Supreme Court upholds school finance system

I’m stunned.

The Texas Supreme Court on Friday issued a ruling upholding the state’s public school funding system as constitutional, while asserting it could be better.

“Our Byzantine school funding ‘system’ is undeniably imperfect, with immense room for improvement. But it satisfies minimum constitutional requirements,” Justice Don Willett wrote in the court’s 100-page opinion, which asserted that the court’s “lenient standard of review in this policy-laden area counsels modesty.”

“The judicial role is not to second-guess whether our system is optimal, but whether it is constitutional,” the ruling said.

It is the first time the state has won a school finance case. Justices Eva Guzman and Jeff Boyd delivered concurring opinions.

I haven’t had the time to review this, and it may take me a couple of days to do so. The immediate reaction I have is that the Supremes are saying it sucks, but not badly enough for them to do something about it this time. One wonders where the bar is, not that it does any good right now. I’ve posted an analysis that was forwarded to me in email beneath the fold. In the meantime, there are two things I know: One is that the Legislature is not going to spend any time on school finance this session, and two is that nothing will change until we elect different leaders. I don’t know what else to say. A statement from Mayor (and former State Rep.) Sylvester Turner is here, and the Rivard Report, the Observer, and the Austin Chronicle have more.

14-0776
Michael Williams, Commissioner of Education, et al.
v. Calhoun County Independent School District, et al.
on direct appeal from Travis County
• For State of Texas: Scott A. Keller, Rance Craft and Beth Klusmann, Austin
• For Texas Taxpayer & Student Fairness Coalition: Richard E. Gray III, Austin
• For Calhoun County I.S.D., et al.: Mark Trachtenberg, Houston
• For Edgewood I.S.D., et al.: Marisa Bono, San Antonio
• For Fort Bend I.S.D., et al.: Wallace B. Jefferson, Austin
• For Texas Charter Schools Association: James C. Ho and Denise Pierce, Dallas
• For the “efficiency” intervenors: Craig T. Enoch, Austin
AFFIRMED IN PART, REVERSED IN PART, JUDGMENT RENDERED IN PART AND REMANDED, Justice Willett opinion:
Among the principal issues:
¶ Whether the district court correctly denied the state’s request to dismiss the constitutional claims on grounds that they are not capable of judicial resolution, the plaintiffs do not have standing to bring them and the claims are not ripe. The state argues in essence that financing schools is a policy consideration reserved to the Legislature and, even if the claims are justiciable, the school-district plaintiffs by seeking to enjoin the state from operating an unconstitutional public-school system do not have standing and the claims are not ripe because the Legislature has constructed a more-demanding system that is only in its beginning stages and cannot be evaluated yet.
¶ Whether the school-finance system is inadequate as a whole under the state constitution’s Article VII, section 1 adequacy requirement and particularly whether it provides adequately for educating so-called English language learners – ELL students – and economically disadvantaged students. The state responds that the trial court’s inadequacy ruling is based on financial “inputs” and not student performance – outputs – the standard it argues the Court has used in previous school-finance cases to evaluate adequacy.
¶ Whether the state’s school system is constitutionally unsuitable under Article VII, section 1’s suitability requirement. In response the state argues that suitability, the means to achieve a constitutionally adequate school system, is satisfied if the system is adequate. But the school-district plaintiffs contend an adequate school system can be unsuitable if the state fails to finance it sufficiently to meet the state’s educational goals – they insist funding is not sufficient – and by the state’s alleged failure to calculate the costs of providing an adequate education.
¶ Whether the school system fails the constitutional requirement that it be financially efficient. The state maintains that the gap between what so-called property-poor districts can raise by taxes and what property-wealthy districts raise has narrowed from when the Court held in the last school-finance decision that the school system was efficient.
¶ Whether the trial court erred by rejecting charter schools’ particular claims that their state financing is inadequate, unsuitable and inefficient and that the state’s provision for charters is unequal, relative to public schools’.
¶ Whether the trial court erred by denying intervenors’ claims that the school system is“qualitatively” inefficient – that is, they argue among other factors, that mandated class sizes, limits on available charter schools and state teacher certifications breed waste, limit competition and further inefficiency.
¶ Whether the state’s school-finance scheme imposes an unconstitutional statewide property tax. The standard for a statewide ad valorem tax, as the Court determined in the last school-finance decision, is whether essentially the state imposes a tax “cap” that leaves school districts with no meaningful discretion in raising and spending money.
The Supreme Court HOLDS the district court erred in its overall analysis to find the Texas school-finance system unconstitutional on the basis of inadequate, unsuitable and inefficient financing.
