Texas’s Method of Funding Schools Is Ruled Unconstitutional Summary

  • Last updated on November 10, 2022

Large disparities in public school funding between rich and poor districts in Texas were ended by a Texas Supreme Court decision and subsequent legislative act.

Summary of Event

For many years following the development of its public school system, Texas financed its schools largely through local property taxes. These taxes were raised at the local level and spent on the local school system. Substantial amounts of state aid provided a minimum level of funding for every school district, but local districts were free to supplement these funds from local property taxes. Even though the level of state funding increased over the years, schools remained heavily dependent on money raised through local property taxes. Property taxes;school funding School districts could levy taxes and spend the tax money as they wished, limited only by broad parameters set by the state. Education;school funding Schools;funding Edgewood Independent School District v. Kirby (1989) [kw]Texas’s Method of Funding Schools Is Ruled Unconstitutional (Oct. 2, 1989) [kw]Funding Schools Is Ruled Unconstitutional, Texas’s Method of (Oct. 2, 1989) [kw]Schools Is Ruled Unconstitutional, Texas’s Method of Funding (Oct. 2, 1989) [kw]Unconstitutional, Texas’s Method of Funding Schools Is Ruled (Oct. 2, 1989) Education;school funding Schools;funding Edgewood Independent School District v. Kirby (1989) [g]North America;Oct. 2, 1989: Texas’s Method of Funding Schools Is Ruled Unconstitutional[07390] [g]United States;Oct. 2, 1989: Texas’s Method of Funding Schools Is Ruled Unconstitutional[07390] [c]Laws, acts, and legal history;Oct. 2, 1989: Texas’s Method of Funding Schools Is Ruled Unconstitutional[07390] [c]Education;Oct. 2, 1989: Texas’s Method of Funding Schools Is Ruled Unconstitutional[07390] Mauzy, Oscar McCown, F. Scott Clements, William Richards, Ann

The result of this system was that property-rich districts had a much greater ability to fund their school systems than did property-poor districts. In 1989, the one hundred wealthiest Texas school districts had twenty times the property wealth of the one hundred poorest districts. These wealthy districts could either have much lower taxes than the poor districts or could spend much more on their schools. Typically, they did both. It was not unusual for a property-rich district to have both lower taxes and ten times more discretionary money per pupil than a property-poor district. This resulted in considerable disparities in the education provided to children within the state. In some poorer districts, schools lacked such ordinary aspects of a good education as science teachers and labs, gymnasiums, and cafeterias. The problem was compounded by the fact that spending on education in Texas was among the lowest in the nation. Although there were great differences within the state, even the wealthiest districts tended to fall below the national average in terms of per-pupil expenditures.

Texas’s system of financing education was first challenged at the federal level in the early l970’s. In 1973, the case of San Antonio Independent School District v. Rodriguez San Antonio Independent School District v. Rodriguez (1973) reached the U.S. Supreme Court. Supreme Court, U.S.;school funding In that case, the Edgewood Independent School District, a property-poor district in San Antonio predominantly composed of African Americans and Mexican Americans, argued that the funding system violated the equal protection clause of the Fourteenth Amendment Fourteenth Amendment (U.S. Constitution) to the U.S. Constitution. The Court rejected this argument, finding that the system did guarantee to all children a minimum level of education through state-supplied aid. The Court held that even if education could be considered a right (which it doubted), the Court did not have the authority to guarantee people levels of education beyond the minimum. The Court also found it difficult, using its traditional “equal protection” analysis, to determine a class of people who were the object of discrimination in the case. It pointed out that poor people often did not live in poor districts, and poor districts often contained rich people.

The heart of the Court’s opinion, however, was a concern for local control of education. The Court praised the freedom that local school control facilitated for political participation, experimentation, innovation, and healthy competition. Centralized control of the money, the Court asserted, would inevitably mean centralized control of education and a consequent loss of local freedom.

