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Texas meets deadline for school finance plan.

Up against a court deadline to design an equitable system of financing schools, Texas lawmakers approved a plan to reduce the disparity in taxable property value available to local school districts. The plan reduces the current 590:1 ratio in value between the richest and poorest to 29:1.

Texas has 1,048 school districts. Under this latest plan, 101 of the wealthiest districts will have to lower their taxable property to $280,000 per student, the excess to be transferred to poorer districts. (The state average is $143,701.) They can do this by: * Writing a check to the state. * Merging their tax base with a poor district. * Transferring property to the tax rolls of a poor district. * Consolidating with a poor district. * Educating students from a poor district.

If districts do not choose one of these options, the state education commissioner can order commercial taxable property to be moved from a wealthy district onto a poor district's tax roll. If that still doesn't reduce the taxable value to the specified level, the commissioner can order the wealthy district to be consolidated with a poor district.

Wealthy districts can get a bonus if they choose to write a check to the state, transfer property into a poor school district or educate nonresident students.

For three years they can maintain their 1992-93 level of funding per student provided they are willing to increase tax rates, ultimately, to the maximum allowed by law.

A coalition of poor school districts says it will challenge the bill. And rich districts are considering a class-action suit.

Rick Gray, a lawyer for 56 poor school districts, called the plan "the best foot forward on the road to equity that the Legislature has ever passed." But he added that it does not provide funds to build classrooms and would allow a $600 to $1,000 gap per student between richer and poorer districts.

In addition, opponents claim that the decision on how to distribute state aid in light of the Legislature's refusal to fully fund the bill makes the system less equitable, since poor school districts face significantly higher tax rates to maintain their current revenue than do wealthy districts.

"Poor school districts recognize fairness, and this isn't it," said Craig Foster, executive director of the Equity Center, a nonprofit research association that advises the poor school districts suing the state.

Three previous plans to end the 25 years of legal challenges over the way Texas funds its public schools have been ruled unconstitutional by the state's Supreme Court.

On May 1 voters rejected a plan to shift property tax money from wealthy districts to poor ones. If lawmakers had not met the June 1 deadline, state education aid would have been cut off, and some schools (the poor ones most reliant on state aid) might have had to close.

State leaders hope this newest plan will survive legal challenges. "I feel relieved," said Representative Libby Linebarger, chair of the House Public Education Committee. "I'm confident that it is going to pass court muster."
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Publication:State Legislatures
Date:Aug 1, 1993
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