Mike Morath, Commissioner of Education, in His Official Capacity Glenn Hegar, Texas Comptroller of Public Accounts, in His Official Capacity The Texas State Board of Education And the Texas Education Agency v. the Texas Taxpayer and Student Fairness Coalition Calhoun County Isd Edgewood Isd Fort Bend Isd Texas Charter School Association And Joyce Coleman

IN THE SUPREME COURT OF TEXAS

444444444444

NO . 14-0776

444444444444

MIKE MORATH, COMMISSIONER OF EDUCATION, IN HIS OFFICIAL CAPACITY;

GLENN HEGAR, TEXAS COMPTROLLER OF PUBLIC ACCOUNTS, IN HIS OFFICIAL

CAPACITY ; THE TEXAS STATE BOARD OF EDUCATION ; AND THE TEXAS

EDUCATION AGENCY, APPELLANTS,

v.

THE TEXAS TAXPAYER AND STUDENT FAIRNESS COALITION, ET AL.; CALHOUN

COUNTY ISD, ET AL.; EDGEWOOD ISD, ET AL.; FORT BEND ISD, ET AL.; TEXAS

CHARTER SCHOOL ASSOCIATION, ET AL.; AND JOYCE COLEMAN, ET AL.,

APPELLEES

4444444444444444444444444444444444444444444444444444

ON DIRECT APPEAL FROM THE 200TH JUDICIAL DISTRICT COURT

OF TRAVIS COUNTY , TEXAS

4444444444444444444444444444444444444444444444444444

Argued September 1, 2015

JUSTICE WILLETT delivered the opinion of the Court.

JUSTICE GUZMAN filed a concurring opinion, in which JUSTICE LEHRMANN joined.

JUSTICE BOYD filed a concurring opinion, in which JUSTICE LEHRMANN and JUSTICE DEVINE

joined.

For the seventh time since the late-1980s, we are called upon to assess the constitutionality

of the Texas school finance system, a recondite scheme for which the word “Byzantine” seems

generous.

In this round, more than half of the State’s 1,000-plus school districts have brought the most

far-reaching funding challenge in Texas history. We are presented with a court reporter’s record

exceeding 200,000 pages and a trial court judgment accompanied by 1,508 findings of fact and 118

conclusions of law. Dozens of briefs, many filed by new parties raising new claims, frame the

intricate arguments now before us. The depth and breadth of Texans’ attention is

understandable—and also commendable: Good education is good policy.

But our judicial responsibility is not to second-guess or micromanage Texas education policy

or to issue edicts from on high increasing financial inputs in hopes of increasing educational outputs.

There doubtless exist innovative reform measures to make Texas schools more accountable and

efficient, both quantitatively and qualitatively. Judicial review, however, does not licence second-

guessing the political branches’ policy choices, or substituting the wisdom of nine judges for that

of 181 lawmakers. Our role is much more limited, as is our holding: Despite the imperfections of

the current school funding regime, it meets minimum constitutional requirements.

Imperfection, however, does not mean imperfectible. Texas’s more than five million school

children deserve better than serial litigation over an increasingly Daedalean “system.” They deserve

transformational, top-to-bottom reforms that amount to more than Band-Aid on top of Band-Aid.

They deserve a revamped, nonsclerotic system fit for the 21st century.

2

I. Factual and Procedural Background

A. Overview of the Texas Public School System

1. The Public Education System

The Legislature has enacted numerous statutes articulating its goals for Texas schools.

Among those statutes, section 4.001(a) of the Education Code1 provides:

The mission of the public education system of this state is to ensure that all Texas

children have access to a quality education that enables them to achieve their

potential and fully participate now and in the future in the social, economic, and

educational opportunities of our state and nation. That mission is grounded on the

conviction that a general diffusion of knowledge is essential for the welfare of this

state and for the preservation of the liberties and rights of citizens. It is further

grounded on the conviction that a successful public education system is directly

related to a strong, dedicated, and supportive family and that parental involvement

in the school is essential for the maximum educational achievement of a child.

Subtitle F of the Education Code sets out provisions for curriculum, programs, and services. Section

28.001 of the subtitle2 states:

It is the intent of the legislature that the essential knowledge and skills developed by

the State Board of Education under this subchapter shall require all students to

demonstrate the knowledge and skills necessary to read, write, compute, problem

solve, think critically, apply technology, and communicate across all subject areas.

The essential knowledge and skills shall also prepare and enable all students to

continue to learn in postsecondary educational, training, or employment settings.

In Neely v. West Orange-Cove Consolidated Independent School District (WOC II), we noted

that the Texas school system has “four integrated components: a state curriculum, a standardized test

to measure how well the curriculum is being taught, accreditation standards to hold schools

1

T EX . E D U C . C OD E § 4.001(a).

2

Id. § 28.001.

3

accountable for their performance, and sanctions and remedial measures for students, schools, and

districts to ensure that accreditation standards are met.”3

As part of that system, the Education Code requires school districts and open-enrollment

charter schools to offer both a foundation curriculum and an enrichment curriculum. A foundation

curriculum consists of English language arts, mathematics, science, and social studies.4 An

enrichment curriculum consists of languages other than English to the extent possible, health,

physical education, fine arts, career and technology education, technology applications, religious

literature, and personal financial literacy.5 Alongside these requirements, Texas law establishes

bilingual education programs with the goal of “providing a full opportunity for all students to

become competent in speaking, reading, writing, and comprehending the English language.”6

Establishing the required curriculum is a significant undertaking. The State Board of

Education (SBOE)7 is required to “identify the essential knowledge and skills of each subject of the

required curriculum that all students should be able to demonstrate.”8 To that end, as we discussed

in WOC II, the SBOE adopted the Texas Essential Knowledge and Skills (TEKS) curriculum.9

3

176 S.W .3d 746, 764 (Tex. 2005).

4

T EX . E D U C . C O D E §§ 12.111(a)(1), 28.002(a)(1). Social studies consists of Texas, United States, and world

history, government, economics, and geography. Id. § 28.002(a)(1)(D).

5

Id. § 28.002(a)(2).

6

Id. § 29.051.

7

The SBOE consists of 15 elected members. Id. § 7.101.

8

Id. § 28.002(c).

9

176 S.W .3d at 765.

4

In 2006, the Legislature required the SBOE to incorporate college readiness standards into

the TEKS curriculum.10 The Legislature has defined college readiness as “the level of preparation

a student must attain in English language arts and mathematics courses to enroll and succeed,

without remediation, in an entry-level general education course for credit in that same content area

for a baccalaureate degree or associate degree program.”11 Adoption of these standards has been a

laborious process that continues today, involving “the direct input of educators, parents, business and

industry representatives, and employers,”12 followed by public hearings and comments.

As we explained in WOC II, “[t]o correspond to curriculum changes, the Legislature required

the development of a new state standardized test—the Texas Assessment of Knowledge and Skills

(‘TAKS’) test—to replace the Texas Assessment of Academic Skills (‘TAAS’) test.”13 The TAKS

test was harder than the TAAS test and covered more subjects.14 Since WOC II, the incorporation

of college-readiness standards into the TEKS curriculum led to a new test, the State of Texas

Assessments of Academic Readiness (STAAR) test.15 The STAAR testing program is directed at

postsecondary readiness. The record is clear that the STAAR test is significantly more difficult than

the TAKS test.

10

T EX . E D U C . C O D E § 28.008(d).

11

Id. § 39.024(a).

12

Id. § 28.002(c).

13

176 S.W .3d at 765.

14

Id.

15

See T EX . E D U C . C OD E § 39.023(c-4).

5

Beginning with the 2011–12 school year, the STAAR test was gradually introduced,

beginning with Grade 9. The 2014–15 school year was the first in which all high school students

took the test. High school students currently must pass five STAAR end-of-course exams in order

to graduate: Algebra I, Biology, English I, English II, and United States History.16

The Commissioner of Education (Commissioner)17 sets three performance levels for the

STAAR testing program: Level I (unsatisfactory), Level II (satisfactory), and Level III (advanced).

Level II was chosen as the college readiness standard. As we noted in WOC II, passing or “cut”

scores on the TAKS test were gradually increased “to give teachers and students time to adjust to

the more difficult test.”18 Similarly, Level II “phase-in” scores were set for STAAR testing.

Standards on the STAAR test are currently set to increase, over three stages, to the final Level II

standard in the 2021–22 school year.

In addition to the STAAR testing program, student performance is measured by National

Assessment of Educational Progress (NAEP) tests. These tests are administered every two years in

math and reading to students in Grades 4 and 8.

Under the system’s accountability regime, the Commissioner adopts rules for evaluating the

performance of school districts, campuses, and charter schools.19 Performance ratings are based in

part on the school’s or district’s performance on the STAAR tests, dropout rates, and graduation

16

See id. § 39.023(c).

17

The Commissioner of Education is appointed by the Governor and heads the Texas Education Agency (TEA).

Id. §§ 7.002, 7.051.

18

176 S.W .3d at 766.

19

T EX . E D U C . C O D E § 39.054(a).

6

rates.20 Ratings of “Met Standard” (or “Met Alternative Standard” for alternative education campuses

and districts) and “Improvement Required” are assigned. The TEA plans to raise performance

standards over time.

Each school district must maintain accreditation status. The Commissioner determines

accreditation based in part on student achievement indicators (such as testing performance, dropout

rates, and graduation rates) and performance under the system’s financial accountability rating

system.21 The consequences of a school district losing its accreditation status are substantial. The

non-accredited district may not receive state funding or hold itself out as operating a public school.22

The Commissioner may also pursue various interventions and sanctions against a district or charter

school that does not meet accreditation standards, including appointing a monitor, conservator, or

management team for the district, closing the district or school, or annexing it to another district.23

The Commissioner can also invoke interventions and sanctions against individual schools within a

district.24

2. The School Finance System

Since WOC II, the basic structure for funding the public schools has remained in place, with

a few notable changes. Local, state, and federal funds are provided. Local property taxes include an

20

Id. §§ 39.053(c), 39.054(b).

21

Id. § 39.052(b)(1).

22

Id. § 39.052(f).

23

Id. §§ 39.102, 39.104.

24

Id. § 39.103.

7

M&O tax, for maintenance and operations, and a facilities tax, referred to as I&S, for “interest and

sinking fund.” At the time WOC II was decided, the M&O tax rate was capped at $1.50 per $100 in

property value.25

The Foundation School Program (FSP), set out in chapter 42 of the Education Code, is the

primary source of funding. The FSP functions to guarantee that each district has “adequate resources

to provide each eligible student a basic instructional program and facilities suitable to the student’s

educational needs.”26 The FSP consists of two tiers.27 In 2006, the Legislature adopted a

“compressed” M&O tax rate that lowered district tax rates by one third.28 The State says the tax

compression was in response to WOC II’s holding that the system imposed an unconstitutional

statewide property tax. The Plaintiffs say the Legislature’s intent was to cut property taxes. Maybe

both are true. In any event, a district taxing at the maximum rate of $1.50 saw its rate lowered to

$1.00. The Legislature set a new cap of $1.17 for most districts.29 A district that wishes to tax at a

tax rate over the “rollback tax rate” of $1.04 must hold a tax rollback election (TRE), also known

as a tax ratification election, to approve the rate.30

From 2009 to 2013, for districts taxing at $1.00 or above, the State provided a Tier I basic

25

WOC II, 176 S.W .3d at 758.

26

T EX . E D U C . C O D E § 42.002(a)(1).

27

Id. § 42.002(b)(1).

28

See id. § 42.2516(a).

29

Id. § 45.003(d).

30

T EX . T AX C O DE § 26.08.

8

allotment of $4,765 per student.31 This figure was then adjusted by a cost of education index (CEI)

adjustment that accounts for “geographic variation” and “costs of education due to factors beyond

the control of the school district,” such as district size, teacher salary variations, and the number of

low-income students.32 The basic allotment is also adjusted by a “small and mid-sized district

adjustment” recognizing diseconomies of scale for smaller districts, and a “sparsity adjustment”

recognizing additional costs (such as additional transportation costs) associated with sparsely

populated districts.33 These adjustments result in the district’s adjusted basic allotment.34 The TEA

then multiplies the adjusted basic allotment by the district’s average daily attendance (ADA) to

determine the district’s “regular program allotment.”35 ADA is the average daily number of students

in attendance for the school year.

Tier I funding also includes “special allotments” for certain students, including economically

disadvantaged, bilingual, gifted and talented, and special education students, and students requiring

transportation.36 This additional funding is provided by multiplying an adjustment factor by the

number of students falling into these categories. In today’s case, the adjustment factors for

31

See T EX . E D U C . C OD E § 42.101.

32

Id. § 42.102. The trial court found that “[t]he CEI is based on five school district characteristics that were

measured in 1989–90 — district size, type, percentage of low income students, average beginning salary in surrounding

districts, and location in a county with a population of less than 40,000.” Trial court Finding of Fact (FOF) 597.

33

Id. §§ 42.103, 42.105.

34

Id. § 42.101(c).

35

Id.

36

Id. §§ 42.151–.160.

9

economically disadvantaged and bilingual students are especially important. The adjustment factor

for economically disadvantaged students is .2;37 the factor for bilingual students is .1.38 The total of

all special allotments plus the regular program allotment is the amount of Tier I funding.

A school district’s Tier I funding is provided by local property taxes and state funds. The

district provides funding equal to the product of its compressed tax rate and its property values for

the prior year.39 The State then pays the difference between the district’s portion and the total Tier

I allotment.40

The system also provides for Tier II funding, which allows districts to obtain additional

funding by adopting a tax rate between the compressed rate and $1.17.41 Tier II funding is based on

the number of students in “weighted average daily attendance” or WADA. A district’s WADA is the

sum of its students’ basic allotments plus some special allotments divided by the basic allotment.42

The weighting effect of WADA is to inflate the number of a district’s students in order to account

for the needs of students whose education may require more funding.

Tier II funding consists of “golden pennies” and “copper pennies.” Golden pennies are the

first six pennies above the district’s compressed rate, and are guaranteed to yield at least the same

37

Id. § 42.152. The statute refers to “educationally disadvantaged” students, but we conform to the parties’

reference to these students as economically disadvantaged.

38

Id. § 42.153.

39

Id. § 42.252.

40

FOF 42.

41

See T EX . E D U C . C OD E § 42.302(a).

42

Id. § 42.302.

10

as Austin ISD’s tax revenue per weighted student per cent of tax effort, which was $59.97 in 2010

and has since been increased to $61.86 for fiscal year 2015, $74.28 for fiscal year 2016, and $77.53

for fiscal year 2017.43 Copper pennies are pennies for the tax rate between the golden-penny range

and $1.17, and are guaranteed to yield $31.95 per weighted student.44

Recapture, the “Robin Hood” feature first analyzed in Edgewood Independent School District

v. Meno (Edgewood IV),45 remains in place, although it has become more complex. The options

available to wealthy districts are essentially the same as those described in Edgewood IV: Districts

with property wealth exceeding the statutory limit can consolidate with another district, detach

property, purchase average daily attendance credits (the recapture option), contract for the education

of nonresidents, or consolidate their tax base with another district.46 Recapture depends on the tax

rate.47 For M&O tax pennies up to a district’s compressed rate, the district is subject to recapture if

property wealth per weighted student exceeds certain levels, $476,500 in 2012–13 and $495,000 in

2013–14.48 There is no recapture for golden pennies, hence one reason for their name. For copper

43

See id. § 42.302(a-1)(1).