¶ Ripeness. The Court notes it previously has not addressed the sort of ripeness argument the state presents in this case – that school financing has changed over time, particularly evidence in the first trial phase relating to the Legislature’s financing in 2013 that partially restored money cut earlier. But the Court rejects it. Evidence presented to the trial court might have been mooted by subsequent events, but the trial court reopened the evidence and made new findings. The state argues that the legislative changes considered when the evidence was reopened were so new that relevant data on their effectiveness was unavailable. Trial court findings based on the new evidence may not be as persuasive as the earlier ones, but the changed circumstances do not render the entire trial court proceeding unripe. The state’s advocacy for a strict application of the ripeness doctrine would mean school-finance cases could never be entertained, because the facts relating to funding, test scores, tax rates, property values and other factors are always changing.
¶ Adequacy. In the three school-finance cases, the Court notes, it made clear the presumption that the Legislature achieves a general diffusion of knowledge – the constitutional standard – by devising a curriculum and an accountability regime to meet legislatively designed accreditation standards for schools and districts. That presumption is rebuttable, and subject to judicial review, but review of the adequacy requirement is under an arbitrariness standard always “very deferential” to legislative policy choices. In this case the district court’s analysis of adequacy is flawed and its ultimate determination of constitutional inadequacy wrong. That error bleeds over into other issues and infects much of the trial court’s analysis of them.
• Relying on three principal experts presented by the challenging school districts, the trial court measured inadequate funding on a per-student basis. The Court rejects the trial court’s analysis: (1) as the second West Orange-Cove decision held, an adequacy determination should not depend on “inputs” such as funding per student, and instead should depend on measuring student achievement and (2) the trial court’s findings as to the specific amount of money needed to achieve a general diffusion of knowledge are beyond the current state of science in this field. To determine as that specific funding levels are required to achieve the constitutional threshold of a general diffusion of knowledge, a court not only must find that a cost-quality relationship exists, but also must assign specific quantitative measures to that relationship. Even the general, qualitative question of the existence of a cost-quality relationship remains a highly contested issue in the social sciences.
• In reaching its conclusions that funding was constitutionally inadequate, the trial court expressly relied on “the amount of spending the courts have found necessary to achieve the general diffusion of knowledge in the past,” citing a footnote in the Edgewood IV decision. The problem with this analysis, the Court concludes, is that it never held in Edgewood IV that $3,500 per student was required to achieve a general diffusion of knowledge. That figure came in discussion of financial efficiency, a separate requirement that focuses on funding equality and not on the absolute funding level. The Court in Edgewood IV assumed the trial court was correct that the $3,500 level was the minimum required for a basic education, then held that financial-efficiency standards were met. The Court accepted the $3,500 figure to identify the ceiling up to which the Constitution required substantially equal access to “efficient” funding, but in this case the trial court used the figure as a floor to create a constitutional minimal funding amount and establish a violation of the adequacy requirement.
• By focusing so heavily on the input of spending, attempting to decide a fundamental question that remains unresolved in the social sciences, relying on a misinterpretation of the Court’s jurisprudence, and relying on what the court deemed “best practices,” the trial court erred in assigning a minimum dollar figure as constitutionally necessary to achieve a general diffusion of knowledge. The error infected the entire adequacy analysis and renders the trial court’s ultimate conclusion that the school system is constitutionally inadequate hopelessly flawed.
• Even if inputs were sanctioned generally, many of the trial court’s findings do not appreciate that the constitutional standard demands not the best education, but only an educational system that is adequate to provide a general diffusion of knowledge. The Court notes that it has never held that constitutional adequacy requires the state to employ what are, in the view of one expert or another, “best practices” recognized by a segment of the expert community. Funding questions aside, the trial court strayed by repeatedly relying on best practices regarding pre-kindergarten programs, school size, dual-language classes, class size, providing for special needs of students learning English and economically disadvantaged students and by holding that a failure to implement such practices is arbitrary and unconstitutional. The Legislature is not constitutionally required, under an inputs approach to adequacy the Court has rejected, to assure that districts statewide impose specific inputs in the form of myriad best practices.
• Plaintiffs argue that the educational system is inadequate because the state has failed to calculate the money necessary to meet its performance standards or to obtain a general diffusion of knowledge. They rely on Education Code section 42.007, that the Legislative Budget Board “shall” adopt rules calculating qualified funding elements to achieve the state’s educational goals. But the Legislature’s failure to assure this legislative mandate does not establish a constitutional violation of the adequacy requirement. Given the highly controversial issue that more spending will necessarily raise student achievement, a debate that has raged for decades in the social sciences, the state has not acted in an unconstitutionally arbitrary manner simply because it has not attempted to assign precise dollar values to costs of providing a general diffusion of knowledge. Attempting to assign such dollar values arguably is itself arbitrary, given the uncertainty that prevails in educational research.Complaining that the state has not calculated its own figures for meeting legal mandates for public education does not render the system constitutionally inadequate because the plaintiffs bear the burden of proving the system does not achieve a general diffusion of knowledge.
