An old familiar tune is being played.
Texas’ byzantine school finance system will face legal scrutiny for the first time in a decade after a rural school board voted to sue the state.
The Midland Independent School District board unanimously greenlit the lawsuit Tuesday night, arguing that the state’s restrictive funding rules unfairly strip the local board of its power to levy property taxes.
The suit, which will be filed in Travis County, sets up the first significant challenge to the system since 2016 and, if successful, could force the state Legislature to rework the system to allow districts to keep more of their local taxes. It comes as lawmakers have struggled in recent years to address voter anger over rising property taxes, with Gov. Greg Abbott going as far as calling for abolishing school taxes entirely for homeowners.
Josh Guinn, the Midland ISD board president who proposed the suit, said he did not know yet whether other districts would join. But the board must act to protect its power, he said.
“I think Midland has paid its fair share in property taxes to the state, and it’s time to challenge it,” Guinn said in an interview ahead of Tuesday’s meeting.
Asked by a fellow board member if the suit was connected to Abbott’s property tax push, Guinn said no.
As the story notes, we’ve gotten a school finance lawsuit roughly once a decade since the 1980s, which is what first led to wealthier school districts kicking over some of their property tax revenue to poorer ones, in the name of equity. There were only a few school districts paying into that system at first, but that number is much larger now and includes districts like HISD that don’t have a lot of cash to spare and smaller ones like Midland that have a lot of oil money.
The new lawsuit specifically targets a 2019 bill passed by the Legislature that shifted power to set property tax rates — and dictate how that money is spent — from school boards to the state’s education commissioner.
For Midland, the commissioner’s rate means it must levy $313 million in property taxes to pay for the district’s daily operations, with $83 million of that sent to the state. The district says it has paid nearly $1 billion to the state over the last decade.
Money collected through recapture is generally redistributed to school districts, but can also be used to generally balance the state budget, including funding for charter schools.
The result leaves local school boards “with control over only a small fraction of their own local property taxes,” read the school district’s proposed complaint, written by the board’s attorneys.
The suit argues the state’s funding scheme is so restrictive that it amounts to a state property tax, which is prohibited under the Texas Constitution. Past challenges have made similar arguments with mixed results before the Texas Supreme Court.
Guinn said a lot has changed since the court last rejected a challenge to the school funding method in 2016.
“Even with the monies we keep, we have less discretion on how it’s spent now, with mandates and other things,” he said.
I wish them luck, but I don’t have a lot of faith in the current Supreme Court or the current leadership. The lawsuit before the 2016 one was decided in favor of the districts, and what resulted was a mess of one-time payments and other jerry-rigged nonsense that never actually put more money in the districts’ coffers, while vast differences in the per-student appropriations from one district to another remained. The Republicans who have run this state for 25 years refuse to acknowledge that the cost of public education has gone up a lot for reasons beyond the schools’ and districts’ control – legislative mandates, insurance and security costs, a growing and often low-income population, inflation, etc etc etc – while they continue to cut property taxes (which disproportionately benefit corporate interests) and deprive schools of needed funding. I’m sure this lawsuit will highlight all of these problems, as the previous ones also did, but it’s going to take fundamental change in our government to fix any of it.
Who knew Midland was rural? An error made worse by Chronic parent Hearst also owning the MRT out there.