History of Public School Finance in Texas
1839 - The Education Act of 1839 provided public
lands to public schools.
1853 - San Antonio established the first comprehensive
free public school system in Texas.
1840-1861 - Legislation was passed establishing
a Permanent School Fund.
1869 - Texans adopted the Constitution of 1869.
Twenty five percent of the general revenue was to go to public
education and all sales of public land were for the Permanent
School Fund. Local school districts were required to provide school
buildings and a ten-month school year supported through local
1875 - Texas legislature voted to allow incorporated
towns and cities taxing authority for education purposes.
1876 - The new Texas constitution established a
permanent endowment, the Permanent School Fund, based largely
on the value of half the land in the public domain. The revenue
from this fund was divided to schools on a per student basis.
1877 - Payments were distributed at $3.59 per student.
Other sources of revenue for state education funding were available;
funds from the Permanent School fund were the only actual state
education expenditure until 1915.
1900 - All Texas students lived in 11,460 rural
1915 - The first attempt to equalize school funding.
The state legislature appropriated $1 million in school aid for
rural school districts that taxed the maximum legal rate.
1918 - The legislature established a state property
tax to pay for textbooks. The use of general revenue funds for
education was allowed during this time. To address a funding crisis,
Governor Hobby issued the first state general appropriation.
1949 - The Gilmer-Aikin Committee (formed by the
state legislature in 1947) proposed the establishment of a Minimum
Foundation Program (MFP). Eighty percent of the funding came from
the state and the rest of the funding was to come from the local
level. The ability for local school districts to fund above the
state level was allowed.
1965 - Governor John Connally appointed a committee
on public education.
1968 - The Governor’s Committee published
a report, The Challenge and the Chance. The report called
for a complete overhaul of public education in Texas, consolidation
of small school districts, a more comprehensive minimum foundation
program and increased state funding of public education.
1870 - 1970 - Texas school finance evolved. Through Bills
regulating local taxation for education purposes, state studies
determined the quality of public education in Texas. State aid
to rural education were all passed and/or amended many times during
1971 - The federal district court issued its opinion
in Rodriguez v. San Antonio ISD. The court ruled Texas’
method of funding public education to be in violation of the equal
protection clause of the Fourteenth amendment to the United States
Constitution. The court found that students in poor districts
received an inferior level of education compared to the students
who lived in wealthy school districts. The court also noted that
the tax rates in the poor school districts were frequently higher
than the rates in wealthy districts.
1973 - The decision was appealed to the United
States Supreme Court. The Supreme Court reversed the federal court's
opinion. The Supreme Court felt that the manner in which the state
chooses to fund education is a state decision and not a federal
1983 - Governor White appointed a Select Committee
on Public Education to investigate the status of public education
1984 - House Bill 72 was passed which included finance
1986 - Edgewood ISD v. Kirby was similar
to the Rodriguez case except that it alleged that the current
practices violated state law not federal law.
1987 - Judge Clark ruled that the Texas system of
financing schools is in violation of the Texas Equal Protection
Clause as well as other state constitutional provisions and laws.
Clark held that the students of Texas possess a “fundamental
right” to an education and that equality of access to funds
is the key and is one of the major requirements of this fundamental
right. As a result, Judge Clark found inequities in the wealth
of the local school districts. The district court judge ruled
the Texas system of financing public education to be unconstitutional
and that the current system will be set aside. The judge ordered
the state legislature to re-work the state’s funding system.
1988 - The case was appealed to the Court of Appeals
of the Third District of Texas. The Circuit Court of Appeals overturned
Judge Clark's’ opinion.
1989 - The Supreme Court overturned the ruling
of the Third Court of Appeals and sustained the original ruling
of the District Court by Judge Clark. The justices ruled that the
Texas funding system violated “fiscal neutrality and required
the state to provide the public school students of Texas sustainable
equal access to educational revenues.
1990 - In June, the Texas Legislature began a special
session to address the educational funding system. After four
special sessions and public outcry, Senate Bill 1 was passed.
In September, the Supreme Court of Texas ruled that the new funding
formula was unconstitutional.
1991 - In January, the Supreme Court of Texas ruled
unanimously in upholding the district courts unconstitutional
ruling on the Senate Bill 1 funding formula. It declared that the
plan did not address the deficiencies noted in Edgewood I.
Thereafter, the property poor districts filed for
a rehearing to overrule the 1931 Love v. City of Dallas decision,
stating that local property taxes could not be used to educate
students outside the district. Considered the Edgewood II decision,
The court refused to overrule Love, stating that tax base consolidation
could be achieved through the creation of new districts.
During this time, property-rich districts filed
a brief asking the court to clarify whether unequalized local
enrichment was still possible under the state constitution. Five
of the justices agreed that local school districts might supplement
education resources if the local property owners agree to pay
an additional property tax.
1992 - In January, the Texas Supreme Court declared
Senate Bill 351 unconstitutional in the Carrollton-Farmers Branch
ISD v. Edgewood ISD case, considered Edgewood III. The problem
was that the county education districts violated constitutional
provisions requiring local voter approval of local property taxes
and prohibiting a state property tax.
1993 - The legislature passed Senate Bill 7. The
law required school districts above a certain wealth level by
transferring wealth to poorer school districts. This was considered
the “Robinhood” plan.
1994 - The Texas Supreme Court upheld Senate Bill
7 as constitutional.
2002 - TASA/TASB address school finance in Texas
2003 - The legislature "sunsets or investigates" the school finance
code. It establishes education finance as the top priority for
the state. It repeals Chapters 41, 42, and 46 of the Texas Education
Code as of September 1, 2005. It ensures that no later than September
1, 2005, the Texas Legislature will have replaced the current
funding system.Currently, it is still being debated in the senate and the house. The governor and other legislative leaders are talking about having a special session in the summer or fall of 2003.
Kemerer F. & Walsh J. (2000) The Educator’s Guide to
Texas School Law. Fifth Edition.
Austin TX: The University of Texas Press.
Odden, A. R. & Picus, L. O. (2000) School Finance: A Policy
Edition. New York, NY: McGraw-Hill.
Vornberg, J.A. (1996).Texas Public School Organization
and Administration: 1996.
Dubuque, Iowa: Kendall/Hunt Publishing Company.
Questions? Danna Diaz BoricuainAustin@aol.com, Enrique Aleman firstname.lastname@example.org, Sheila Guzman email@example.com