• The performance of student subpopulations, especially a large group such as economically disadvantaged students who comprise more than 60 percent of Texas public-school students, is relevant to whether the system as a whole is constitutionally adequate. But the Court has never squarely held that a separate, cognizable adequacy claim can be asserted by a student subpopulation such as economically disadvantaged or students who are learning English as a second language. The Court does not “foreclose completely” a ruling of constitutional inadequacy as to subgroups, but concludes that the showing necessary for such a ruling would have to be “truly exceptional”: (1) the Constitution itself and precedents suggest that the adequacy analysis typically is confined to asking whether the system as a whole is providing a general diffusion of knowledge and (2) for practical reasons entertaining such claims for subpopulations could be made for countless other groups – students in certain grades or of certain ages, students of certain races, boys versus girls, students with certain mental or physical disabilities and others. The trial court concluded that the school system’s failure to close achievement gaps of economically disadvantaged and English-as-second-language students established a constitutionally inadequate system as to these groups. Plaintiffs presented much data on achievement gaps of students learning English and economically disadvantaged students, but did not prove that those gaps could be eliminated or significantly reduced by allocating a greater share of funding to these groups.
• Considering whether the system, as the Legislature has designed it, is adequate to meet the constitutional requirement to provide a general diffusion of knowledge, the Legislature need only act “reasonably” in making these policy decisions. In Edgewood IV and later in the first West Orange-Covedecision, the Court noted the Legislature’s accountability regime, as designed, may not always be sufficient to meet the constitutional requirement to provide a general diffusion of knowledge. But in this case the Court concludes that the legislatively designed system does not provide and require so little that the Legislature has arbitrarily abandoned its duty to provide a general diffusion of knowledge. The trial court rejected the adequacy presumption that follows compliance with the accountability regime, reasoning that accountability standards are set not to measure whether districts are achieving a general diffusion of knowledge, but rather to ensure that most districts and campuses fall on the “academically acceptable” or “met standards” side of the line.” Nothing unusual exists by calibrating a grading system to allow most participants to pass. Further, in the second West Orange-Cove case the trial court had made an essentially identical finding that the requirements for an “academically acceptable” rating are set to assure not a general diffusion of knowledge but that almost every district will meet them. Yet the Court found the system adequate. In condemning the system as constitutionally inadequate, the trial court considered results from early administrations of the newer end-of-course STAAR test, the State of Texas Assessments of Academic Readiness. Students, teachers and schools were undoubtedly challenged by new, harder tests they had not seen. But the Court concludes the system should not necessarily be “written off” because it is working to meet new standards but has not yet succeeded in doing so. The system is not unconstitutional because the state has decided to demand more of its schools and teachers and they predictably faced a transition to the more difficult tests. More recent STAAR results show improvements by certain measures.
• The Court notes it decision on the adequacy requirement is largely driven by the standard of review, “the legal lens through which we examine this issue.” In the second West Orange-Cove the Court said that “it remains to be seen whether the system’s predicted drift toward constitutional inadequacy will be avoided by legislative reaction to widespread calls for changes” and concludes that the current Texas school system leaves much to be desired. But the Court’s function is limited to reviewing the system’s constitutionality under an extremely deferential standard that places the burden of proving the system constitutionally inadequate on the party challenging it. The plaintiffs did not meet that burden.
¶ Suitability. The Court notes it has never held the school system constitutionally unsuitable. Such a defect appears to be reserved for some fundamental and insurmountable structural flaw, especially where the system is succeeding in efficiently providing an adequate education for Texas students. In the second West Orange-Cove case the Court held the system met the suitability requirement because its structure and operation were not so flawed as to make it “impossible” to efficiently provide a general diffusion of knowledge. A lack of a legal mechanism to ensure an adequate education would not apply because numerous statutory sanctions and interventions are available to remedy a district’s or school’s failure to meet legislatively mandated accreditation standards. The fundamental structure found suitable in the second West Orange-Cove case remains today. But the trial court held the school system was unsuitable because it was underfunded, essentially tying the suitability analysis to its flawed conclusion that the system is constitutionally inadequate because it is underfunded, a conclusion the Court rejects. The plaintiffs failed to prove that the school system is unsuitable.