44

Id. § 42.302(a-1)(2).

45

917 S.W .2d 717 (Tex. 1995).

46

T EX . E D U C . C O D E § 41.003; Edgewood IV, 917 S.W .2d at 728.

47

See T EX . E D U C . C OD E § 41.002(a); FOFs 45–46.

48

FOF 46.

11

pennies, recapture applies to districts with property wealth per weighted student greater than

$319,500.49

An alternative to funding “on formula” is known as “target revenue.” Target revenue,

described as a “hold harmless” system, is intended to blunt the short-term effects of tax compression.

Target revenue is based on certain hold harmless rules and applies if the target revenue amount

exceeds the amount the district receives under the provisions described above.50 The State makes up

the difference with Additional State Aid for Tax Reduction (ASATR). ASATR is presently only

about 1% of total FSP funding, and is set to expire in 2017.

Facilities funding has remained largely unchanged since WOC II. With voter approval,

districts may issue bonds for facility construction and renovation, and levy an I&S tax to meet debt-

service requirements.51 Before a district may issue such bonds it must demonstrate to the Attorney

General that it can cover debt service with a tax rate not to exceed 50 cents per $100 valuation.52 The

FSP has two programs respecting facilities funding. First, the Instructional Facilities Allotment (IFA)

guarantees a yield of $35 per student per penny of tax effort.53 Eligible districts must apply for

funding, with low-wealth districts receiving priority, but the Legislature did not appropriate any

49

See T EX . E D U C . C OD E § 41.002(a)(3).

50

See FOF 50; see also T EX . E D U C . C O D E § 42.2516.

51

See T EX . E D U C . C OD E § 45.003.

52

Id. § 45.0031(a).

53

Id. §§ 46.001–.003.

12

funding for new IFA grants in 2011 or 2013.54 Second, the Existing Debt Allotment (EDA)

guarantees $35 per student for the first 29 cents of tax effort needed to make bond payments.55

In 2011, the State cut education funding. According to the State, these cuts were the result

of an economic downturn combined with a loss of temporary federal funding under the American

Recovery and Reinvestment Act of 2009. Some Plaintiffs suggest the cuts were not the result of an

economic downturn, pointing out that the State ran surpluses in 2010–11 and 2012–13 and that the

Legislature left its Rainy Day Fund untouched. The underlying reasons for the cuts are debatable,

but the amounts of the cuts are not. The Legislature cut FSP funding by $4 billion for the biennium.

The Legislature also cut funding for special programs and grants by $1.3 billion. However, the 83rd

Legislature restored some of this lost funding in 2013, adding $3.4 billion in FSP funding and

another $2.2 billion to adjust for enrollment growth. It brought back $290 million in funding for

special programs and grants. The FSP basic allotment was increased to $4,950 for the 2013–14

school year, and $5,040 for the 2014–15 year. The 84th Legislature has funded an additional

estimated $1.5 billion to the FSP and added $118 million in new funding for pre-kindergarten (pre-k)

programs.

B. The Pending Suit

In this case, various entities and individuals sued the State for constitutional violations

regarding the school system. School districts comprise the largest group of plaintiffs. The school

district Plaintiffs (the ISDs or ISD Plaintiffs) include the Texas Taxpayer and Student Fairness

54

FOF 227.

55

See T EX . E D U C . C OD E §§ 46.032–.034.

13

Coalition (TTSFC) Plaintiffs,56 the Calhoun County ISD (CCISD) Plaintiffs,57 the Edgewood ISD

Plaintiffs,58 and the Fort Bend ISD Plaintiffs.59 The ISD Plaintiffs alleged the current school finance

system violates the adequacy and suitability requirements of article VII, section 1 of the Texas

Constitution. They also alleged the system imposes a statewide ad valorem tax in violation of article

VIII, section 1-e of the Texas Constitution. With the exception of CCISD, the ISD Plaintiffs also

alleged that the system violates the financial efficiency requirement of article VII, section 1. CCISD,

a group of property-wealthy districts, sided with the State on this issue.60

56

The Texas Taxpayer and Student Fairness Coalition; Alief ISD; Canutillo ISD; Elgin ISD; Greenville ISD;

Hillsboro ISD; Hutto ISD; Lake W orth ISD; Little Elm ISD; Nacogdoches ISD; Paris ISD; Pflugerville ISD; Quinlan

ISD; Stamford ISD; San Antonio ISD; Taylor ISD; Van ISD; Randy Pittenger; Chip Langston; Norman Baker; Brad

King; and Shelby Davidson, individually and as next friend of her three children. TTSFC is composed of 443 school

districts. FOF 2.

57

Calhoun County ISD; Abernathy ISD; Aransas County ISD; Frisco ISD; Lewisville ISD; and Richardson ISD.

58

Edgewood ISD; Harlingen Consolidated ISD; La Feria ISD; McAllen ISD; San Benito Consolidated ISD;

Yolanda Canales, individually and on behalf of her children; Arturo Robles, individually and on behalf of his child;

Jessica Romero, individually and on behalf of her children; and Araceli Vasquez, individually and on behalf of her

children.

59

Fort Bend ISD; Abilene ISD; Albany ISD; Allen ISD; Amarillo ISD; Angleton ISD; Austin ISD; Balmorhea

ISD; Beaumont ISD; Bluff Dale ISD; Brazosport ISD; Carthage ISD; Channelview ISD; Clear Creek ISD; Cleveland

ISD; College Station ISD; Coppell ISD; Corsicana ISD; Crosby ISD; Cypress-Fairbanks ISD; Dallas ISD; Damon ISD;

Decatur ISD; Deer Park ISD; Denton ISD; Dumas ISD; Duncanville ISD; East Central ISD; Ector County ISD; Edna

ISD; Fort W orth ISD; Galena Park ISD; Goose Creek Consolidated ISD; Graford ISD; Hardin-Jefferson ISD; Hays

Consolidated ISD; Hempstead ISD; Highland ISD; Houston ISD; Huffman ISD; Humble ISD; Katy ISD; Keller ISD;

Kenedy ISD; Kerrville ISD; Kingsville ISD; Klein ISD; La Marque ISD; La Porte ISD; Lamar Consolidated ISD;

Leggett ISD; Liberty ISD; McKinney ISD; Midland ISD; New Caney ISD; North East ISD; Northside ISD; Pampa ISD;

Pasadena ISD; Pearland ISD; Perrin-W hitt Consolidated ISD; Pine Tree ISD; Pleasant Grove ISD; Rice Consolidated

ISD; Rockdale ISD; Round Rock ISD; Royal ISD; Santa Fe ISD; Schertz-Cibolo-Universal City ISD; Sharyland ISD;

Sheldon ISD; Splendora ISD; Spring Branch ISD; Stafford M unicipal School District; Sudan ISD; Sweeny ISD; Trent

ISD; Troup ISD; W aco ISD; W eatherford ISD; W est Orange-Cove Consolidated ISD; and W oodville ISD.

60

Hence, we refer to the ISD Plaintiffs other than CCISD as the Financial Efficiency Plaintiffs in our discussion

of the financial efficiency issue below.

14

Another group of plaintiffs, the Charter School Plaintiffs,61 consists of the Texas Charter

School Association and parents of charter school students. The Charter School Plaintiffs claimed the

financing system for charter schools violates the adequacy, suitability, and efficiency requirements

of article VII, section 1. Their case was consolidated with the related claims filed by the ISDs.

Finally, other parties intervened, alleging the system is unconstitutional under the “qualitative

efficiency” requirement of article VII, section 1.62 Although the Intervenors63 also alleged the system

imposes a statewide ad valorem tax in violation of article VIII, section 1-e, they were largely adverse

to the ISD Plaintiffs. To the Intervenors, the flaw in the system is not inadequate funding but

wasteful spending resulting from inefficient rules and policies.

The trial court conducted a bench trial beginning in October 2012 and ending in February

2013. It reopened the case and took additional evidence in January and February 2014 to consider

the impact of 2013 legislation passed by the 83rd Legislature. In August 2014, the court rendered

a final judgment declaring the school system constitutionally inadequate, unsuitable, and financially

inefficient under article VII, section 1, and unconstitutional as a statewide ad valorem tax prohibited

by article VIII, section 1-e. The court also declared the system did not meet constitutional adequacy

61

Texas Charter Schools Association; Mario Flores, individually and as parent and next friend of his child;

Christopher Baerga, individually and as parent and next friend of his child; Dana Allen, individually and as parent and

next friend of her child; Jason Christensen and Sarah Christensen, individually and as parents and next friends of their

children; and Brooks Flemister, individually and as parent and next friend of his child.

62

For convenience we sometimes refer to all of the Plaintiffs and Intervenors, or the subset of these parties who

raised a particular argument, simply as “Plaintiffs.”

63

Joyce Coleman, individually and as next friend of her children; Danessa Bolling, individually and as next

friend of her child; Lee Beall and Allena Beall, individually and as next friends of their children; Joel Smedshammer and

Andrea Smedshammer, individually and as next friends of their children; Darlene Menn, individually and as next friend

of her child; Texans for Real Efficiency and Equity in Education; and Texas Association of Business.

15

and suitability requirements for two subgroups of students: English language learner (ELL) and

economically disadvantaged students.64 The Education Code defines an ELL student as “a student

whose primary language is other than English and whose English language skills are such that the

student has difficulty performing ordinary classwork in English.”65 Consistent with section 42.152

of the Education Code, the trial court defined economically disadvantaged students as those eligible

for free or reduced-price lunches under the national school lunch program.66 The trial court found

that as of the 2012–13 school year, over 60% of Texas’ public school students were economically

disadvantaged students and 17% were ELL students.67

The trial court ruled in favor of the Charter School Plaintiffs in holding that funding for

charter schools was based on average funding of school districts and was therefore constitutionally

inadequate. But the court denied the Charter School Plaintiffs’ separate adequacy, suitability, and

efficiency claims that as applied to charter schools specifically the system violated article VII,

section 1’s requirements. The trial court denied the Intervenors’ claim that the system violated article

VII, section 1 on “qualitative efficiency” grounds.

The court signed extensive findings of fact (FOFs) and conclusions of law (COLs) running

364 pages.68 The trial court’s judgment and an executive summary set out in abbreviated form the

64

Judgment ¶¶ II(1), II(2), III(4).

65

T EX . E D U C . C O D E § 29.052(1). See also FOF 332.

66

FOF 13.

67

FOF 245.

68

The Findings of Fact and Conclusions of Law are found at 2014 W L 4254969.

16

court’s findings and conclusions. The court enjoined the State from “giving any force and effect to

the sections of the Education Code relating to the financing of public school education (Chapters 41

and 42 of the Education Code) and from distributing any money under the current Texas school

financing system until the constitutional violations are remedied.”69

The court also granted attorney fees to the ISD Plaintiffs. It denied fee requests filed by the

State, Charter School Plaintiffs, and Intervenors. And it retained “continuing jurisdiction” over the

case until the State has “fully and properly complied with its judgment and orders.”70

A direct appeal to this Court followed.71

II. Review of the Trial Court’s Decision

A. The Two Key Constitutional Provisions

The trial court held the school system unconstitutional under two provisions.

Article VII, section 1 states:

A general diffusion of knowledge being essential to the preservation of the liberties

and rights of the people, it shall be the duty of the Legislature of the State to establish

and make suitable provision for the support and maintenance of an efficient system

of public free schools.

Article VIII, section 1-e states:

No State ad valorem taxes shall be levied upon any property within this State.

69

Judgment ¶ IX(1); COL 95.

70

Id. ¶ XI.

71

See T EX . G O V ’T C O DE § 22.001(c).

17

B. Summary of Our Prior School Finance Decisions

Our analysis depends heavily on our prior school finance cases, which comprise a unique

body of Texas jurisprudence. Indeed, we have recognized that adherence to our prior decisions is

particularly appropriate in this area of the law.72

Here is a chart illustrating the inter-branch conversation, followed below by a summary of

the cases:

Court Decision Legislative Response

Edgewood I (1989) Senate Bill 1 (1990)

Edgewood II (1991) Senate Bill 351 (1991)

Edgewood III (1992) Proposition 1 (1993)—voted down

Senate Bill 7 (1993)

Edgewood IV (1995) System Found Constitutional

WOC I (2003) None

WOC II (2005) House Bill 1 (2006)

We begin with Edgewood I.73 There, the Court held the school finance system

unconstitutional under the “efficiency” element of article VII, section 1. The basis of this holding

was wide disparities in property wealth, tax rates, and spending per student, perhaps most memorably

72

See W. Orange-Cove Consol. Indep. Sch. Dist. v. Alanis, 107 S.W .3d 558, 585 (Tex. 2003) (“W e do not agree

with the dissent that the importance of stare decisis can be minimized in this area. For fourteen years the Legislature has

worked to bring the public school finance system into conformity with constitutional requirements as declared by this

Court. To announce now that we have simply changed our minds on matters that have been crucial to the development

of the public education system would not only threaten havoc to the system, but would, far more importantly, undermine

the rule of law to which the Court is firmly pledged.”).

73

Edgewood Ind. Sch. Dist. v. Kirby, 777 S.W .2d 391 (1989).

18

a 700 to 1 ratio between the property wealth per student in the richest and poorest school districts.74

The Court adopted a standard of “financial efficiency” under article VII, section 1 that has been

followed since:

Efficiency does not require a per capita distribution, but it also does not allow

concentration of resources in property-rich districts that are taxing low when

property-poor districts that are taxing high cannot generate sufficient revenues to

meet even minimum standards. There must be a direct and close correlation between

a district’s tax effort and the educational resources available to it; in other words,

districts must have substantially equal access to similar revenues per pupil at similar

levels of tax effort.75

At the time, the State provided funding under the Foundation School Program (FSP), which

continues to this day and distributes money to districts under a complex formula, partly in an effort

to equalize funding. But the system at the time did not have the recapture mechanism now in place

to further equalize funding.

In Edgewood II,76 the Court addressed the school finance system following the 1990

enactment of Senate Bill 1, the Legislature’s response to Edgewood I. SB 1 left intact the FSP, but

created two tiers that remain in place today. Tier 1 was designed to provide guaranteed funding for

basic education to all districts that taxed at or above a minimum level. Tier 2 funding guaranteed a

certain level of funding for each cent of local tax effort above the Tier 1 minimum level. However,

SB 1 excluded the wealthiest 5% of school districts. The Court held this exclusion rendered the

system unconstitutionally inefficient:

74

Id. at 392.

75

Id. at 398.

76

Edgewood Indep. Sch. Dist. v. Kirby, 804 S.W .2d 491 (Tex. 1991).