Having lost on the national level, the Edgewood District turned in the 1980’s to the Texas state constitution for relief. Joining with other poor school districts, and represented by the Mexican American Legal Defense and Educational Fund Mexican American Legal Defense and Educational Fund (MALDEF), the district brought suit against the state of Texas in May, 1984. The suit alleged that the state’s school financing system discriminated against students in poor districts in violation of the Texas constitution. Partly as a response to this suit, the state legislature passed a school reform law in June, 1984, that substantially increased state aid to poorer districts. The suit was reconstituted and continued, however, on the grounds that large disparities still existed between rich and poor districts.

In January, 1987, a state district judge ruled that the financing system did indeed violate the Texas constitution. This decision was overturned by the Third Court of Appeals in Texas, but that decision was in turn appealed by MALDEF to the Texas Supreme Court. On October 2, 1989, in the case of Edgewood Independent School District v. Kirby, the three Republican and six Democratic judges on the Supreme Court of Texas reached unanimous agreement that the state’s system of financing schools was unconstitutional. The court ordered the legislature to design a new system in time for the 1990-1991 school year. Speaking through Chief Justice Oscar Mauzy, the court held that the Texas constitution required that there be “substantially equal opportunity to have access to educational funds.” There must be equal educational opportunity for children “regardless of where they live.” What had been lost on the federal level was now won on the state level.

A fierce political battle then ensued in the Texas statehouse. Governor William Clements, a Republican, insisted that the funding problem posed by the court should not be solved through an increase in state taxes. In addition, representatives from districts that stood to gain were pitted against those from districts that stood to lose. The legislature met in four special sessions during the spring of 1990 to hammer out a new system. After three of these sessions, the legislature agreed to a bill, only to have it vetoed by the governor because it raised taxes. After the governor’s veto, a court-appointed master threatened an alternative “Robin Hood plan” that would shift hundreds of millions of tax dollars from wealthy to poor school districts. Under this threat, the governor and the legislature reached a compromise that attempted to solve the problem by increasing state aid to education but left substantial discretion to local districts to raise additional funds.

MALDEF and the poor school districts, however, challenged this solution in court as not providing sufficient aid for the poor districts and failing to make expenditures in all districts equal. In September, 1990, State District Judge F. Scott McCown agreed, ruling that the new law was unconstitutional because it did not give all schools “substantially equal” access to funds for a similar tax effort. Rather than order a new plan, the judge gave the legislature another year to come up with a plan that met this criterion.

In the Texas gubernatorial election in November, 1990, Ann Richards, the Democratic candidate, recaptured the statehouse from the Republicans. Because the Democrats already possessed solid control of the legislature, party conflict became less of a factor when the legislature reconsidered school finance in the spring of 1991. This did not prevent another fierce political battle over who would bear the burden of the reform, however. The new governor took a relatively small part in the legislative negotiations that led to the passage of a variation of the “Robin Hood plan” in early April. The plan established minimum and maximum taxing levels, designed to force increased spending on schools over a four-year period. It guaranteed similar funds for similar taxing efforts by a combination of transferring property tax revenue from wealthy districts in a county to poor districts, increasing state aid for poorer districts and decreasing it for wealthier ones, and placing spending limits on the wealthiest districts.

The end result of court and legislative action was a substantial change in the Texas educational system. Many suburban and city districts faced a loss of revenue; many rural and poorer districts near cities gained substantial increases in funding. Spending per pupil was now roughly equal across the state.


The long-term effects of the court-ordered change in Texas education have taken some time to work out. The hoped-for improvement in the education in poorer districts has depended on the translation of the increased dollars available into better education for children through such changes as the hiring of better teachers and the improvement of facilities—results that have by no means been guaranteed. The plan also faced court challenges from wealthier districts, which alleged that it violated the Texas constitution by requiring shifts in property tax revenues from the districts in which they were raised to other districts.

