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Seal of the Senate of the State of Texas
Welcome to the official website for the
Texas Senate
January 24, 2006
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PHOTO: Senate Select Committee on Education Reform and Public School Finance
The Senate Select Committee on Education Reform and Public School Finance meets to consider the recent ruling by the Texas Supreme Court that the State's public school finance system is unconstitutional.

The Legislature today once again began the process of finding a way to change how the state pays for public education, after failing to come up with a solution in two regular sessions and three special sessions. This time is different, however, because lawmakers face a June 1 deadline set by a recent Texas Supreme Court ruling. The Supreme Court decided in November that the current funding system for public schools, which relies chiefly on property taxes, is unconstitutional. The Court said that a state wide cap on property taxes, coupled with the number of mandates required of local districts by the state, does not give districts enough discretion. This makes the system a de-facto state property tax, which the Court prohibited. The Court gave the Legislature until June 1 to solve this problem, or risk closing down public schools in Texas.

Plano Senator Florence Shapiro, who chairs the Senate Select Committee on Education Reform and Public School Finance, will spearhead this effort. The committee held the first of several hearings today to try and craft a new system that does not constitute a state wide property tax. The committee will not stop at simply changing the system to meet the court's standards, said Shapiro, but will try to improve the state's education system, namely by focusing on teacher compensation, high school quality, and readiness for higher-level education. " I believe that one of the problems that plagued our efforts last time, was that we tried to be too broad and tried to do too much," she said. "My desire is to digest the consequences of what that brought us, and make sure this time that we try to intelligently build again, and working toward beginning again, and focusing on a few things and doing those few things well."

The committee heard testimony from Texas Solicitor General Ted Cruz on what the Supreme Court ruled and how the state can comply with the ruling. The reason that the court ruled the current system as unconstitutional, according to Cruz, is because local districts do not have sufficient discretion in deciding how high to set property taxes, and how to spend those funds. State law allows for school districts to raise property taxes up to $1.50 per $100 valuation, which, says Cruz, is not in and of itself a state-wide property tax. The constitutional challenge comes when considering the how much each district must spend to meet state mandated educational standards.

Plaintiffs in the Supreme Court case argued that because the state requires certain standards be met, such as decreasing drop-out rates, the districts must increase property taxes up to the property tax cap of $1.50 in order to comply. This is, for all intents and purposes, a state wide property tax. The Court agreed with this argument, and set the June 1 deadline for the state to come up with a solution.

Cruz offered several solutions to meeting the Court's requirements. The first, and simplest, is to pass a constitutional amendment allowing a state wide property tax. Second, would be to find a school finance method that did not rely heavily on property taxes. Both of these solutions would require fundamental changes in the way the state pays for schools. Cruz also suggested ways to work within the current system to give districts more discretion in setting tax rates, either by raising the current cap, or by supplying districts with additional funds to drive down the amount schools have to spend to meet state mandates.

Shapiro cautioned committee members that this time the Legislature faces real consequences if they cannot come to a consensus. "We are on a deadline. Anybody who doesn't think that is a serious deadline is seriously mistaken. We will have to shut down schools if we don't reach a decision by June 1, in my view. "

The committee will meet to hear more testimony from state and local education officials on Tuesday, February 6.

Session video and all other Senate webcast recordings can be accessed from the Senate website's Audio/Video Archive.