19

Most property owners must bear a heavier tax burden to provide a less expensive

education for students in their districts, while property owners in a few districts bear

a much lighter burden to provide more funds for their students. Thus, Senate Bill 1

fails to provide “a direct and close correlation between a district’s tax effort and the

educational resources available to it.” To be efficient, a funding system that is so

dependent on local ad valorem property taxes must draw revenue from all property

at a substantially similar rate.77

On rehearing, the Court clarified that school districts in an efficient system are permitted to “generate

and spend local taxes to enrich or supplement an efficient system.”78 In other words, once an efficient

system produces a general diffusion of knowledge, districts can choose to tax and spend additional

sums for enrichment or supplementation purposes.

In Edgewood III,79 the Court addressed the system following the 1991 enactment of Senate

Bill 351, a legislative attempt to cure the constitutional infirmities recognized in Edgewood II. SB

351 created 188 county education districts (CEDs), whose “sole function is to levy, collect, and

distribute property taxes as directed by the Legislature.”80 The Court held the CED system violated

article VIII, section 1-e by creating a statewide ad valorem tax. The CED system created such a tax

because “the very purpose of the CEDs is to levy a uniform tax statewide.”81 “If the State mandates

77

Id. at 496 (citation, footnote omitted).

78

Id. at 499.

79

Carrollton-Farmers Branch Indep. Sch. Dist. v. Edgewood Indep. Sch. Dist., 826 S.W .2d 489 (Tex. 1992).

80

Id. at 498.

81

Id. at 500.

20

that a tax be levied, sets the rate, and prescribes the distribution of the proceeds, the tax is a state tax,

regardless of the instrumentality which the State may choose to use.”82 Edgewood III held:

An ad valorem tax is a state tax when it is imposed directly by the State or when the

State so completely controls the levy, assessment and disbursement of revenue, either

directly or indirectly, that the authority employed is without meaningful discretion.83

In Edgewood IV,84 the Court addressed the constitutionality of Senate Bill 7, enacted in 1993

in response to Edgewood III. SB 7 retained the two-tier system. Tier 1’s purpose was to provide a

basic program meeting all legal standards, while Tier 2 provided additional funding for enrichment

and facilities under a guaranteed yield system. Subject to exceptions for debt repayment, SB 7

capped combined Tier 1 and Tier 2 tax rates at $1.50. A new feature was a cap on taxable property

above $280,000 per student. If a district’s property wealth exceeded that amount, the district could

consolidate with another district, detach property, consolidate its tax base, contract for education of

nonresidents, or purchase “average daily attendance credits.” The last option was the one used by

almost all districts whose property wealth exceeded the cap, requiring a payment to the State that was

redistributed to poorer districts, the original recapture or “Robin Hood” mechanism.85 The Court

rejected all constitutional challenges. It held the system met the financial efficiency requirement of

article VII, section 1. It noted the 700 to 1 ratio of wealth per student found in Edgewood I had been

82

Id.

83

Id. at 502.

84

Edgewood Indep. Sch. Dist. v. Meno, 917 S.W .2d 717 (Tex. 1995).

85

Id. at 727–28.

21

reduced to 28 to 1, with further reductions under Tier 2.86 Although it did not analyze “adequacy”

using that term, it concluded the system’s accountability regime met “the Legislature’s constitutional

obligation to provide for a general diffusion of knowledge.”87

In Edgewood IV, the Court also rejected the wealthy districts’ argument that SB 7

unconstitutionally imposed a statewide ad valorem tax. The Court held that although the statute set

maximum and minimum tax rates, and provided financial incentives for districts to tax at maximum

rates, enough discretion remained in the system to distinguish it from a statewide property tax. But

the Court warned:

Eventually, some districts may be forced to tax at a maximum allowable rate just to

provide a general diffusion of knowledge. If a cap on tax rates were to become in

effect a floor as well as a ceiling, the conclusion that the Legislature had set a

statewide ad valorem tax would appear to be unavoidable because the districts would

then have lost all meaningful discretion in setting the rate.88

In WOC I,89 the Court addressed arguments that the system had indeed come to impose a

statewide property tax. The trial court had dismissed a statewide property tax claim on the pleadings,

concluding that the claim was not viable unless “something approaching or exceeding half the

districts” in the State were required to tax at the $1.50 cap to provide an accredited education.90 We

adhered to the Edgewood III test for a statewide ad valorem tax: “An ad valorem tax is a state tax

86

Id. at 730.

87

Id.

88

Id. at 738.

89

W. Orange-Cove Consol. Indep. Sch. Dist. v. Alanis, 107 S.W .3d 558 (Tex. 2003).

90

Id. at 576.

22

when it is imposed directly by the State or when the State so completely controls the levy,

assessment and disbursement of revenue, either directly or indirectly, that the authority employed

is without meaningful discretion.”91 We held that because the Constitution prohibits such a tax on

“any property within the State,” it did not matter whether such a tax was imposed on all or most

districts, or even a single district. Thus, the plaintiffs had stated a claim if they alleged that they had

no meaningful discretion in setting tax rates because they were forced to tax at or near the $1.50 cap

to provide a general diffusion of knowledge.92

Finally, in the most recent school finance case, WOC II,93 the Court again addressed

challenges to the school finance system under SB 7. It rejected the State’s standing and justiciability

arguments.94 Synthesizing our prior caselaw, WOC II explained that article VII, section 1 sets out

three standards: efficiency, adequacy, and suitability.95 Efficiency consists of both a “qualitative”

component and a “quantitative” component, the latter also referred to as “financial efficiency.”96 The

Court held that the system met the adequacy requirement for providing a general diffusion of

knowledge, and that the system was also constitutionally efficient and suitable. But we

acknowledged substantial evidence “that the public education system has reached the point where

91

Id. at 578 (quoting Edgewood III, 826 S.W .2d at 502).

92

Id. at 578–83.

93

Neely v. W. Orange-Cove Consol. Indep. Sch. Dist., 176 S.W .3d 746 (Tex. 2005).

94

Id. at 772–83.

95

Id. at 752–53.

96

Id. at 753.

23

continued improvement will not be possible without significant change,” and 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.”97 And the Court again held the system imposed

a statewide property tax in violation of article VII, section 1-e.98 As in prior cases, the Court focused

on whether districts had meaningful discretion in setting rates and whether the legislatively imposed

$1.50 cap had become “a floor as well as a ceiling.”99

In sum, the Court has twice held, in Edgewood I and Edgewood II, that the school finance

system was unconstitutional under article VII, section 1 because it was financially inefficient. It has

twice held, in Edgewood III and WOC II, that the system was unconstitutional under article VIII,

section 1–e because it imposed a statewide ad valorem tax. The Court has never held the system

constitutionally inadequate, unsuitable, or “qualitatively” inefficient under article VII, section 1.

C. Standards of Review

Philosophical views and emotions run deep on the subject of school funding in this State, as

indicated by the large number of parties and amici curiae and the content of their briefing. We

embrace this input because all Texans, judges included, desire an efficient school system that

cultivates and maximizes student achievement.100 But this Court must always be mindful of its

97

Id. at 790.

98

Id. at 794–98.

99

Id. at 795.

100

For example, high school students Zaakir Tameez and Amy Fan, with the help of other students, have filed

an excellent amicus brief, stating: “W e encourage the justices to remember their time as children, and reflect on what

role music, drama, art, and sports played in their lives as kids. . . . W e are willing to bet most justices of this Court

remember their good and bad teachers from high school to this day.” W e do remember.

24

limited constitutional role in this controversy. Our role is consequential yet confined, strictly

circumscribed by a deferential standard of review, as well as our own prior decisions in this unique

area of the law.

In this direct appeal, we have no jurisdiction “over any question of fact,”101 and must “rely

entirely on the district court’s findings.”102 But in deciding the constitutional issues, “those findings

have a limited role.”103 Whether the public school system is constitutional is ultimately a question

of law.104 And under our settled precedent, which frowns upon judicial second-guessing of policy

choices, we presume the system is constitutional.105

In WOC II, we recognized an arbitrariness standard for challenges under article VII, section

1.106 Under this “very deferential” standard,107 we must not substitute our policy preferences for the

Legislature’s, but “must on the other hand examine the Legislature’s choices carefully to determine

whether those choices meet the requirements of the Constitution.”108 “If the Legislature’s choices are

informed by guiding rules and principles properly related to public education—that is, if the choices

101

T EX . R. A PP . P. 57.2; see also T EX . G O V ’T C O DE § 22.001(c).

102

WOC II, 176 S.W .3d at 785.

103

Id.; see also Tex. Workers’ Comp. Comm’n v. Garcia, 893 S.W .2d 504, 520 (Tex. 1995) (holding that trial

court’s fact findings play a “limited role” in reviewing the constitutionality of a legislative enactment and whether “the

Legislature has acted arbitrarily”).

104

WOC II, 176 S.W .3d at 785.

105

Edgewood IV, 917 S.W .2d at 725; Edgewood III, 826 S.W .2d at 493.

106

176 S.W .3d at 784–85.

107

Id. at 790.

108

Id. at 785.

25

are not arbitrary—then the system does not violate the constitutional provision.”109 At bottom, the

“crux” of this standard is “reasonableness,” and the lens through which we view these challenges

maintains a default position of deference to the Legislature—that political branch responsible for

establishing a constitutionally compliant system.110

D. Justiciability, Standing, and Ripeness

The State argues we should not reach the merits of the Plaintiffs’ claims but should instead

dismiss the case for various jurisdictional reasons. We reject these arguments.

The State primarily invokes the political-question doctrine, arguing the claims under article

VII, section 1 involve policymaking reserved to the Legislature and are nonjusticiable political

questions. The State says there are no judicially manageable methods for assessing the

constitutionality of the state educational system, and there is no practicable basis for assessing the

“reasonableness” of such a complex system.

We rejected this argument in Edgewood I, and do so again today. We explained that the

Constitution imposes standards that are not committed unconditionally to the Legislature, but are

instead subject to judicial review.111 Although the “imprecise” language of Article VII, section 1

necessarily grants the Legislature great discretion to determine what constitutes “suitable provision”

for an “efficient system” to provide a “general diffusion of knowledge,” it is not inherently the

Legislature’s role to define and interpret the Constitution. To the contrary, as we have explained

109

Id.

110

Id. at 778.

111

777 S.W .2d at 394.

26

throughout our school finance cases, courts have the ultimate authority to determine whether the

Legislature’s interpretation of these terms is arbitrary or unreasonable and, therefore,

unconstitutional. In Edgewood I, for example, we explained that the terms used in article VII, section

1 “provide a standard by which this court must, when called upon to do so, measure the

constitutionality of the legislature’s actions.”112 Similarly, in WOC I, we affirmed that the “final

authority to determine adherence to the Constitution resides with the Judiciary,” and although “the

Legislature has the sole right to decide how to meet the standards set by the people in article VII,

section 1, . . . the Judiciary has the final authority to determine whether they have been met.”113 And

in WOC II, we made clear that “the Constitution nowhere suggests that the Legislature is to be the

final authority on whether it has discharged its constitutional obligation.”114 “If the framers had

intended the Legislature’s discretion to be absolute, they need not have mandated that the public

education system be efficient and suitable; they could instead have provided only that the Legislature

provide whatever public education it deemed appropriate.”115

The Legislature’s discretion, in other words, is “not without bounds.”116 Although the

determinations of what constitutes a “general diffusion of knowledge” and how to provide such an

education can be said to involve “political questions,” they are not nonjusticiable political questions.

112

Id.

113

107 S.W .3d at 563–64, quoted in WOC II, 176 S.W .3d at 777.

114

176 S.W .3d at 778.

115

Id.

116

Edgewood IV, 917 S.W .2d at 730 n.8.

27

On another front, the State argues that the Plaintiffs do not have standing to make claims

under article VII, section 1 because the courts cannot provide the relief sought, namely legislative

changes including changes in funding. The Court rejected a similar standing challenge in WOC II,

holding that “being required to implement unconstitutional statutes” is sufficient to give the ISDs

standing to assert constitutional violations.117 The ISDs also argue that the Intervenors lack standing.

The Intervenors include individual students who have standing because they are allegedly suffering

directly by enduring an education provided by an unconstitutional system.118

To be sure, the State focuses more precisely than before on the “redressability” component

of standing, but we remain persuaded that the Plaintiffs have standing. Generally, standing under

Texas law “requires a concrete injury to the plaintiff and a real controversy between the parties that

will be resolved by the court.”119 On the question of the court’s capacity to fashion relief, we have

recognized that a plaintiff lacks standing if the requested injunctive relief “could not possibly remedy

his situation.”120 In today’s case as in prior decisions, the trial court’s relief was to enjoin the

Legislature from funding the school system until the Legislature cured the constitutional infirmity.121

In fact, the court’s injunction used language identical to language used in the WOC II injunction that

117

WOC II, 176 S.W .3d at 774.

118

Id. at 776 (noting that individuals, including taxpayers, “were free to intervene” and that “individuals would

have standing to raise the claims in this case”).

119

Heckman v. Williamson Cnty., 369 S.W .3d 137, 154 (Tex. 2012).

120

Id. at 155.

121

See, e.g., WOC II, 176 S.W .3d at 753–54 (describing trial court injunction); Edgewood III, 826 S.W .2d at

523 n.42; Edgewood II, 804 S.W .2d at 493, 498–99 & nn.16–17 (describing trial court’s injunction in Edgewood I, as

modified by the Court in Edgewood II).

28

we affirmed.122 While the trial court could not write its own substitute legislation,123 we cannot say

that for standing purposes the relief granted by the trial court could not possibly spur the Legislature

to act, as it has done in the past in response to court decisions. After all, the Legislature has acted

each time this Court has declared the school finance system unconstitutional.124 The Plaintiffs have

standing.

Finally, the State argues that the Plaintiffs’ claims, including the state property tax claims

under Article VIII, section 1-e, are not ripe because school financing has changed over time. In

particular, the State argues the evidence introduced in the first phase of the trial relating to the

funding cut was superseded by the 83rd Legislature’s decision to restore most of the funding in 2013.

We have not previously addressed a ripeness argument of the sort the State now presents, but we

reject it as well. Generally, the ripeness doctrine concerns whether there is sufficient development

of the facts and issues to ensure that the court’s judgment is not based on contingent or uncertain

events.125 Some of the evidence presented to the trial court might have been mooted by subsequent

events, including the restoration of some of the funding. But as the Plaintiffs correctly point out, the

122

WOC II, 176 S.W .3d at 771 (quoting trial court injunction enjoining the State from “giving any force and

effect to the sections of the Education Code relating to the financing of public school education (Chapters 41 and 42 of

the Education Code) and from distributing any money under the current Texas school financing system until the

constitutional violations are remedied”).

123

See Andrade v. NAACP of Austin, 345 S.W .3d 1, 16 (Tex. 2011) (stating that courts cannot direct what laws

the Legislature must enact to comply with a constitutional provision); Terrazas v. Ramirez, 829 S.W .2d 712, 720 (Tex.

