Texas School Finance Trial Enters Phase Two

Back in the courtroom after a 2013 legislative session in which lawmakers added money back to the state public education budget, lawyers representing nearly two-thirds of Texas school districts argued on Tuesday that the funding boost was short term, and that other changes had increased costs for schools.

"Any and all funding changes are temporary at best. There is absolutely no requirement they be in existence beyond the year 2015," said Rick Gray, a lawyer for the Equity Center, which represents about 400 school districts, the bulk of them poor, in the sprawling litigation that involves five other parties. "It was an exceedingly small step in the right direction."

Implementing complex new high school curriculum requirements, he said, including hiring more school counselors and broadening vocational education options, had imposed additional expenses on districts.

The lawsuit arose nearly two years ago after lawmakers slashed a historic $5.4 billion from public schools amid a state budget crunch while simultaneously raising accountability and assessment standards. Austin District Court Judge John Dietz ruled in favor of the school districts last February. 

But shortly after Dietz issued his oral ruling, the Legislature put $3.4 billion back into public education during the 2013 legislative session. Lawmakers also approved significant changes to charter school policy, high school curriculum and graduation and testing requirements, all of which were covered in testimony during the three-month trial. After a June hearing on the matter, Dietz decided to reopen evidence in the case, which is expected to makes its way to the Texas Supreme Court. 

On Tuesday, school districts rejected any suggestion that legislative changes had weakened their argument.

"The state can’t dumb down its constitutional obligations and say that perhaps students aren’t held to same college-ready standards as they were previously," said attorney David Hinojosa, referring to the new high school graduation standards. 

But state lawyer Shelley Dahlberg said that all but a handful of districts met the state's accountability standards and that student performance remained constant even in the face of budget cuts.

The new laws passed in 2013, she said, only improved an already constitutional system. 

"School districts asked for and received more discretion and flexibility on every level," she said. 

The hearing also provided an opportunity for the two parties that lost under Dietz's initial ruling — the Texas Charter School Association and Texans for Real Efficiency and Equity in Education, a taxpayer advocacy group — to re-air their arguments.

During the last legislative session, TREEE attorney Chris Diamond said the state had returned to the same failed solution of adding money without evaluating the true costs of the system.

"We're on the sixth verse of the same song. It's the same thing repeating over and over again — 99 bottles of beer on the wall and we are on beer 93," he said.

Despite updates to charter policy, said Leonard Schwartz, a lawyer for the charter school association, the state has still not addressed the inequities in funding between charters and traditional districts. And though lawmakers increased the cap on the number of charter contracts the state can award, they still just "substituted one arbitrary number for another."

Dietz made few comments from the bench on Tuesday morning, but he did shut down an attempt by the state to exclude 2013 standardized testing results from consideration in the second phase of the trial. Dahlberg argued that it was outside the scope of the new hearing, which is supposed to focus on the effect of legislative changes that took place after students took those tests. Dietz sided with school district attorneys, who said the most recent test data was needed to understand the problems the new legislation was intended to solve.

Testimony began Tuesday afternoon in the trial, which is expected to last for four weeks.