¶ Financial efficiency. Since the Edgewood II decision in 1991 the Court has not found a violation of the financial-efficiency requirement. Since then the system has used recapture among other mechanisms to equalize funding. The Court compares past ratios showing disparate revenues and spending in districts with higher aggregate property wealth versus poorer districts with recent such ratios that indicate a system financially efficient for constitutional purposes. No single magic number or ratio determines financial efficiency, the Court concludes, but ratios in this case are in the range of those from prior cases where the Court found the system constitutionally efficient and well below ratios where the system was found constitutionally inefficient.
¶ Qualitative inefficiency. The intervenors argue the school system is qualitatively inefficient because it does not provide for a general diffusion of knowledge with little waste. They contend among other matters the system is structurally unsound, wasteful and unproductive of results. They complain of constant unproductive litigation and allege structural inefficiencies include school districts as near monopolies, a cap on the number of charter schools and a failure of the system to determine the cost of educating a child. The trial court did not err in rejecting the intervenors’ claims. If qualitative efficiency and adequacy can have different meanings, surely a great deal of overlap exists. A system that, as evaluated in this case, is adequate to achieve a general diffusion of knowledge may not be a model of efficiency. But as with adequacy, suitability and the “general diffusion of knowledge,” the Constitution grants the Legislature broad discretion in determining the acceptable level of qualitative efficiency, and the Court concludes it cannot interfere unless it acts arbitrarily and unreasonably in making that choice.
¶ Charter-schools claims. The charter-school plaintiffs complain that charter schools receive at least $1,000 less per student, based on how students are differentiated by formulae that assigns “weights” per student, than other schools largely because they receive no funding for facilities. They also complain that they are not subject to certain adjustments in the state’s foundation formula available to other schools and therefore do not receive extra money they deserve. The trial court held that because the school-district plaintiffs established that school funding was constitutionally inadequate and because charter school funding is based on state averages of school-district funding, the charter-school plaintiffs prevailed on their claim that funding for open-enrollment charter schools was constitutionally inadequate. Because funding formulae are unsuitable as to the school district plaintiffs, charter-school plaintiffs argue, those same formulae render the system constitutionally unsuitable as to charter schools. But, as the Court holds, evidence of inadequate funding is not a basis for declaring the school system constitutionally inadequate or unsuitable. For the same reasons that systemwide adequacy and suitability claims fail for the school-district plaintiffs, these claims also fail with respect to the charter schools. As for funding adjustments, the state uses statewide averages rather than making individual determinations for each charter school, for certain statutory adjustments – those relating to education cost, district size, district population sparsity and enrichment funding. The charter schools are asking for more fine tuning – school by school – than districts receive. But the administrative challenges of such fine tuning are not subject to a constitutional mandate under our “very deferential” review of claims under the Constitution. According to education commissioner, creating a charter school is akin to creating a “whole new school district” that increases the agency’s workload. Without a cap, an influx of a large number of charter schools could strain the Education Agency’s resources. And the state points out that important funding adjustments are made for charter schools, including adjustments for students learning English and educationally disadvantaged students. The charter-school plaintiffs have not shown a difference in treatment so arbitrary that it violates the Constitution.
¶ Unconstitutional statewide property tax. Compared with the Court’s holding in the secondWest Orange-Cove case the state had imposed a statewide property tax because districts had lost meaningful discretion over their tax rates, the comparable numbers in this case are different. The maximum rate for maintenance and operations is $1.17. About 24 percent of districts with only about 13 percent of students tax at the cap. About 69 percent of districts educating about 76 percent of students tax at or below $1.04 – 13 cents below the cap. These figures by themselves do not suggest that districts as a whole have lost meaningful discretion.
Opinion
Briefs

Justice Guzman CONCURRING, joined by Justice Lehrmann:
The Court holds Texas’s school-finance system passes the threshold of constitutionality.  But this is not an endorsement of the system; to the contrary, the Court calls for “transformational, top-to-bottom reforms.” But much more work must be done, particularly with respect to the population that represents the majority of the student base – economically disadvantaged students. Good enough now, however, does not mean that the system is good or that it will continue to be enough.  Shortfalls in both resources and performance persist in innumerable respects, and a perilously large number of students is in danger of falling further behind.

Justice Boyd CONCURRING, joined by Justices Lehrmann and Devine:
The Court’s decision in this case will no doubt be a great disappointment to many and perhaps a cause for celebration for others. In light of this Court’s extensive and binding precedent, what it should not be is a surprise to anyone. And what it definitely is not is an expression of personal opinions on how Texas should fund and operate its public school system.

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