1991) (“After a legislative plan has been invalidated, respect for the separation of powers explicitly recognized in article

II, section 1 of our Constitution requires that the Legislature be given a reasonable opportunity to enact a substitute

statute.”).

124

See, e.g., Edgewood IV, 917 S.W .2d at 726–27 (describing legislative responses to Edgewood I, Edgewood

II, and Edgewood III decisions).

125

Perry v. Del Rio, 66 S.W .3d 239, 250 (Tex. 2001).

29

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, etc., are always changing to some extent. This is not to say that changed

circumstances are not problematic for the Plaintiffs, for reasons discussed below. But the inevitable

changes in relevant factual circumstances do not place school finance cases completely beyond the

decision-making reach of the courts; again, holding otherwise would effectively overrule our

longstanding recognition that the courts play a legitimate, constitutionally authorized role in these

disputes.

E. Adequacy

Article VII, section 1 imposes a duty on the Legislature to achieve a “general diffusion of

knowledge.” This requirement has come to be known as the “adequacy” requirement. The school

system is constitutionally adequate if it achieves a general diffusion of knowledge.126 Deferring to

the Legislature’s role in providing a general diffusion of knowledge, we have looked to sections

4.001(a) and 28.001 of the Education Code (quoted above), through which the Legislature has

126

WOC II, 176 S.W .3d at 753.

30

declared that its obligation to provide a general diffusion of knowledge is satisfied if school districts

are reasonably able to provide their students with (1) access to a quality education that enables them

to achieve their potential and fully participate now and in the future in the social, economic, and

educational opportunities of Texas and the nation, and (2) a meaningful opportunity to acquire the

essential knowledge and skills, reflected in curriculum requirements, such that upon graduation they

are prepared to continue to learn in postsecondary educational, training, or employment settings.127

We did not adopt these as the Court’s standards for a constitutional education, or the final word on

constitutionally required standards. Rather, we recognized this to be “the Legislature’s understanding

of a general diffusion of knowledge.”128 As the policy-making branch of government, the Legislature

may retain, revise, or replace these provisions, to reflect its current view of what the required

curriculum, and thus a “general diffusion of knowledge,” should produce.

In our last three school finance cases, we have made clear that we presume the Legislature

achieves a general diffusion of knowledge by devising a curriculum and an accountability regime

to meet legislatively designed accreditation standards for schools and districts.129 Again, that

presumption is not irrebuttable, and is subject to judicial review, but our review of the adequacy

requirement under the arbitrariness standard is always “very deferential.”130

Perhaps in contrast to earlier lawsuits, the issue of adequacy looms especially large in today’s

127

Id. at 787.

128

Id. at 788.

129

Id. at 787; WOC I, 107 S.W .3d at 581; Edgewood IV, 917 S.W .2d at 730 & n.8.

130

WOC II, 176 S.W .3d at 790.

31

case. CCISD accurately describes the issue as “now at the heart of this case.” We conclude that the

district court’s analysis of this issue was flawed, and its ultimate determination of constitutional

inadequacy wrong. This error, unfortunately, bleeds over into other issues and infects much of the

trial court’s analysis of them, as detailed below.

1. The Trial Court’s Reliance on Spending Levels

The trial court determined the school system was constitutionally inadequate because it

agreed with three of the Plaintiffs’ experts that the system was underfunded. The court endorsed

Allan Odden’s opinion as providing a reasonable estimate of the cost of an adequate education.

Odden used an “evidence-based model” to calculate the cost of an adequate educational system. He

calculated the cost by considering “best practices” such as a core class size of 15 for kindergarten

through third grade and 25 for other grades, full-day kindergarten, instructional coaches to provide

professional development, tutors and summer school for struggling students, including one-on-one

tutors for some students, and other “key strategies.”131 Based on Odden’s calculations, combined

with the cost of providing transportation, food services, and security as calculated by another expert,

Lynn Moak, the trial court concluded that a reasonable estimate of the cost of an adequate education

for the entire school system in 2010–11 was $46,766,551,937, a figure $3.66 billion above the

amount spent that year and, after budget cuts, $6.16 billion annually above the amount budgeted for

the following two years.132 The court also found reasonable Moak’s opinion that about $1,000 of

additional funding per weighted student was necessary to correct outdated weights and adjustments

131

See FOFs 610–20.

132

FOFs 619–20.

32

and to allow schools to meet increased state standards.133

The court found additional support for Odden’s and Moak’s opinions in the testimony of

Bruce Baker, who took the $3,500 figure per weighted student that was supposedly required to

achieve a general diffusion of knowledge in Edgewood IV, and adjusted that figure for inflation. This

yielded a figure of $6,576. The court concluded that only a small percentage of districts could raise

this amount even taxing at the maximum rate of $1.17.134

Relying on these experts, the trial court measured the level of inadequate funding on a per

student basis. It found that the total spending needed for 2010–11, measured in FSP M&O dollars

per student in WADA, was $6,176 per Odden’s estimates, $6,562 per Moak’s estimate, and $6,576

per Baker’s estimate, all well in excess of the actual funds available, estimated at $5,662.135 The

court also updated these figures for later years, finding for example that the inflation-adjusted Odden

estimate grew to $6,404 for 2013–14, and $6,532 for 2014–15.136 The trial court held the system was

unconstitutional because spending was below the “adequacy estimates” of these experts.137 It found

that these estimates “provide a credible range that definitively establishes that the State has failed

to make suitable provision of funds for an adequate education.”138

133

FOF 621.

134

FOF 622.

135

FOF 631.

136

FOF 632.

137

See, e.g., FOFs 633–35; COL 33; Judgment ¶ III(2).

138

FOF 636.

33

We do not agree with the trial court’s analysis for several reasons. First, we stated in WOC

II that an adequacy determination should not depend on “inputs” such as funding per student;

instead, the determination “is plainly result-oriented,” looking to “the results of the educational

process measured in student achievement.”139 Yet, in the trial court’s judgment, all seven of its

declarations regarding adequacy are expressly based on the input of inadequate funding.140 To place

so much reliance on expert testimony as to the specific amount of funding needed was therefore

misguided.

Second, the trial court’s “fact” findings as to the specific amount of funding needed to

achieve a general diffusion of knowledge are, we think, beyond the current state of science in this

field. We have warned that in school finance cases where we must decide constitutional questions,

the trial court’s findings play a “limited role.”141 This case demonstrates why. To determine as a

matter of fact 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

139

WOC II, 176 S.W .3d at 788.

140

For example, the second adequacy declaration states:

The ISD Plaintiffs have shown that the cost of meeting the constitutional mandate of adequacy (the

“general diffusion of knowledge”) exceeds the maximum amount of funding that is available to them

at the $1.04 M&O tax rate (the highest rate accessible without a TRE). Accordingly, THIS COURT

DECLARES the State’s school finance system fails to satisfy the Article VII, Section I adequacy

requirement as to the ISD Plaintiffs districts. The ISD Plaintiffs also have shown that the cost of

meeting the constitutional mandate of adequacy exceeds the amount of funding that is or would be

available to them at the maximum $1.17 M&O tax rate. Accordingly, THIS COURT DECLARES the

State’s school finance system fails to satisfy the Article VII, Section I adequacy requirement as to the

ISD Plaintiffs districts.

Judgment ¶ II(3).

141

WOC II, 176 S.W .3d at 785.

34

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. Perhaps for this reason, we have ourselves spoken only obliquely and in general terms on

this issue, stating for example in Edgewood I that “[t]he amount of money spent on a student’s

education has a real and meaningful impact on the educational opportunity offered that student,”142

but recognizing in WOC II, our latest school finance decision, that “more money does not guarantee

better schools or more educated students.”143 We have never sanctioned a trial court’s ordering the

Legislature to spend a specific amount of money on the schools to achieve constitutional adequacy,

as doing so would deprive the Legislature of the broad discretion the Constitution provides for such

inherently political decisions.

We are not alone in expressing uncertainty as to the correlation between more money and

better education. In 1973, the United States Supreme Court rejected a federal constitutional challenge

to the Texas school finance system in San Antonio Independent School District v. Rodriguez.144 The

Court noted:

On even the most basic questions in this area the scholars and educational experts are

divided. Indeed, one of the major sources of controversy concerns the extent to which

there is a demonstrable correlation between educational expenditures and the quality

of education—an assumed correlation underlying virtually every legal conclusion

drawn by the District Court in this case.145

142

777 S.W .2d at 393.

143

176 S.W .3d at 788.

144

411 U.S. 1 (1973).

145

Id. at 42–43.

35

The Court cited numerous conflicting studies, including the Coleman Report,146 a famous study

required by section 402 of the Civil Rights Act of 1964 and often cited for finding a weak correlation

between public school funding and educational achievement. The Coleman Report, “widely

considered the most important education study of the 20th century,”147 surveyed 4,000 public schools

and over 645,000 students,148 and runs over 700 pages. Its primary conclusion is this:

The first finding is that the schools are remarkably similar in the way they relate to

the achievement of their pupils when the socioeconomic background of the students

is taken into account. It is known that socioeconomic factors bear a strong relation

to academic achievement. When these factors are statistically controlled, however,

it appears that differences between schools account for only a small fraction of

differences in pupil achievement.149

According to one retrospective on the Report, “Coleman’s findings indisputably documented that

variation between schools in their resource levels mattered little for variation among individual

students, a result that remains the seminal finding in U.S. sociology of education. . . . Forty years on,

the findings of the Coleman report hold up remarkably well, in some ways distressingly so.”150

146

J AM ES S. C O LEM AN ET AL ., E Q U ALITY O F E D U C A TIO N A L O PPO RTUN ITY (U.S. Office of Education 1966),

available at http://files.eric.ed.gov/fulltext/ED012275.pdf.

147

Barbara J. Kiviat, The Social Side of Schooling, J O H N S H O PKIN S M AGAZIN E (April 2000), available at

http://pages.jh.edu/jhumag/0400web/18.html.

148

C O LEM AN , supra note 146, at 8. See also id. at 325 (“Taking all these results together, one implication stands

out above all: That schools bring little influence to bear on a child’s achievement that is independent of his background

and general social context; and that this very lack of an independent effect means that the inequalities imposed on

children by their home, neighborhood, and peer environment are carried along to become the inequalities with which they

confront adult life at the end of school.”).

149

Id. at 21–22.

150

Adam Gamoran & Daniel A. Long, Equality of Educational Opportunity: A 40-Year Retrospective 3, 19

(W is. C tr. for E d uc. R esearch, W orking P a p e r N o . 2 006 -9 , 2 0 0 6 ), availab le at

http://wcer-web.ad.education.wisc.edu/docs/working-papers/W orking_Paper_No_2006_09.pdf.

36

We express no opinion on the 50-year-old Coleman Report, nor, frankly, are we qualified to

do so. But the controversy hardly ended with the Coleman Report. Hundreds of similar studies,

reaching conflicting conclusions, have followed.151 Some amici curiae have filed Brandeis briefs

citing recent studies going both ways on the issue of whether more spending means a better

education.152 But the trial court in effect decided to end that ongoing debate and declare the school

system unconstitutional because spending was below a specific price point it deemed necessary to

achieve a general diffusion of knowledge.

Courts should not sit as a super-legislature. Nor should they assume the role of super-

laboratory. They are not equipped to resolve intractable disagreements on fundamental questions in

151

Id. at 8.

152

For example, as support for “a significant causal relationship between school funding and improvements in

long-term educational outcomes,” amici curiae Center for Public Policy Priorities et al. cite C. Kirabo Jackson et al., The

Effect of School Finance Reforms on the Distribution of Spending, Academic Achievement, and Adult Outcomes (Nat’l

Bureau of Econ. Research, W orking Paper No. 20118, 2014). Amici Curiae Senator Phil Gramm and Stacy Hock quote

another study for the opposite conclusion, that “there is essentially no link between state education spending (which has

exploded) and the performance of students at the end of high school (which has generally stagnated or declined).”

Andrew J. Coulson, State Education Trends: Academic Performance and Spending over the Past 40 Years 4 (Cato Inst.

Policy Analysis No. 746, March 18, 2014), available at http://object.cato.org/sites/cato.org/files/pubs/pdf/pa746.pdf.

Amicus Curiae The Goldwater Institute quotes the conclusion of another researcher and expert witness for the Intervenors

that “no currently available evidence shows that past judicial actions about school finance— either related to equity or

adequacy— have had a beneficial effect on student performance,” and that court-ordered spending increases have not

boosted student performance for this “quite obvious” reason: “Measures of school resources do not provide guidance

either about the current quality of schools or about the potential for improving matters.” Eric A. Hanushek, Introduction,

in C OURTING F AILURE : H OW S CHOOL F INAN CE L AW SU ITS E XPLOIT J U D GES ’ G OO D I N TENTIO N S AND H ARM O UR C HILDREN

xxiii–xxiv (Eric A. Hanushek ed. 2006), available at http://hanushek.stanford.edu/sites/default/files/publications/

courting_failure.pdf. As an expert in today’s case, Hanushek offered nationwide data showing that while, over several

decades, real expenditures per student have steadily increased, test scores have essentially remained flat. Gorman and

Long, supra note 150, cite seven Hanushek articles in their bibliography, more than any other author including Coleman

himself. As with Coleman, we do not endorse Hanushek’s views, but there is little denying he is a recognized scholar

in the field of educational funding. The United States Supreme Court has cited Hanushek as its lead authority in noting

“a growing consensus in education research that increased funding alone does not improve student achievement.” Horne

v. Flores, 557 U.S. 433, 464 n.17 (2009). The trial court, however, adjudged Hanushek’s views unpersuasive. E.g., FOFs

648–52.

37

the social sciences. Arthur Miller may have referred to a trial as the crucible, but we doubt he saw

it as the best place for reducing scientific truth when the scientific community itself has reached an

impasse.

Another problem with placing a dollar figure on adequacy is the trial court’s reliance on

footnote 10 of Edgewood IV.153 In FOF 622, the trial court stated that in Edgewood IV a general

diffusion of knowledge required “about $3,500 per weighted student.” An expert, Dr. Baker, adjusted

this figure for inflation in education costs and calculated an equivalent amount of $6,576 in 2011.

Using this figure, the trial court found in FOFs 623 and 624 that fewer than a quarter of districts

could raise this amount even if taxing at the maximum rate of $1.17. In FOF 624 the court

recognized that the $3,500 figure was only a “rough approximation,” but nevertheless found it

supportive of the other dollar figures reached by Odden and Moak. 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.”154

The problem with this analysis is that we never held in Edgewood IV that $3,500 per student

was required to achieve a general diffusion of knowledge. We most assuredly did not decree that the

Legislature must at a minimum fund at this level, forever and a day, with adjustment under the latest

and best index for measuring inflation in the cost of education. Our reference to this figure did not

even occur in a discussion of the adequacy requirement. Rather, we mentioned the figure in our

discussion of financial efficiency, a separate requirement that focuses on equality of funding and not

153

917 S.W .2d at 731 n.10.

154

FOF 628.

