Senator Eliot Shapleigh - El Paso, Texas

Texas schools will need an infusion of almost $5 billion in the next state budget to keep the state out of court, school finance experts said Tuesday.

Senators from the education and finance committees were told that the school finance deal that resolved a legal challenge in 2006 after three special legislative sessions has created constitutional problems of its own.

Under the 2006 deal, some school districts get much less money per student, through a combination of state funds and local property taxes, than others do.

The Pflugerville school district, for instance, gets $4,882 per student, neighboring Austin receives $5,746 and Round Rock takes in $5,604. Across the state, the amount ranges from less than $4,250 per student to more than $6,000 per student.

That kind of disparity raises the constitutional question of whether all Texas school districts have equal access to the money needed to educate their students, said lawyer David Thompson, who has argued some of the landmark school finance cases before the Texas Supreme Court.

Bringing all the districts to a floor of $5,000 per student would cost the state $1.8 billion, said Lynn Moak, a school finance consultant and expert on the system.

Pflugerville schools would have an additional $2.8 million to spend if that revenue floor were lifted, said David Andersen, the district's chief financial officer.

Any help would be welcomed because the current system has limited the district's ability to meet some educational goals, such as lowering class size, Andersen said.

Another concern, experts said, is that districts are locked in at the same per-student funding levels they had in either 2006 or 2007 even as a district's homeowners and businesses pay more because their property values increase. Lawmakers froze the levels as a short-term fix, but those levels now could remain in place until 2011, when another overhaul is expected.

"The Legislature has a duty to address the equity issue," said Senate Finance Committee Chairman Steve Ogden, R-Bryan. "If we don't start addressing the issue of equity, we're headed back to the courthouse."

Ogden said the state will have more money for public education — "not a lot but more" — when the Legislature meets next year to write the two-year, 2010-11 budget. But he questioned whether some of the $53 billion that is now going to public education could be spent in wiser ways.

Sen. Dan Patrick, R-Houston, said lifting the minimum revenue amount to $5,000 would help districts avoid raising their property tax rates. To offset the additional cost, he recommended using the $1.5 billion that the state has not had to send to districts because their local property values have increased.

Without additional money for school districts to deal with the rising cost of doing business, Thompson said, the current system could be vulnerable to the same constitutional issue at the heart of the 2005 Texas Supreme Court ruling — that local school boards lack control over the property tax rates they set.

School boards were supposed to have discretion to raise their tax rates from $1 per $100 of assessed property value to $1.04 without getting voter approval. That additional tax revenue was meant for "enrichment" purposes.

If districts are having to raise their tax rates simply to deal with inflation coming from such expenses as fuel and utilities, "you begin to raise the issue again of the state property tax," Thompson said.

Moak estimated that as much as $3 billion would be needed to give districts a 3 percent inflation adjustment for each year of the 2010-11 budget.

School districts' revenue per student

Taylor $4,669

Pflugerville $4,882

Del Valle $5,134

Austin $5,746

Eanes $5,911

Lago Vista $5,970