in the system. Even after a series of rulings and legislative fixes, that range runs from around $5,000 to $8,000 today.)

Those early equity claims faced a mighty challenge in court: Nowhere in the Texas Constitution does it say public education has to be fair. It must be “efficient,” though courts and lawmakers have spent decades working out just what that means.

Early on, the Texas Supreme Court decided that “efficiency” requires some degree of equality across district lines. But because so much of the school system is funded by local property taxes—in keeping with the tradition of local control—huge gaps were inevitable. “The Edgewood Drama” recounts that the court recognized early on how the cycle of inequality perpetuates itself: “Poorer districts had to tax at a much higher rate than wealthy districts, and still could not raise equal funding … Of course, these higher taxes frightened off tax-paying businesses, forcing poor districts to raise property taxes further.” As long as the state relies on property taxes to fund education, there will always be some inequality in the system.

Still, in the first Edgewood case (and in all but one of the suits that followed), the state court sided with the plaintiffs. It ruled that the Legislature needed to make the system more equitable.

Specific ideas about how to level the playing field were met with furious resistance. In response to a suggestion to redistribute money from rich districts to poor ones, then-Judge Scott McCown received reams of mail. “You have shit for brains,” one letter read, “you Mexican/Catholic loving socialist.” Another asked helpfully, “Have you considered this is the way Russia does it?”

That gift from Stalin, or something like it, has been on the books in Texas for decades now, known as the “Robin Hood” recapture plan. As designed, it helped level the field a great deal, and finally satisfy the state Supreme Court that Texas had a constitutional system. For a while, anyway.

This year, MALDEF is representing Edgewood and a handful of other poor districts. Another 380 of the state’s poorer school districts have joined forces under the banner of the Texas Taxpayer & Student Fairness Coalition. The coalition is represented by the Equity Center, a research group and advocate for poor districts. They’ve got experience in this fight dating back almost as far as MALDEF’s, and as the name suggests, they’re arguing once again that today’s system is unfair.

As recently as 2005, the Texas Supreme Court reiterated its definition of equity in school funding, reasoning that citizens who pay similar tax rates should see their schools receive similar funding.

Equity Center spokesperson Lauren Cook says that’s nothing like how schools operate today. “Generally speaking, now, the districts that get the most revenue for their kids pay the least in taxes …. Even a conservative court would at least need to look at how we’re treating our taxpayers.”

This focus on taxpayer equity is a new wrinkle in the case. Individual taxpayers have signed on to some of the new lawsuits to argue that, because of the complex property tax system created by the Legislature six years ago, the return on their tax money is less than in neighboring districts.

In 2005, the Texas Supreme Court ruled the school finance system unconstitutional. With so many districts maxing out their property tax rates, the court ruled that the system amounted to a statewide property tax—outlawed by the state constitution. State lawmakers were ordered to reduce property tax rates, which they did in 2006, but not before muddling the whole system even more.

Rather than update the old formulas used to determine how much money a district should get, the Legislature in 2006 invented a new benchmark— “target revenue”— based on each district’s property tax revenues in 2005. The strategy was meant to protect districts from losing money as the state lowered property taxes. But it created its own grave inequities in funding between districts. Target revenue not only doesn’t provide districts enough money, it makes inequalities worse over time.

In an absurd twist, the target revenue system actually punished the school districts that were most efficient with their money. This is why Cy-Fair ISD finds itself at such a severe disadvantage under the current system. It’s a large district that got by for years by pinching pennies. But now the district’s funding is tied to its 2005 levels of property tax revenue and per-student spending.

“If we had not been so efficient, we would’ve come up with a better target revenue [figure],” says Durham, the Cy-Fair spokesperson.

How Much Is Enough?

In the Edgewood drama, some of Texas’ richest districts sided with the state. They hoped to avoid handing over their property tax revenue to poorer districts. At one point, some rich districts even argued that money wasn’t the deciding factor in the quality of education.

They’re not likely to make that claim this time around. This time, wealthy districts will be siding with poorer districts to argue that the whole system is underfunded.

The two suits that followed the Edgewood battles—West Orange-Cove v. Neeley, parts I and II—started with wealthy districts going after the state for not providing enough. This is the so-called adequacy argument: that the state isn’t appropriating adequate funds for schools to provide an adequate education. The Supreme Court ultimately didn’t buy that argument.

In 2005, wealthy districts led a successful challenge against the state’s system, with a different argument: that local districts didn’t have control over their property tax rates. Those cases led to the system we have today, which, the schools will argue, is fatally underfunded.

“Many schools and districts are struggling to teach an increasingly demanding curriculum to a population with a growing number of disadvantaged students, yet without additional funding needed to meet these challenges,” the Supreme Court wrote in 2005. But while the system was constitutional then, they warned that it wouldn’t be for long. It would take “increased funding, improved efficiencies, or better methods of education,” to get back on track.

It’s always messy asking courts to rule that there isn’t enough money in the school system, because the constitution doesn’t define “enough.” Alamo Heights, Highland Park and other rich districts—60 of them so far—have taken up with the Dallas-based mega-firm Haynes & Boone to argue that the state has required them to do far more than it’s paid them to do.

“The cuts that the Legislature made to the public education system in the last session are pretty unprecedented,” says Mark Trachtenberg, one of the attorneys handling the case—and, incidentally, one of the authors of survey “Edgewood Drama.”