38

on the absolute level of funding. We assumed the trial court was correct that the $3,500 level was

the minimum required for a basic education, and then held that financial efficiency standards were

met, explaining that the equal access to funding required for financial efficiency only applies to “the

funding necessary for a general diffusion of knowledge” and did not apply to supplemental funding

for enrichment. A $600 advantage in funding per student available to the richest districts taxing at

a $1.50 rate was not dispositive, because taxing at lower rates would bring in the $3,500 per

student.155 We found the disparity acceptable given that we were only concerned with the disparities

in funding and tax rates needed to provide a general diffusion of knowledge. We did not separately

decide whether, under an adequacy challenge, the $3,500 figure was in fact the amount needed to

provide an adequate education. That question was not before us.156 Instead, Edgewood IV says almost

in passing, in an earlier discussion, that the system provided a general diffusion of knowledge

because of the accountability regime the Legislature set up.157

It is important to see that, in Edgewood IV, we found the $3,500 figure relevant to support

the Legislature’s discretionary choices in providing the system’s financial efficiency. We accepted

that figure as the level of funding necessary to provide a general diffusion of knowledge, to identify

the ceiling up to which the Constitution required substantially equal access to “efficient” funding.

In today’s case, the trial court used the figure as a floor to create a constitutional minimal funding

155

Edgewood IV, 917 S.W .2d at 731 & n.12.

156

Nor was this issue tried in the trial court. Justice Spector’s dissent explained that the trial court had “severed

out what it called the ‘adequacy issues’ including the issue of ‘whether the legislature appropriates sufficient funds for

districts to provide a constitutionally, minimally acceptable education.” Id. at 768 (Spector, J., dissenting).

157

Id. at 730.

39

amount, and establish a violation of the adequacy requirement. We think that use is very different

from the use we made of it in Edgewood IV, and is misplaced.

We do not question that a school system must spend money to accomplish a general diffusion

of knowledge. Common sense says as much, as have we.158 Our financial efficiency doctrine

presupposes that some good comes from equalizing access to funding. But here the trial court went

much further, embarking on a quest to calculate the statewide dollar cost of an adequate education,

and declaring the system unconstitutional because the Legislature had not provided funds to meet

that threshold. What is not clear, given the current state of knowledge in the social sciences, is that

spending a specific amount of additional money necessarily correlates to a better education as

measured by objective outcomes. Nor is it clear that the specific cost of a constitutionally adequate

education for the entire State can reasonably be determined by a court and therefore justifiably

imposed on the Legislature as a constitutional mandate. In defense of the trial court’s calculation of

the minimum dollar figure needed for a constitutionally adequate education, the Charter School

Plaintiffs argue that “the State did not present an alternative legal minimum funding level.” CCISD

similarly argues that the State “offered no estimate of the costs of a constitutionally adequate

education at trial.” But such argument begs the question vexing us, whether the state of human

knowledge makes such a calculation possible, much less constitutionally required.

158

E.g., id. at 731 (recognizing that districts had “the funds necessary for a general diffusion of knowledge”);

WOC II, 176 S.W .3d at 785 (“It would be arbitrary, for example, for the Legislature to define the goals for accomplishing

the constitutionally required general diffusion of knowledge, and then to provide insufficient means for achieving those

goals.”); id. at 788 (“[I]t is useful to consider how funding levels and mechanisms relate to better-educated students.”).

40

Yet another problem with Odden’s testimony is that he based his dollar figures wholly on

what he determined to be “best practices,” without regard for or deference to the Legislature’s chosen

practices. As explained further immediately below, the Constitution only requires the State to

provide an “adequate” education, not the “best” education available through the use of various inputs

deemed “best practices” by an expert.

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 this 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. This error infected the entire adequacy analysis, influencing the trial court over and over,

and rendering its ultimate conclusion that the school system is constitutionally inadequate hopelessly

flawed.

2. The Trial Court’s Focus on Other Inputs and “Best Practices”

The trial court made many findings and conclusions that can only be characterized as findings

of inadequate inputs, relating to class size, tutoring, interventions for special needs students, nurses,

security guards, etc.159 The court made these findings statewide, as to some 36 individual districts,

159

For example, COL 32 holds:

This Court rejects the notion that the general diffusion of knowledge requires expenditures only in the

instructional program described in statute and that other expenditures are merely “extraneous.” A

district cannot provide a constitutionally adequate education without a sufficient support network,

which may include, among other things, (a) adequate and well-maintained facilities, (b) nurses to keep

students healthy, (c) security guards in certain schools to keep students safe, (d) guidance counselors

to help students with course selection and with planning for college and careers, (e) paraprofessionals

to provide vital assistance to teachers, (f) libraries with both print and electronic resources and

librarians to assist students and teachers in using these resources, (g) tutors to help struggling students,

41

and as to ELL and economically disadvantaged students. The trial court’s heavy reliance on what it

found to be inadequate inputs was in our view flawed. Moreover, even if we sanctioned a focus on

inputs generally, many of these 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.

We have never held that constitutional adequacy requires the State to employ what are, in the

view of one expert or another, the “best practices” recognized by a segment of the expert community.

Funding questions aside, the trial court strayed by repeatedly looking to “best practices” regarding

pre-k programs, school size, dual language classes, class size, providing for the needs of ELL and

economically disadvantaged students, and so on, and holding that a failure to implement such

practices “could be considered arbitrary and unconstitutional.”160 The trial court noted, in FOFs 612

and 615, that Dr. Odden looked to best practices in arriving at his dollar figures for an adequate

and (h) transportation. (See supra Part I.C.3.d (FOF 575, et seq.).) In some districts, the general

diffusion of knowledge may additionally require programs designed to keep students in school until

graduation.

160

The trial court referred to best practices in FOFs 488, 612, 615, 1190, 1191, 1197, 1199, and COL 31. By

way of example, COL 31 holds:

Measures that superintendents and other experts have identified as best practices to attain the

legislatively mandated outcome objective of college and career readiness include, among other things,

(a) manageable class sizes, particularly for economically disadvantaged and ELL populations, (b)

preschool programs of sufficient quality to provide a “head start” to special needs students, (c)

remedial and literacy programs to help ELL, economically disadvantaged, and other special needs

students, including summer school and after school programs, (d) salaries that can attract and retain

sufficient numbers of qualified teachers, and (e) vocational and career courses to give those students

that cannot attend college an opportunity to succeed in post-secondary employment settings. . . . The

Court identifies these practices as examples of ways to accomplish the general diffusion of knowledge,

not to order the Legislature to adopt these practices as per se constitutional; however, where research

supports a practice as effective, an approach that undermines those practices, without replacing them

with another approach that is supported by research as reasonable, could be considered arbitrary and

unconstitutional.

42

education.161 The court accepted Odden’s analysis as providing “a reasonable estimate of the cost

of an adequate education in Texas,”162 and expressly found that best practices “are credible factors

for determining the cost of education.”163 But the Legislature is not constitutionally required, under

an inputs approach to adequacy we have rejected, to assure that districts statewide impose specific

inputs in the form of myriad best practices.

3. The State’s Failure to Calculate Education Costs

Continuing their input-based approach, the Plaintiffs argue that the educational system is

inadequate because the State has failed to make its own calculations of the funds needed to meet its

performance standards or to obtain a general diffusion of knowledge. They rely on section 42.007

of the Education Code, which provides in part:

(a) The Legislative Budget Board shall adopt rules, subject to appropriate

notice and opportunity for public comment, for the calculation for each year of a

biennium of the qualified funding elements, in accordance with Subsection (c),

necessary to achieve the state policy under Section 42.001.

(b) Before each regular session of the legislature, the board shall, as

161

For example, FOF 615 finds:

Some of the key strategies recommended by Dr. Odden's evidence-based approach include (1) core

teachers for class sizes of fifteen in kindergarten through third grade and of twenty-five in grades four

through twelve, (2) full-day kindergarten; (3) specialist teachers at 20% of core teachers at elementary

and middle schools and 33% at high school, and (4) instructional coaches to provide professional

development, including classroom observation and feedback for teachers. . . . Dr. Odden’s

evidence-based model provides additional resources, including tutors and summer school, which are

targeted toward struggling students. . . . These strategies are supported by the evidence as “best

practices” and are credible factors for determining the cost of education. Dr. Odden testified that

Texas is unlikely to substantially improve student performance without implementing the core

interventions recommended by his evidence-based model.

162

FOF 620.

163

FOF 615.

43

determined by the board, report the equalized funding elements to the commissioner

and the legislature.

Subsection (c) then sets out various funding elements. Section 42.001 describes general state

educational policies such as the policy that “each student enrolled in the public school system shall

have access to programs and services that are appropriate to the student’s educational needs.”

The Plaintiffs say that section 42.007 requires the State to make its own adequacy

calculations. Fort Bend ISD, for example, argues that section 42.007 “is the way the Legislature can

evaluate, objectively, whether the State is meeting its constitutional duty to structure, operate, and

fund a public school system that spreads knowledge diffusely.” The trial court agreed with the

Plaintiffs, citing section 42.007 for the proposition that the State has a “constitutional responsibility”

“to make a reasonable effort to determine what it will cost to adequately provide for its own

standards and meet its own definition of a general diffusion of knowledge.”164

The State does not deny that the Legislative Budget Board has failed for years to comply with

section 42.007. But even assuming that section 42.007 is a statutory mandate for the Legislature to

calculate the level of funding needed to provide for a general diffusion of knowledge, this failure

does not establish a constitutional violation of the adequacy requirement.

As explained above, the spending level is an input that generally is not decisive in

determining whether the State is providing a general diffusion of knowledge. Again, we have made

clear that the approach should be output driven. Given the highly controversial issue of whether more

spending will necessarily raise student achievement, a debate that has raged for decades in the social

164

COL 30.

44

sciences, we cannot say that the State has acted in an unconstitutionally arbitrary manner simply

because it has not attempted to assign precise dollar values as to the costs of providing a general

diffusion of knowledge. One could argue with equal persuasiveness that attempting to assign such

dollar values is itself arbitrary, given the uncertainty that prevails in this realm of educational

research.

To be sure, the better practice might be for the Legislature to regularly calculate the cost of

a general diffusion of knowledge, or components thereof, particularly in light of section 42.007. But

complaining that the State has not come up with its own dollar 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.165 A failure

to comply with what is arguably a creative accounting requirement does not shift the burden of proof

and create a presumption that the underlying system is, as a constitutional matter, failing to provide

an adequate education to Texas students.

Further, the State offered evidence that, through the Academic Excellence Indicator System,

the State generates exhaustive, publicly available reports at the campus, district, region, and state

levels on students, staff, programs, and expenditures.166 While additional data might be useful, the

Plaintiffs did not demonstrate a system so devoid of data that the lack of information amounts to a

constitutional violation.

165

Edgewood IV, 917 S.W .2d at 725 (“[W ]e begin with the presumption that [the system] is constitutional; the

burden of proof is on those parties challenging this presumption.”).

166

See Tex. Educ. Agency, Academic Excellence Indicator System, http://ritter.tea.state.tx.us/perfreport/aeis.

45

4. Statutory Weights and Adequacy Claims Relating to Subgroups

The trial court separately held that, due to inadequate funding, the school finance system was

constitutionally inadequate and unsuitable as to ELL and economically disadvantaged students.167

We must decide whether the courts should entertain Article VII, section 1 claims as to subgroups,

as urged especially by the Edgewood ISD Plaintiffs. They point to troubling findings as to

economically disadvantaged and ELL students, such as performance gaps that are large and growing.

They argue the State must target more funding toward bridging these gaps.

The performance of student subpopulations, especially a large group such as economically

disadvantaged students who comprise more than 60% of students, is relevant to whether the system

167

The trial court’s Judgment at paragraph II(2) declared:

The Edgewood ISD Plaintiffs have further shown that the costs of providing a general diffusion of

knowledge to economically disadvantaged and English Language Learner students exceed the funding

provided through the current system, due to the arbitrarily designed and insufficient weights for those

students. This defect coupled with the arbitrarily designed and insufficient Foundation School Program

funding made available to districts like the Edgewood ISD Plaintiffs cumulatively prevent those

districts from generating sufficient resources to accomplish a general diffusion of knowledge for the

State’s economically disadvantaged and English Language Learner students. Accordingly, THIS

COURT DECLARES that the Texas school finance system violates the “make suitable provision”

clause in Article VII, Section l of the Texas Constitution because the system is not “structured,

operated, and funded so that it can accomplish its purpose [of providing a general diffusion of

knowledge] for [economically disadvantaged and English Language Learner] children.” WOC II, 176

S.W .3d at 753.

Paragraph III(4) declared:

The Edgewood ISD Plaintiffs, the TTSFC Plaintiffs, and the Fort Bend ISD Plaintiffs have further

shown that economically disadvantaged students and English Language Learner students are not

achieving a general diffusion of knowledge and that the cost of providing a general diffusion of

knowledge to these students exceeds the amount of funding made available for their education under

the current school finance system. The Court concludes the funding for economically disadvantaged

and English Language Learner students is inadequate and arbitrary. Accordingly, THIS COURT

DECLARES the current public school finance system is inadequate for the provision of a general

diffusion of knowledge for economically disadvantaged and English Language Learner students under

Article VII, Section 1 of the Texas Constitution.

46

as a whole is constitutionally adequate. But this Court has never squarely held that a separate,

cognizable adequacy claim can be asserted by a student subpopulation such as economically

disadvantaged or ELL students. In reviewing an adequacy claim in WOC II, the Court noted “wide

gaps in performance among student groups differentiated by race, proficiency in English, and

economic advantage.”168 This observation suggests that the Court could in theory find constitutional

inadequacy as to specific groups. But the Court did not proceed to decide adequacy as to any

particular subgroup in WOC II and ultimately found no adequacy violation. And the Court also said

that article VII, section 1 only requires “an efficient system of free public schools, considering the

system as a whole, not a system with efficient components.”169 It asked whether “the system as a

whole is providing for a general diffusion of knowledge.”170 The State also points out that article VII,

section 1 only requires a “general diffusion of knowledge,” not a diffusion of knowledge to

particular groups.

We do not today foreclose completely a ruling of constitutional inadequacy as to subgroups,

but conclude that the showing necessary for such a ruling would have to be truly exceptional, for

several reasons. First, as noted the Constitution itself and our own decisions suggest that we are

typically confined to asking whether the system as a whole is providing a general diffusion of

knowledge.

Second, for practical reasons we are reluctant to start down the path of entertaining claims

168

176 S.W .3d at 789.

169

Id. at 790 (emphasis added, footnote and internal quotation marks omitted).

170

Id. at 788 (emphasis added).

47

of subpopulations. Here we have claims on behalf of ELL and economically disadvantaged students.

Similar claims 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,

etc. The only practical limitation on such claims, beyond creativity, might be the availability of data,

but if the record in this case is any indication, a staggering amount of data exists on the educational

system and its students. If the Court starts down that path, then truly perhaps “there is no end in

sight.”171 Some resort to practical concerns is appropriate in constitutional decisionmaking, because

our Constitution’s framers were practical people with practical concerns and intentions. In describing

the federal Constitution, the United States Supreme Court has said, “It must be remembered that the

framers of the Constitution were not mere visionaries, toying with speculations or theories, but

practical men, dealing with the facts of political life as they understood them [.]”172 Surely the same

can be said of our State’s framers and our own Constitution.