The immediate impacts of the plan were felt most strongly by those school districts that faced decreased state aid or transfer of their property taxes to other districts. These included middle- and upper-class suburbs and large cities. The Dallas area provides an indication of the scope of these shifts: Five suburban school districts around Dallas were required to shift property tax revenue to other districts, and two additional districts, including the city of Dallas, lost substantial amounts of state aid. The districts that lost revenues responded by laying off teachers and constricting their curricula. Typical cuts included foreign-language instruction, honors classes, and other elements of the curriculum that enabled students to advance beyond the “basics.” It was clear that the “best” Texas schools would no longer be quite so outstanding.

Large cities faced particularly severe problems. The city of Dallas lost half its state aid because of its large property base. Ironically, the city’s schools were simultaneously faced with the possible loss of accreditation because of inadequacies in the system, given that within the Dallas system were some of the poorest and most difficult neighborhoods for schooling in the state. In its insistence on equality, the court did not consider that the growing complexity of cities’ problems would make it more expensive for them to provide the same quality of education delivered in rural districts.

The change also brought about a new level of bureaucracy in the state’s school system. To equalize tax revenues among local school districts, new countywide taxing districts were created to supplement the local districts. These required boards to decide how to levy and distribute taxes as well as staff to administer the boards’ decisions. Increases in administrative costs and regulation were the inevitable results.

The 1989 decision of the Texas Supreme Court thus led to mixed results. On one hand, there was a prospect of improved education for children in poor districts. On the other, the best schools were hurt, local initiative was diminished, hard-pressed cities were left with decreased funds, and an already large educational bureaucracy was expanded. There was a strong possibility that the education of some would be improved, but only at the cost of dragging others down, achieving universal mediocrity.

School financing remained a controversial subject in Texas. In November, 2005, the Texas Supreme Court declared unconstitutional the state’s $1.50 cap per $100 in property value on statewide property taxes collected by local districts. The same ruling observed ongoing disparities between rich and poor districts. The court did not view these disparities as unconstitutional at the time of the ruling, but it observed that they might soon become so and cautioned that the legislature needed to act promptly to prevent this. In a special legislative session in May, 2006, Texas lawmakers approved reforms to meet the court’s ruling and deadlines, allowing local discretion in setting tax rates. This led to a decrease in local property taxes, but other reforms dedicated state surpluses to cover local shortfalls in tax revenue, dedication of new taxes to buy down future local revenue shortfalls, and new minimal business taxes. These reforms allowed the state to extend teacher pay raises. The ability of these reforms to sustain quality education over the long term, however, remained an open question. Education;school funding Schools;funding Edgewood Independent School District v. Kirby (1989)

Further Reading
  • citation-type="booksimple"

    xlink:type="simple">Areen, Judith, and Leonard Ross. The Supreme Court Review 1973, 33-35. Offers an interesting analysis of the problems of wealth and equal protection, focusing on the national case involving Texas school finance.
  • citation-type="booksimple"

    xlink:type="simple">Coons, John E., William H. Clune, III, and Stephen D. Sugarman. Private Wealth and Public Education. Cambridge, Mass.: Harvard University Press, 1970. The seminal work advancing the view that school districts should receive a fixed amount of revenue per pupil for any particular level of tax effort regardless of the level of the property tax base.
  • citation-type="booksimple"

    xlink:type="simple">Pritchett, C. Herman. “The New Due Process: Equal Protection.” In Constitutional Civil Liberties. Englewood Cliffs, N.J.: Prentice Hall, 1984. Provides a good summary of the legal thinking about equality that lay behind the Texas Supreme Court decision about school financing, including a succinct discussion of the treatment of wealth by the U.S. Supreme Court.
  • citation-type="booksimple"

    xlink:type="simple">Richards, David A. J. “Equal Opportunity and School Financing.” University of Chicago Law Review 32 (1973): 41. Presents a thorough discussion of the legal and constitutional issues that can be raised about the financing of schools through the local property tax.

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