“We have more in common than we have things that divide us,” Trachtenberg says, referring to relatively richer and poorer districts. “There’s a strong belief among the attorneys and among the groups that we stand our best chance on prevailing on our claims if we stand and make those claims together.”

Fresh off a win working for property-rich schools in the last West Orange-Cove case, Houston lawyer David Thompson is headed back for more in this round’s fourth suit. He’s representing a group of large school districts, and he’s unimpressed with lawmakers’ latest attempt at reform.

Thompson says it’s time the state finds a way to pay for the sort of education it demands that school districts provide. After years of compromises and half-measures, he says, the system has become so convoluted as to bear no relationship with the real cost of education.

Every two years, it’s new mandates and less money, and Thompson says schools aren’t getting the money they need to make the grade on new standardized tests for grades 3 to 8, end-of-course exams and college prep in high school, and all the other new accountability measures lawmakers keep tacking on.

Thompson has rallied a coalition of 63 districts behind him, including the biggest in the state—Houston, Dallas, Austin, and Cy-Fair among them. More than one third of the students in the state, 1.6 million kids, are covered in his suit alone.

Thompson says he’s seized on the Texas Constitution’s requirement that the state provide for “a general diffusion of knowledge,” and will argue that’s not what the state provides today. “That phrase, that very Jeffersonian notion that an educated public and a healthy society go together, that is the only reason in 1876 we put a requirement for public education.”

The Plan of Attack

Together lawyers for the school districts will unleash a joint attack on the three pillars of the school finance system: equity, adequacy, and property taxes. They will argue that the system is unfair, too cheap, and that it forces districts to max out their local tax rate. Should any one of those arguments succeed in court, the constitutionality of the whole system topples, and the Legislature will have to rebuild it all again somehow.

“They all want the same thing, which is additional resources—more money,” says McCown, the former district judge who heard many of the Edgewood arguments in the 1990s and now directs the Austin-based think tank Center for Public Policy Priorities. “What’s different this time is that as difficult as the solutions have been in the past, they’re even more difficult now.”

McCown says the state’s likely to defend itself by pointing out “that education spending has grown over time, that they’ve got plenty of money, and if they just spent it as effectively as a few target districts they’re gonna pick out, they’re going to be fine. And that’s where the battle will be.”

In fact, many lawmakers point to the huge growth in education spending over the last decade, and wonder why, when schools are getting so much more money, their results haven’t dramatically improved. They reason that more money isn’t the answer, and argue that the “efficient” school system described in the Texas Constitution is one where money is spent wisely.

At a conference hosted by the Texas Public Policy Foundation in January, House Public Education Committee Chair Rob Eissler, R-The Woodlands, said he prefers to define the constitution’s “efficiency” requirement as a measure of “who gets the most out of each dollar spent.” That approach bypasses the equity argument, and would favor fixes like combining school districts or drastically cutting administrative costs.

But since the court’s decision in 2005, the state has instituted more requirements. New tests promise tougher accountability standards for kids in grades 3 through 8. Students face new end-of-course exams in high school. And schools are expected to demonstrate that they’ve prepared students to succeed in college. All this in the face of funding cuts. “There’s a reason districts need more resources, and it’s because they’ve been asked to do a lot more,” Trachtenberg says.

Instead of increasing resources, the Legislature pulled billions out of the system last year, and declined to account for growth. If the system was barely adequate in 2005, challengers argue, there’s no way it is in 2012.

None of this will happen fast, and the progress will not be easy to follow. It will take years: months of silence, then flurries of action before arbitrary deadlines. If the past is any guide, we could see vicious rejections, judicial betrayals, and frantic legislative fixes while a judge threatens to shut down the schools.

The district court may have a ruling in time for the Legislature’s 2013 session. But appeals could run another year beyond that, and lawmakers may not want to meddle with the system while the courts are grappling with it.

When the Legislature does finally take on the problem, districts that have combined in the early stages of this challenge may well splinter when the time comes to fight over policy specifics at the Capitol. Lawmakers will have a hard time evening out the system at the expense of the richest districts in the state, or digging up new sources of money in this already underfunded state, without invoking the Revenue Source That Shall Not Be Named (state income tax).

“As complex as school finance is, that’s only because of the politics that play behind the scenes,” says MALDEF attorney David Hinojosa. “Texas cannot even guarantee a certain minimal amount of funding per student, which is practically unheard of in school finance systems around the country.”

At one point in the Edgewood drama, Demetrio Rodriguez told the Los Angeles Times just how frustrated he’d grown with the politicians. “They are not going to address the issue unless they are forced to, unless they are pressured,” he said. “We could do it with armed revolution. But instead we’re doing it through the court system.”

At the time, he’d already spent 20 years fighting for equal funding. It’s been another 20 years since then, and this year Edgewood ISD is the first plaintiff named in MALDEF’s new suit.

History suggests we won’t get a wholesale reinvention of the school finance system, or any solution too deeply rooted in common sense. The Legislature’s terms of surrender in the past have all amounted to cobbled half-measures that look a lot better before you unpack them back home.

“The court has always said we need fundamental structural change,” Thompson says. “We never get it. You have these cathartic, very difficult cases. You get a decision … and then the system just deteriorates. And six or seven years later, you’re going to do it again.”


This story has been corrected to include attorney Arthur Gochman’s role representing Edgewood parents in the early Rodriguez v. San Antonio ISD case.