The Plaintiffs relied heavily at trial on achievement gaps themselves as the reason funding

should be increased for these groups. For example, Moak testified that the funding multipliers for

economically disadvantaged and ELL students should be doubled because of a persistent education

gap. The trial court, too, concluded that the school system’s failure to close achievement gaps of

economically disadvantaged and ELL students established a constitutionally inadequate system as

171

Id. at 801 (Brister, J., dissenting).

172

South Carolina v. United States, 199 U.S. 437, 449 (1905).

48

to these groups.173 But differences in achievement among subgroups do not necessarily establish a

failure of the school system in its allocation of resources. The Coleman Report, for example, though

not the final word on this issue, concluded that factors distinguishing the students themselves

accounted for vastly larger differences in achievement than differences in the resources provided by

the school system.174 The Plaintiffs concede that economically disadvantaged students face

challenges outside the schools that affect their educational achievement, and indeed offered much

evidence to the trial court in support of this position. According to the Edgewood Plaintiffs, “The

challenges that economically disadvantaged students face stem largely from the opportunities they

have available to them where they live.” This seems inarguable. Demography is not destiny. Many

of our most celebrated achievers—in every walk of life—overcame tough odds to thrive, conquering

headwinds galore. But factors outside the classroom play an undeniable role in many children’s lives.

173

For example, FOF 520 finds:

Based on the output data described above in Parts I.C.2.a.iii (FOF 298, et seq.) and I.C.2.b.iii (FOF

349, et seq.), the Court finds that economically disadvantaged and ELL students are not achieving a

general diffusion of knowledge. The inability of districts to offer the necessary interventions (see

supra Part I.C.2.c (FOF 379, et seq.)) to help these populations overcome the educational obstacles

they face (see supra Parts I.C.2.a.i (FOF 277, et seq.) and I.C.2.b.i (FOF 333, et seq.)) means that

school districts are not able to provide these students with a meaningful opportunity to achieve a

general diffusion of knowledge. Therefore, the Court finds that the education system is constitutionally

inadequate as to economically disadvantaged and ELL students.

174

The Report states:

This analysis concentrated on the educational opportunities offered by the schools in terms of their

student body composition, facilities, curriculums, and teachers. This emphasis, while entirely

appropriate as a response to the legislation calling for the survey, nevertheless neglects important

factors in the variability between individual pupils within the same school; this variability is roughly

four times as large as the variability between schools. For example, a pupil attitude factor, which

appears to have a stronger relationship to achievement than do all the “school” factors together, is the

extent to which an individual feels that he has some control over his own destiny.

C O LEM AN , supra note 146, at 22–23.

49

The Coleman Report, as discussed above, reached the seismic conclusion a half-century ago that

family-related variables, for example, matter more—far more—than per-pupil expenditures when

it comes to predicting academic success. The Plaintiffs presented much data on achievement gaps

of ELL 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. Again,

as we have recognized, “more money does not guarantee better schools or more educated

students.”175

In the same vein, the Plaintiffs complain that weights assigned for funding economically

disadvantaged and ELL students are inadequate. They complain of the .2 statutory multiplier for

economically disadvantaged students176 and the .1 multiplier for students in bilingual and special

language programs177 as inadequate, pointing out that these multipliers have not changed since 1984.

They also complain that other adjustments such as the cost of education index (CEI), and the

adjustments for districts with low populations or low population density, have not changed for many

years.178 But the fact that a multiplier has not changed over time in itself proves little. Changes in

real-world conditions over time may warrant an upward or downward revision to a multiplier. This

Court, obviously, does not assume that an old decision is necessarily wrong, else we abolish the

doctrine of stare decisis. One of the Plaintiffs’ lead experts, Allan Odden, relied heavily on the

175

WOC II, 176 S.W .3d at 788.

176

T EX . E D U C . C O D E § 42.152(a).

177

Id. § 42.153(a).

178

See T EX . E D U C . C O D E §§ 42.102 (CEI adjustment), 42.103–.104 (small and mid-sized district adjustment),

42.105 (sparcity adjustment).

50

Tennessee STAR study conducted in the 1980s to support his opinions regarding class size, as well

as studies going back to the early 1960s to support his opinions on full-day kindergarten. Yet the trial

court was willing to rely on Odden’s assessments of best practices in arriving at the cost of an

adequate education.

Moreover, multipliers may seem inadequate if considered in isolation, but they sometimes

have a cumulative effect. For example, a poor immigrant student’s status may boost district funding

through three separate adjustments—the multipliers for economically disadvantaged and ELL

students, and the CEI adjustment that separately considers the number of low-income students in the

district.179

In arguing for adjustments that give proportionately more to certain subgroups, the Plaintiffs

offered evidence, including expert testimony, that their favored subgroups benefitted from certain

programs and that the State’s multipliers are too low. For example, they offered evidence that

economically disadvantaged students benefitted from access to pre-k programs and smaller class

sizes.

This argument can be viewed two ways. One understanding is that the Plaintiffs are in effect

arguing that, for any level of total funding, certain groups deserve a larger piece of the pie. The

Plaintiffs are hard put to justify this result as necessary to improve “the system as a whole” unless

they can show that the achievement gains to the allegedly underfunded subgroup will more than

offset the losses that other students will sustain if they receive less funding. That conclusion does

179

See supra note 32 and accompanying text.

51

not necessarily follow from evidence that certain disadvantaged groups are more expensive to

educate or benefit from certain targeted interventions such as pre-k programs or smaller classes,

evidence that was the subject of numerous trial court findings. For a given sum of money, the

achievement gains, as measured by objective outputs such as test scores, for the subgroup favored

by a plaintiff may be larger, smaller, or the same as the gains achieved by spending that same sum

in targeted funding on other groups. Plaintiffs’ expert Dr. Baker, for example, conceded that

“[h]aving access to more resources always gives the opportunity to do more with it, whether you’re

talking about in a high poverty community or a high wealth community.” One might expect any

student could benefit from one improvement or another made available with additional spending,

given the trial court’s 1,508 fact findings that virtually everything about the current system is broken.

An alternative understanding of the Plaintiffs’ argument is that favored and disfavored

subgroups both deserve more funding. But this argument merely recasts the argument for more

dollars, the weaknesses of which are discussed above. The trial court concluded that adjustments for

certain subgroups were insufficient, but it also held that funding for the system as a whole was

insufficient. For example, the court relied on Moak’s estimate that an updated cost of education

index (under section 42.102 of the Education Code) “should provide approximately $1 billion more

to school districts.”180 If the court was merely relying on its view that more money was needed, this

finding suffers from the same problems we have already discussed regarding the court’s efforts to

tie specific dollar amounts to a greater diffusion of knowledge. Again, as we have recognized, “more

180

FOF 598.

52

money does not guarantee better schools.”181 Alternatively, if it is all a zero-sum game, the court and

the Plaintiffs did not take the crucial step of showing that diverting a billion dollars from one group

and giving it to another would measurably improve the system’s overall diffusion of knowledge.

Stated another way, the Plaintiffs would have a better argument if they had shown that their

selected subgroups—ELL and economically disadvantaged students here—see greater improvements

in test scores or some other quantifiable measure of achievement for each dollar of additional

spending than other groups see, and that these subgroups therefore deserve a disproportionate share

of existing or additional funding. The Plaintiffs failed to make such showings. Indeed, according to

one of the State’s experts, Dr. Michael Podgursky, such a showing is impossible because no one

knows “the best relationship between inputs and outputs.” He took issue with questioning “assuming

someone knows how to measure—someone knows the truly efficient way to raise student

achievement and use the inputs in the most efficient way possible to produce the outputs, and I don’t

think anyone knows that . . . you’re asking me to do something I don’t think anyone can do.”

Presumably, a very precise knowledge would be required to target specific dollar inputs for one

subgroup and thereby raise their achievement, without correspondingly lowering the outputs of other

groups who would be deprived of funding, and Podgursky appeared to think that no such knowledge

exists. The trial court agreed with Podgursky’s assessment.182

The trial court nevertheless concluded that the school finance system as a whole, and as to

economically disadvantaged and ELL students in particular, was unconstitutionally unsuitable due

181

WOC II, 176 S.W .3d at 788.

182

FOF 1470.

53

to inadequate funding weights assigned to those two subgroups, and more generally because of the

system’s reliance on “outdated, arbitrary weights and allotments that do not reflect the actual cost

of education to determine funding levels for districts.”183 The court relied heavily on the testimony

of Moak, who thought the multipliers for ELL and economically disadvantaged students should be

doubled, though Moak conceded to having no data in his report that marginal increases in funding

for these groups would increase their performance.

The trial court concluded that economically disadvantaged and ELL students particularly

benefitted from some strategies such as smaller classes in lower grades,184 but that does mean that

other groups would not benefit equally from spending on other strategies that particularly benefit

those other groups. If, after all, funding is the key to an adequate education, as the trial court found,

then those students receiving less will suffer if funds are diverted to Plaintiffs’ selected subgroups.

But article VII, section 1 requires “that the public school system be structured, operated, and funded

so that it can accomplish its purpose for all Texas children.”185

If the Plaintiffs are arguing that economically disadvantaged and ELL students are entitled

to a greater share of funding because performance gaps by themselves demonstrate a constitutional

violation, we reject this argument. The financial efficiency doctrine requires a rough equality of

183

COLs 41, 78–79. W hile the trial court issued these conclusions in assessing suitability rather than adequacy,

the two requirements overlap, as we note in the next part of our opinion. The two elements particularly overlap in this

case because the trial court’s suitability analysis was tied to its adequacy determination that the school system was

underfunded. COLs 41, 78, and 79 all expressly concluded that the system was unsuitable because it did not provide

“sufficient resources to accomplish a general diffusion of knowledge.”

184

FOF 404.

185

WOC II, 176 S.W .3d at 753 (emphasis added).

54

access to district funding for similar tax effort. Its aim is equality of opportunity, not equality of

results. We have never interpreted our Constitution, under the adequacy requirement, to mandate

equality of student achievement by district or student subgroup. Such equality of results may not be

possible through changes in school funding alone, given the respected body of educational research

holding that school resources account for only a small fraction of differences in student achievement.

Equality of educational achievement is a worthy goal of government, and society at large, but it is

not a constitutional requirement.

For all of these reasons, we hold the Plaintiffs failed to prove that the system was so

parsimonious in its allocation of resources to ELL and economically disadvantaged students as to

amount to an unconstitutionally inadequate allocation. We also hold the Plaintiffs failed to prove that

current funding weights are so flawed as to render the school system as a whole constitutionally

inadequate.

5. Test Scores and Other Outputs

Because the adequacy standard “is plainly result-oriented,”186 the proper focus of a

constitutional adequacy analysis should be on outputs that measure student performance. The trial

court considered these outputs, concluding in its judgment that “[a]ll performance measures

considered at trial, including STAAR tests, EOC exams, SATs, the ACTs, performance gaps,

graduation rates, and dropout rates among others, demonstrated that Texas public schools are not

186

Id. at 788.

55

accomplishing a general diffusion of knowledge due to inadequate funding.”187 We disagree with this

legal conclusion.

We have already discussed why we disagree with the trial court’s analysis of funding. That

problem aside, we examine whether the record shows that test scores and other outputs—the proper

focus of the adequacy determination—demonstrate a constitutionally inadequate system. They do

not.

At the outset, we must consider whether the system, as the Legislature has designed it, is

adequate to meet the constitutional requirement to provide a general diffusion of knowledge. As

explained above, the Legislature need only act “reasonably” in making these policy decisions. “[N]o

one would dispute that a public education system limited to teaching first-grade reading would be

inadequate.”188 But “few would insist that merely to be adequate, public education must teach all

students multiple languages or nuclear biophysics.”189 Somewhere between such extremes, the

Legislature must determine and define the “required curriculum” that, in its view, the education

system should provide. Once it has done so, our review is “very deferential,” and we must uphold

the Legislature’s determination unless it is arbitrary and unreasonable.190

We have explained in some detail the system the Legislature has chosen, and we have no

difficulty concluding that it does not represent an arbitrary and unreasonable effort to provide a

187

Judgment ¶ III(1).

188

WOC II, 176 S.W .3d at 778.

189

Id.

190

Id. at 790.

56

general diffusion of knowledge. District and campus performance is reviewed based on student

achievement measures including test scores, dropout rates, and graduation rates.191 Continued

accreditation of districts and charter schools also depends on these measures of outputs.192

In Edgewood IV, we held that this accountability regime, by itself, satisfied “the Legislature’s

constitutional obligation to provide for a general diffusion of knowledge.”193 In WOC I, we again

accepted that, under the Legislature’s chosen system, the provision of an accredited education

satisfies the Legislature’s obligation to provide a general diffusion of knowledge.194 We presumed

that the system as designed accomplishes a general diffusion of knowledge, showing “deference to

the Legislature’s choices” in this area of shared constitutional authority.195 We acknowledged in

Edgewood IV and later in WOC I that the Legislature’s accountability regime, as designed, may not

always be sufficient to meet the constitutional requirement of providing a general diffusion of

knowledge.196 Here, however, we cannot conclude that the legislatively designed system provides

and requires so little as to indicate that the Legislature has arbitrarily abandoned its duty to provide

a general diffusion of knowledge.

191

T EX . E D U C . C O D E §§ 39.054(b), 39.053(c)(1).

192

Id. §§ 39.052, 39.104.

193

917 S.W .2d at 730.

194

107 S.W .3d at 581.

195

Id.

196

Edgewood IV, 917 S.W .2d at 730 n.8 (“This is not to say that the Legislature may define what constitutes

a general diffusion of knowledge so low as to avoid its obligation to make suitable provision imposed by article VII,

section 1.”); WOC I, 107 S.W .3d at 581 (“[A]n accredited education may provide more than a general diffusion of

knowledge, or vice versa[.]”).

57

We next consider whether the system is sufficiently operating as designed. In today’s case,

the State showed that in 2013, 92.8% of school districts and charter schools and 84.2% of individual

school campuses achieved the “Met Standard” rating. In 2014, 90.2% of school districts and charter

schools and 85.0% of individual school campuses achieved this rating.197 In 2015 the comparable

figures were 94.5% for districts and charter schools and 86.5% for individual campuses.198 In WOC

II, the percentage of students meeting the college-readiness standards of the Texas Higher Education

Coordinating Board stood at 28% in English and 42% in math.199 Those figures stood at 65% and

66% in 2013. We agree with CCISD that, in this case, “accreditation alone simply cannot be

presumed to show satisfaction of the constitutional requirements,” but we think it should be

considered some support in favor of an adequacy determination.

The trial court rejected the presumption of adequacy that follows compliance with the

accountability regime. It reasoned that “the 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.”200 We question

this reasoning. There is nothing unusual in calibrating a grading system to allow most participants

to pass. Further, in WOC II, the trial court had made an essentially identical finding that “the

1 9 7

2 0 1 4 A c c o u n t a b i l i t y S y s t e m S t a t e S u m m a r y ,

http://ritter.tea.state.tx.us/perfreport/account/2014/statesummary.html.

