## Facts

- Numerous Texas school districts, parents, students, and charter-school interests challenged the constitutionality of Texas’s public-school finance system after legislative funding changes in 2011 and 2013.
- Plaintiffs alleged the system was constitutionally inadequate and unsuitable, financially inefficient, and effectively compelled districts to impose a statewide ad valorem property tax through local tax-rate pressure.
- Plaintiffs also asserted subgroup-based inadequacy claims for economically disadvantaged and English-language-learner (ELL) students and challenged charter-school funding limits and the statutory cap on charter authorizations.
- After a lengthy bench trial, a Texas district court declared the system unconstitutional on multiple grounds, including inadequacy/unsuitability and inefficiency under the education clause and violation of the ban on a statewide ad valorem tax.
- The State defendants appealed directly to the Supreme Court of Texas.

## Issues

1. Whether the school-finance system provided a constitutionally “adequate” and “suitable” system of public free schools under the Texas Constitution’s education clause.
2. Whether the system was “financially efficient” as constitutionally required, notwithstanding complexity and interdistrict funding disparities.
3. Whether statutory tax structures and funding pressures eliminated districts’ meaningful discretion over local property-tax rates, creating a prohibited statewide ad valorem tax.
4. Whether the system was unconstitutional as applied to economically disadvantaged students or ELL students based on asserted outcome gaps and resource needs.
5. Whether differences in charter-school funding and statutory limits on charter authorizations rendered the overall system unconstitutional.

## Decision

- The Supreme Court of Texas reversed the trial court’s judgment and rendered judgment for the State.
- The Court held the finance system met minimum constitutional requirements for adequacy and suitability.
- The Court held the system was not constitutionally inefficient, despite acknowledged complexity and continuing disparities.
- The Court held the system did not create an unconstitutional statewide ad valorem tax because districts retained meaningful discretion over tax rates.
- The Court rejected subgroup-based claims for economically disadvantaged and ELL students, and rejected claims that charter funding differences or charter caps were unconstitutional.

## Legal Principles

- Courts evaluate school-finance challenges against constitutional minimum requirements; the Constitution does not require optimal funding or maximized academic outcomes.
- Policy flaws, complexity, and fiscal strain do not establish unconstitutionality unless the system clearly falls below the constitutional floor for providing a general diffusion of knowledge.
- Constitutional “efficiency” is not synonymous with economic or administrative efficiency; it focuses on whether the structure produces constitutionally intolerable disparities that undermine the statewide educational mandate.
- The prohibition on a statewide ad valorem tax turns on compulsion: a system is unconstitutional only if districts lack meaningful discretion to set tax rates; strong fiscal pressure alone is insufficient.
- Achievement gaps, standing alone, do not prove a constitutional violation for particular student groups absent proof that the statewide system fails to meet the constitutional minimum.

## Conclusion

The Texas Supreme Court upheld Texas’s public-school finance system against broad constitutional attacks, ruling that although the structure was widely criticized and open to legislative improvement, it satisfied the Texas Constitution’s minimum standards for adequacy, suitability, and efficiency and did not function as a prohibited statewide property tax.


Morath v. Tex. Taxpayer & Student Fairness Coal., 490 S.W.3d 826 (Tex. 2016)