SCHOOL FUNDING LAWS CHALLENGED

The Texas Supreme Court has signaled that it may overturn the legislature's second school-funding law. If that happens, every school district in the state will be critically short of funds.The situation is so grave that Gov. Ann Richards took the unprecedented step of writing to the supreme court to remind its members what's at stake. Until 1989, Texas schools were funded in part by state revenue and in part by property taxes from within their districts. That system was challenged by a "property poor" district, which had to assess a much higher tax rate for the far fewer dollars it collected from property in its district than did "property rich" districts. The state supreme court threw that system out last year, calling instead for a "fiscally neutral" system that gave schools equal resources. So the legislature passed a law that would have ensured that all districts received the same revenue as one in the 95th percentile of wealth. Not good enough, the high court ruled last January. So the legislature tried creating a two-tier property tax: part for existing school districts and part to be used to equalize funding in a county-wide (or larger) education district. Wealthy school districts objected to this system, and their challenge now rests with the state supreme court.