198

2015 Accountability System State Summary, http://ritter.tea.state.tx.us/perfreport/account/2015/

statesummary.html.

199

176 S.W .3d at 769.

200

FOF 117.

58

requirements for an ‘academically acceptable’ rating are set to assure, not that there will be a general

diffusion of knowledge, but that almost every district will meet them.”201 Yet we found the system

adequate.

The trial court in today’s case also criticized what it saw as the State’s “history of slowly

phasing in standards,” noting the phase-in of the TAKS-based accountability system.202 In WOC II,

we noted the phase-in of the TAKS regime,203 and saw nothing to criticize from a constitutional

perspective. Instead, in discussing the statutory mandates found in sections 4.001(a) and 28.001 of

the Education Code (quoted at the beginning of this opinion), we held that “they cannot be used to

fault a public education system that is working to meet their stated goals because it has not yet

succeeded in doing so.”204 And in discussing passing scores for the new TAKS test, we saw nothing

remarkable in the State’s decision that the cut scores “should be lower at first, increasing over three

years, to give teachers and students time to adjust to the new and more difficult test.”205 A phase-in

period is also warranted because, as the trial court recognized, the college-readiness standards were

“vertically aligned” into “the entire curriculum—from kindergarten all the way to high school.”206

201

176 S.W .3d at 788.

202

FOF 120 n.32.

203

176 S.W .3d at 766–67.

204

Id. at 789.

205

Id. at 766.

206

FOF 89.

59

Students who had already started school after the introduction of these new standards did not have

the benefit of schooling under the new vertically aligned curriculum in prior grades.

The trial court also considered performance on the STAAR tests. It found that the initial

student performance was “sobering.”207 Ninth graders took the initial round of tests in 2012. Under

an initial Level II phase-in standard set by TEA, 32% of students failed the English I Reading exam.

The failure rates were 45% for English I Writing, 17% for Algebra I, 13% for Biology, and 19% for

World Geography.208 The trial court also noted significant gaps between economically advantaged

and disadvantaged students.209

In condemning the system as constitutionally inadequate, the trial court considered the early

administrations of the test. Students, teachers, and schools were undoubtedly challenged by new,

harder tests they had not seen. The same was true in WOC II, where we noted, in discussing district

performance ratings: “After the change to the harder test, ratings predictably slid.”210 Again, the

system should not necessarily be written off because it “is working to meet” its new standards but

“has not yet succeeded in doing so.”211 Over the 2004 to 2011 period, scores on the TAKS tests

improved on all subjects, and for all students and various student subgroups (white, African-

American, Hispanic, and economically disadvantaged). One can speculate that the early poor

207

FOF 130.

208

Id.

209

FOF 140.

210

WOC II, 176 S.W .3d at 768.

211

Id. at 789.

60

performance on the STAAR tests was due to funding cuts. But surely some of the difficulties were

simply due to adjustments required to teach to and take the harder and unfamiliar tests. A TEA

testing director so testified, explaining that performance standards are phased in to provide a

meaningful period of adjustment.212 The system is not unconstitutional because the State has decided

to demand more of its schools and teachers, and they predictably faced a transitional period of

adjusting to the more difficult tests.

More recent STAAR results show improvements by some measures. The trial court noted

that the cumulative failure rate on all tests had improved slightly from 2012 to 2013.213 The State

offered evidence that the combined pass rates for spring, summer, and fall of 2012 showed

improvement as compared to the first test in the spring of 2012. For Algebra I, the pass rate went

from 76.8% to 84.7%; for English I Reading, from 67.7% to 81.2%; for English I Writing, from

54.4% to 72.6%; for Biology, from 86.4% to 91.0%; and for World Geography, from 79.7% to

84.4%. For 2013, the results again improved, with pass rates for the class of 2015 ranging from 78%

on English II (combining English reading and writing exams) to 96% in Biology. However, gaps

212

The director of the TEA student assessment division testified:

I think any time we move to a new— a new system, whether it is the assessment system, whether it’s

the curriculum standards, there’s a certain sort of settling in period, you know, if you will. And we also

move— every time we move to a new assessment system or new curriculum standards, generally it’s

because it becomes more rigorous. And educators need time in order to adapt to the new cognitive

demands. They need time for professional development. Students need time to become familiar with

the assessments. And so we allow a phase-in period so that all of those things can happen before we

would hold students to the final recommended standards.

She also testified that “student performance in the first year of a new [testing] program tends to be lower than it was in

the last year of the previous program, and we see increases over time.”

213

FOF 140.

61

among certain subgroups remain, some more pronounced than others. For example, the 78% pass

rate on English II came in at 68.5% for economically disadvantaged and 27.1% per ELL students;

the 96% pass rate on Biology came in at 93.8% for economically disadvantaged students and 79%

for ELL students. Poor performance by ELL students on an advanced English exam is troubling, but

it is not by itself a basis for holding the “system as a whole”214 constitutionally inadequate.

The Class of 2015 was the first to graduate under the STAAR requirements. After Spring

2015 testing, 92% of students had passed all five end-of-course (EOC) exams required for

graduation,215 though some students had to take tests more than once. Broken down by individual

test and certain student subgroups, the numbers also paint a less grim picture than the scores on

which the trial court focused.216 The 2015 EOC pass rates are as follows:

Subject Passing White Hispanic African- Econ.

Rate American Disad.

Biology 99.2% 99.7% 99.0% 98.8% 98.8%

Algebra I 97.8% 98.8% 97.6% 96.4% 97.2%

U.S. History 97.0% 98.7% 96.0% 95.8% 95.4%

English I 95.8% 98.1% 94.4% 94.5% 93.6%

English II 93.7% 97.1% 92.1% 90.9% 90.7%

214

WOC II, 176 S.W .3d at 788 (emphasis added).

215

Texas Education Agency, Class of 2015 STAAR End-of-Course Exam Passing Rate Hits 92 Percent (May

2 9 , 2 0 1 5 ), http ://tea.texas.go v/A b o ut_ T E A /N ews_and_M ultim edia/P ress_R eleases/2015/Class_ o f_ 2 0 1 5

_STAAR%C2%AE_end-of-course_exam_passing_rate_hits_92_percent/. This passage rate is the graduation passing

rate, a phase-in rate, not the final Level II standard passing rate.

216

Id.

62

The NAEP tests, considered by the Court in WOC II,217 show mixed results. For 2013, the

trial court found that NAEP scores dropped on two exams and went up on two. From 2005 to 2011,

the results are described as flat except for the eighth grade math score.218 On that test, the Texas

average went from 281 to 290, compared to the national average which went from 278 to 283. In

2011, Texas ranked 29th in overall scores (reading and math for grades 4 and 8). The State points

out that when the numbers are broken out by subgroup, Texas in 2011 ranked fourth in the nation

for African-American students, seventh for Hispanic students, and eleventh for economically

disadvantaged students.

Graduation rates are another output the State uses in performance and accreditation

reviews.219 According to evidence in the record, Texas had a graduation rate of 86% in 2011, tying

for fourth in the nation.220 According to the U.S. Department of Education, Texas had a graduation

rate of 88% in 2013, tying for second in the nation.221 For that year, the graduation rate for African-

American students was 84.1%, first in the nation. The rate for Hispanic students was 85.1%, first in

the nation. The rate for economically disadvantaged students was 85.2%, second in the nation.222

217

176 S.W .3d at 768–69, 789.

218

FOFs 170–175.

219

T EX . E D U C . C O D E §§ 39.052(b)(1), 39.053(c)(3), 39.054(b).

220

Fort Bend points to other data that the Texas graduation rate was 75.4% and ranked 28th among the States.

However, this data is from 2009 and the expert presenting it testified that “[t]he calculation method that the U.S.

Department of Education is presently using . . . is the superior way to calculate graduation rates.”

221

http://nces.ed.gov/ccd/tables/ACGR_2010-11_to_2012-13.asp.

222

http://nces.ed.gov/ccd/tables/ACGR_RE_and_characteristics_2012-13.asp.

63

These performances stand in contrast to the “severe dropout problem” we described in WOC II.223

On this issue and others, the parties single out, parse, emphasize, and minimize many other

statistics in arguing their respective positions. We have noted a few of the differences in statistical

measures found in the record, such as those relating to measuring graduation rates and revenue per

student.224 The current system leaves much to be desired. But again, using WOC II as a guide, we

noted many difficulties in the system at the time:

In the extensive record before us, there is much evidence, which the district court

credited, that many schools and districts are struggling to teach an increasingly

demanding curriculum to a population with a growing number of disadvantaged

students, yet without additional funding needed to meet these challenges. There are

wide gaps in performance among student groups differentiated by race, proficiency

in English, and economic advantage. Non-completion and dropout rates are high, and

the loss of students who are struggling may make performance measures applied to

those who continue appear better than they should. The rate of students meeting

college preparedness standards is very low. There is also evidence of high attrition

and turnover among teachers statewide, due to increasing demands and stagnant

compensation.

Despite those difficulties, we also noted improvements in some test scores and held that the system

was constitutionally adequate.225 Likewise, today, we conclude that the performance of the system

as measured by the outputs we describe does not establish a violation of the adequacy requirement.

While Texans may desire a public education system that produces even “better” results or better

results more quickly, their remedy lies in the Legislature and thus in the privilege and duty that all

Texans have to elect the legislators who will implement the policy choices they desire. The

223

176 S.W .3d at 769; see also id. at 789 (noting high dropout rates in assessing adequacy requirement).

224

See supra note 220 and infra note 260.

225

WOC II, 176 S.W .3d at 789–90.

64

Constitution, meanwhile, requires only a system that produces a “general diffusion of knowledge,”

and we cannot say that the Legislature has acted arbitrarily or unreasonably in its efforts to produce

that result.

6. Conclusion Regarding Adequacy

Our decision on the adequacy requirement is largely driven by our standard of review, the

legal lens through which we examine this issue. In WOC II, we 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.”226 It is safe to say that the current Texas school system

leaves much to be desired. Few would argue that the State cannot do better. But our function is

limited to reviewing the constitutionality of the system under an extremely deferential standard, one

that places the burden of proving the system constitutionally inadequate on the party challenging it.

The Plaintiffs did not meet that burden.

F. Suitability

The trial court held the current school system is constitutionally unsuitable. We have

recognized a suitability requirement deriving from the text of article VII, section 1, imposing a

legislative duty “to establish and make suitable provision for” an efficient public school system.

The State essentially argues the system is suitable because it is efficiently providing a general

diffusion of knowledge under the adequacy and financial efficiency requirements. The Plaintiffs

argue that adequacy, efficiency, and suitability are separate elements. We have made clear that the

226

Id. at 790.

65

suitability requirement “is not merely redundant of” the adequacy and efficiency requirements.227

Suitability is therefore a separate requirement under article VII, section 1.

But the elements are certainly related, as it would be the odd case where the Legislature is

complying with its duty to efficiently provide a constitutionally adequate education but the system

is nevertheless somehow unsuitable. In WOC II, in two paragraphs, we held the suitability

requirement was met, noting that “[n]either the structure nor the operation of the funding system

prevents it from efficiently accomplishing a general diffusion of knowledge.”228

Our prior decisions offer some insights on suitability. We have stated generally that “if the

Legislature substantially defaulted on its responsibility such that Texas school children were denied

access to that education needed to participate fully in the social, economic, and educational

opportunities available in Texas, the ‘suitable provision’ clause would be violated.”229 We have also

stated that the suitability requirement “refers specifically to the means chosen to achieve an adequate

education through an efficient system.”230 The provision “requires that the public school system be

structured, operated, and funded so that it can accomplish its purpose for all Texas children.”231 We

have given as an example that the system would be unsuitable if it were providing an efficient and

adequate education but there was no legal mechanism in place that “actually required” school

227

Id. at 793.

228

Id. at 794.

229

Edgewood IV, 917 S.W .2d at 736.

230

WOC II, 176 S.W .3d at 793.

231

Id. at 753.

66

districts “to provide an adequate education.”232 So if the Legislature established goals for an adequate

education of students and employed school districts to provide a general diffusion of knowledge, but

those districts were free to ignore legislative goals, the system would be unsuitable.233 However,

reliance on school districts to carry out legislative goals for a general diffusion of knowledge and

heavy reliance on local tax revenues to fund the system do not, by themselves, render the system

unsuitable.234

There is a somewhat fine distinction in our caselaw on suitability. On the one hand, we have

said this requirement “refers specifically to the means chosen to achieve an adequate education.”235

On the other hand, we have stated generally that we leave it to the Legislature “to decide how to meet

the standards” of article VII, section 1, while we have final authority on “whether they have been

met.”236

This Court 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.237 For

example, we held the system met the suitability requirement in WOC II because its structure and

232

Id. at 793.

233

WOC I, 107 S.W .3d at 584.

234

WOC II, 176 S.W .3d at 794.

235

Id. at 793 (emphasis added).

236

WOC I, 107 S.W .3d at 563–64.

237

The Edgewood Plaintiffs appear to agree, contending that the suitability requirement focuses on whether “the

entire system” is accomplishing it goals.

67

operation were not so flawed as to make it “impossible” to efficiently provide a general diffusion of

knowledge.238 The example given above—the 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.

School districts are required to provide instruction in State-designated knowledge and skills to

receive accreditation.239 The State can withhold funding from districts and charter schools failing to

meet these standards, appoint a monitor or conservator, close the district or annex it to another

district, or pursue other statutory remedies.240 The fundamental structure found suitable in WOC II

remains in place today.

The trial court held the school system was unsuitable because it was underfunded,241

essentially tying the suitability analysis to its flawed conclusion that the system is constitutionally

inadequate because it is underfunded, a conclusion we reject above. The Plaintiffs failed to prove

that the school system is unsuitable.

238

176 S.W .3d at 794.

239

T EX . E D U C . C O D E § 28.002(c).

240

Id. §§ 39.052(f), 39.102–.104.

241

See FOF 125 (finding that system was unsuitable because “[t]he Legislature failed to provide additional

financial support with the introduction of the STAAR regime”); COL 41 (holding system unsuitable because it does not

“generate sufficient resources to accomplish a general diffusion of knowledge”); COL 42 (holding system unsuitable

because it “bears no relationship to the actual cost of providing access to a constitutionally adequate education”);

Judgment ¶ II(1) (declaring system unsuitable because “the costs of providing a general diffusion of knowledge exceed

the funding provided”).

68

G. Financial Efficiency

The trial court held the current school finance system violated the “financial efficiency”

requirement of article VII, section 1. On this issue, the ISD Plaintiffs part company. CCISD sides

with the State in arguing that the system is financially efficient.242

Our basic framework for deciding this issue has not changed since Edgewood I, where we

held that “districts must have substantially equal access to similar revenues per pupil at similar levels

of tax effort.”243 And in Edgewood II, we said, “To be efficient, a funding system that is so dependent

on local ad valorem property taxes must draw revenue from all the property at a substantially similar

rate.”244 Exact equality of funding among districts has never been required.245

The State’s duty to provide equal access to funding applies only to the amounts necessary to

provide for a general diffusion of knowledge.246 Once the system provides for a general diffusion of

knowledge, the Legislature “may, so long as efficiency is maintained, authorize local school districts

to supplement their educational resources if local property owners approve an additional local

property tax.”247

242

W e refer to those Plaintiffs alleging violation of the financial efficiency requirement as the Financial

Efficiency Plaintiffs.

243

777 S.W .2d at 397.

244

804 S.W .2d at 496.

245

See Edgewood I, 777 S.W .2d at 397 (holding that financial efficiency does not “require a per capita

distribution”).

246

Edgewood IV, 917 S.W .2d at 730–31.

247

Edgewood II, 804 S.W .2d at 500.

69

Since the Edgewood II decision in 1991, we have not found a violation of the financial

efficiency requirement. Since then, the system has used recapture among other mechanisms to

equalize funding.

In analyzing this issue, our prior decisions considered various metrics. In making

comparisons to prior decisions, we particularly focus today on ratios, because financial efficiency

turns not on absolute tax rates or levels of funding, but the relative differences between wealthier and

poorer districts that can be presented mathematically with ratios.

In Edgewood I, we found a financial efficiency violation, noting that property wealth per

student varied from $14 million in the richest district to $20,000 in the poorest, a ratio of 700; the

300,000 students in the wealthiest districts had over 25% of the State’s property wealth, while the

300,000 in the poorest districts had 3% of the property wealth, a ratio of about 8; the average

property wealth in the 100 wealthiest districts was more than 20 times the average property wealth

in the 100 poorest districts. Spending per student ranged from $19,333 to $2,112, a ratio of about

9; an average of $2,000 more per year was spent on each of the 150,000 students in the wealthiest

districts than was spent on the 150,000 students in the poorest districts. Local tax rates varied from

$1.55 to 9 cents, a ratio of about 17. The 100 poorest districts had an average tax rate of 74.5 cents,

while the 100 richest had an average tax rate of 47 cents, a ratio of about 1.6. The 100 richest

districts spent an average of $7,233 per student, while the 100 poorest spent $2,978, a ratio of about

2.4.248

248

777 S.W .2d at 392–93.

70

By contrast, in Edgewood IV, we held the financial efficiency requirement was satisfied.249

We noted that the tax rates required to achieve a general diffusion of knowledge were $1.31 for the

poorest 15% of districts and $1.22 for the richest 15%, a ratio of about 1.07.250 We noted that under

the recapture and guaranteed funding then available, wealthier districts could raise up to $28 per

weighted student, and all districts were guaranteed $20.55 per weighted student, for every cent raised

beyond the 86 cents required for Tier I funding, yielding a ratio of 1.36.251 We also noted that once

SB 7 was fully implemented, the richest 15% of districts would have a yield of $28.74 per penny of

tax effort, while the poorest 15% of districts would have $26.74,252 for a ratio of 1.07.

Similarly, in WOC II, we concluded that no violation of the financial efficiency requirement

was presented.253 Looking at property wealth per student (measured in WADA), the ratio of the

richest district over the poorest district had fallen to 200, compared to 700 in Edgewood I.254 We

compared “chapter 41” districts —property-rich districts subject to recapture—to “chapter 42

districts” that receive the recaptured funds. FSP revenue per student (measured by WADA) was

$5,457 for chapter 41 districts and $4,330 for chapter 42 districts, a ratio of 1.26. We noted that the

comparable figures at the time of Edgewood IV were $3,510 for chapter 41 districts and $3,005 for

249

917 S.W .2d at 731.

250

Id.

251

Id. at 728, 731.

252

Id. at 731 n.12.

253

176 S.W .3d at 792.

254

Id. at 756.

71

chapter 42 districts,255 a ratio of about 1.17. In WOC II, looking at districts in the top 5% and bottom

5% measured by property wealth, we observed that the revenue per student in WADA was $5,895

for the richest districts and $4,217 for the poorest,256 a ratio of about 1.4.

In today’s case, giving the Financial Efficiency Plaintiffs the benefit of the doubt and

assuming that all spending goes to providing a general diffusion of knowledge and must therefore

be considered in the financial efficiency determination,257 the current ratios are in the range of similar

ratios in Edgewood IV and WOC II that did not present a constitutional violation. The ratios are far

below those in Edgewood I where a constitutional violation was presented.

In FOFs 1265 and 1267, the trial court found, based on data from Edgewood ISD expert Dr.

Albert Cortez, that in 2011–12, measured by property wealth, the wealthiest decile of districts had

average M&O revenue per student in WADA of $7,097, while the poorest decile had average M&O

revenue per student in WADA of $5,654, a ratio of about 1.26. In 2012–13, the comparable figures

were $6,715 and $5,617, for a ratio of about 1.19. In 2013–14, according to a different expert, Dr.

255

Id. at 762.

256

The briefing indicates there is some confusion about this evidence from WOC II. Our review of the WOC

II record indicates that these numbers reflect actual spending based on tax rates the districts had chosen. The numbers

are weighted averages and were not limited to M&O revenues; they also included facilities funding.

257

TTSFC contends, for example, that “the evidence is clear that under the current system, funding for adequacy

is so low that there is no enrichment for a majority of districts.” Fort Bend says, “Even if districts taxed at the statutory

cap, the vast majority of districts cannot raise the money necessary to provide a general diffusion of knowledge.”

Edgewood says, “The reality, however, is that property-poor and even some property-wealthy districts rely on Tier II

funding to provide the minimum adequate education mandated by the Education Code.” Presumably, excluding any

revenues spent on optional enrichment from the calculation of ratios would decrease the ratios and indicate greater

financial efficiency, because rich districts have more funds for enrichment than poor districts.

72

Catherine Clark, comparable figures were $6,708 and $5,801, for a ratio of 1.16.258 Significantly,

these ratios are declining, indicating a trend toward more equal funding. Clark also calculated M&O

revenue per student in WADA for 2013–14, assuming that all districts taxed at the same rates of

$1.00, $1.04, and the maximum rate allowed (usually $1.17).259 The ratios come in at 1.11, 1.11, and

1.12.

A State expert, Dr. Lisa Dawn-Fisher, offered data that for 2013–14, the wealthiest 5% of

districts had a weighted average of $7,673 in M&O dollars per student in WADA while the poorest

5% had $5,797, for a ratio of 1.32. TTSFC refers us to calculations from its expert Dr. Wayne Pierce,

showing a slightly different ratio.260 It shows, for 2013–14, average M&O revenue per student in

WADA for the top and bottom 5% of districts at $8,146 and $5,737, for a ratio of 1.42.

258

Clark calculated weighted-average figures for 2013–14, using funding formulae and target revenue

calculations for 2013–14 and known 2012 M&O tax rates.

259

For these calculations, Clark did not use the same method she had previously used of assigning an equal

number of districts to each decile, so the calculations are not strictly comparable.

260

The differences between the Pierce and Dawn-Fisher numbers appear to be due to the way their exhibits

identify the top and bottom 5% and whether they use a weighted or simple average. As we understand the methods,

Dawn-Fisher took the number of districts— 51— comprising 5% of the total number of districts, and then calculated a

weighted-average revenue per W ADA figure for the richest and poorest 51 districts. The weighting adjusted for the

differing sizes of districts, by dividing the total revenue for the group by the total W ADA number. Pierce took the

number of poorest and richest districts needed to comprise approximately 5% of students measured by W ADA. So he

used 46 districts for the bottom 5% and 111 districts for the top 5%. He then calculated a simple average revenue number

for these districts, by adding up the separate per-W ADA funding for each district in the group, and then dividing by the

number of districts in the group. The parties dispute which method is better. The State and CCISD argue that Pierce was

the only expert out of six who did not use weighted averages, and that his simple averages are distorted by a few wealthy

districts with small numbers of students. We need not decide who has the better measure. We also note that some of the

numbers we discuss are based on projections. Pierce took data for one year and then applied “parameters” for the next

year “to demonstrate the effects of the 83rd Legislature,” which, for years after 2013, changed certain “funding

parameters” and “funding elements” such as “the basic allotment and the equalized wealth level and those sorts of

things.” Pierce and Dawn-Fisher, for example, used fiscal year 2013 as a “data year” and fiscal year 2014 as a “parameter

year” for some of their calculations.

73

All of these ratios are below or near the ratio of 1.4 for funding of the wealthiest versus the

poorest 5% of districts noted in WOC II. The WOC II ratio existed in a system found constitutionally

efficient. All of the ratios in today’s case are well below the spending ratios in Edgewood I, where

we held the system unconstitutional, such as the 2.4 ratio between the richest and poorest 100

districts, or the ratio of 9 between the highest and lowest-spending district.

Data from Dawn-Fisher shows that for 2011–12, total FSP revenue per student in WADA

was $7,318 for chapter 41 districts and $6,350 for chapter 42 districts, for a ratio of 1.15. The

comparable ratio was 1.11 for 2012–13, 1.08 for 2013–14, and 1.07 for 2014–15. These ratios are

below the ratio of 1.26 for chapter 41 versus chapter 42 districts in WOC II, and the ratio of 1.17 at

the time of Edgewood IV. And again, this data shows a trend toward greater equality of funding.

Plaintiffs’ expert Pierce also testified that the revenue gaps between wealthy and poor districts were

decreased by the actions of the 83rd Legislature. And as the trial court found, the Legislative Budget

Board has projected a decrease in revenue gaps as well, though the court thought the reductions were

insignificant.261

WOC II noted that “although 95% of public school funds are equalized through the FSP, 5%

are not.”262 The percentage of unequalized FSP M&O revenue (such as revenues from golden

pennies) has decreased from 8.2% in 2006 to 3.5% in 2013.

Looking again to FOFs 1265 and 1267, the trial court found that the average M&O tax rate

for the poorest decile was $1.11 in 2011–12 while the average rate for the wealthiest districts was

261

FOFs 1426–35.

262

176 S.W .3d at 791.

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$1.00, for a ratio of 1.11. The average tax rate for the poorest decile was $1.11 in 2012–13 while the

average rate for the wealthiest districts was $1.01, for a ratio of about 1.1. Dawn-Fisher offered data

that in 2012–13 the weighted average M&O tax rates for the bottom and top 15% of districts were

$1.10 and $1.04, for a ratio of 1.06. Pierce’s numbers came in at $1.097 and $1.026, for a ratio of

1.07. Pierce also offered combined M&O and I&S tax rates, finding a rate of $1.256 for the poorest

15% and $1.181 for the richest, for a ratio of 1.06. In Edgewood IV, a ratio of 1.07 applied to the tax

rates of the richest and poorest 15% of districts, and we upheld that system. The numbers in today’s

case are certainly in the same range for constitutional purposes. All of these ratios are well below

the ratio of 1.6 between the richest and poorest districts in Edgewood I, where we found a

constitutional violation.

The trial court found that property values per student in WADA ranged from $22,218 in

Boles ISD to $7,341,341 in Kenedy ISD,263 for a ratio of about 330. This compares to ratios of 200

in WOC II, where we found no constitutional violation, and 700 in Edgewood I, where we found a

violation. Suffice it to say that the ratio in today’s case remains huge. But this metric is of limited

value today because of recapture, a process intended to address this particular disparity. Recapture

did not exist at the time of Edgewood I, and other metrics, such as spending per weighted student,

incorporate the effect of recapture.

In considering ratios, we can finally look to measures of “yield,” that is, measures of how

much revenue a district can raise for each penny of tax effort. Such a measure numerically

263

FOF 1376.

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corresponds to our standard for financial efficiency in Edgewood I, requiring that “districts must

have substantially equal access to similar revenues per pupil at similar levels of tax effort.”264 In

Edgewood I, we described the tax rates and revenues per student of the richest and poorest 100

districts, indicating yields of 153.89 and 39.97. In other words, the richest districts could raise

$153.89 for each penny of tax effort, while the poorest could raise $39.97 for each penny,265 resulting

in a ratio of 3.85, meaning that the richest districts could raise 3.85 times the amount the poorest

could raise for each penny of tax effort. In Edgewood IV, we recited figures relating to two yield

ratios. We noted a ratio of 1.36 as the ratio of what the wealthiest districts could raise ($28.00 per

weighted student per penny of tax effort) over the yield guaranteed by SB 7 ($20.55).266 We also

noted that after full implementation of SB 7 the richest 15% of districts would have an average yield

per penny of tax effort of $28.74, while the poorest 15% would have an average yield of 26.74, for

a ratio of 1.07.267

The parties offered yield evidence in today’s case, including calculations by Dawn-Fisher,

a State expert, and Pierce, an expert for the Financial Efficiency Plaintiffs. Depending on the

methods used and the precise figures being measured,268 the yields vary considerably, but overall are

264

Edgewood I, 777 S.W .2d at 397.

265

See id. at 393 (describing the richest districts as spending an average of $7,233 per students at an average

tax rate of 47 cents, while the poorest spent an average of $2,978 at an average tax rate of 74.5 cents).

266

917 S.W .2d at 730–31.

267

Id. at 731 n.12.

268

As described supra note 260, there are numerous parameters that can be used in making these sorts of

calculations, and depending on the precise methods employed, the ultimate resulting ratios can vary.

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much closer to the constitutionally acceptable yields described in Edgewood IV than the

constitutionally unacceptable yields in Edgewood I.

Using 2013 data and 2014 legislative parameters, and considering actual tax rates, Dawn-

Fisher’s assessed the richest and poorest 10% of districts, with each group consisting of 102 districts,

inviting a comparison to Edgewood I’s richest and poorest 100 districts. She calculated weighted

average M&O yields of 66.30 for the richest 10% and 52.41 for the poorest, for a ratio of 1.265.

Looking to the richest and poorest 15% of districts yielded a ratio of 1.17. These ratios fall within

the ratios of 1.36 and 1.07 described in Edgewood IV, which considered the richest and poorest 15%

of districts, and are far below the ratio of 3.85 in Edgewood I, which considered the richest and

poorest 100 districts. Similar though not identical ratios can be derived from Pierce’s calculations,

which also considered 2013 actual tax rates and 2014 legislative parameters. Looking at the districts

comprising the top and bottom 15% of students, as was done in Edgewood IV, produced average

M&O yields of 72.85 and 51.94, for a ratio of 1.40. Pierce’s data showed a ratio of 1.56 for the top

and bottom 15% when Pierce combined M&O and I&S average revenues. These ratios are higher

than the ratios described in Edgewood IV (1.36 and 1.07) but still far below the 3.85 ratio in

Edgewood I.

The trial court made hundreds of fact findings on this issue, but many were inextricably and

in our view erroneously tied to its findings that the State had to spend at a higher level—the

adequacy estimates of experts Odden, Moak, and Baker—to achieve adequacy.269 For example, in

269

E.g., FOFs 1205–06, 1210–13, 1217–19, 1222–33, 1237–40, 1278, 1444–47.

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the course of its financial efficiency a

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