concurring and dissenting.
I join in all but Part IV of the Court’s opinion, and in the Court’s judgment denying relief to Edgewood Independent School District, et al, and Alvarado Independent School District, et al.
I agree with the Court that the public school finance system structured by the current law, Senate Bill 7,1 as implemented at the time of the district court’s judgment now on appeal, and taken as a whole, does not violate article VII, section 1 of the Texas Constitution. The Court makes clear, as I believe Edgewood I and II2 also did, that article VII, section 1 requires the Legislature to provide a basic education through a public school system, the benefits and burdens of which are fairly uniformly distributed throughout the state, but does not require the Legislature, as long as it has fully discharged this duty, to guarantee that whatever more may be spent on education by people in one area will be equally available to all.
I also agree with the Court that the evidence does not show that statutory provisions for funding school facilities cause the system as a whole to violate article VII, section 1. I doubt whether the constitutional standard of efficiency could be applied to one aspect of the public school finance system independently of all other aspects, but even if it could, the Constitution does not authorize it. Article VII, section 1 requires an “efficient system”. Disparities in funding facilities become constitutionally significant only when they affect the efficiency of the system as a whole. The question is not whether the method of funding facilities is inefficient, but whether that method makes the entire system inefficient. The answer, on this record, is no.
I disagree with the Court in two principal respects. First, I believe that the provisions of Senate Bill 7 which permit — in reality coerce — some school districts to pay the cost of education in other districts in lieu of forced consolidation of districts or property detachment violate article VII, section 3 of the Texas Constitution as construed in Love v. City of Dallas, 120 Tex. 351, 40 S.W.2d 20 (1931). This violation is not in my view fatal to the entire finance system; operation of the *493offending provisions could be enjoined without disturbing the remainder of Senate Bill 7, and I would do so even though the resulting system would be far different from the one now in place. Second, I believe the school finance laws still levy a state ad valorem tax in violation of article VIII, section 1-e, as the Court held they did in Edgewood III.3 This flaw is fatal to the system and would justify the same injunctive relief this Court granted in Edgewood III. Therefore, I need not reach the other arguments made by the petitioners referred to by the Court as “the property-rich districts”.
For these reasons, which I now explain more fully, I respectfully dissent.
I
If one set about to devise the ideal system for financing public schools in a major state at the end of the twentieth century, it is highly unlikely that Senate Bill 7 would be the result. Texas’ public school finance system is not the product of careful study and planning, but of historical anomalies and political pressures over the course of more than a century.
In Edgewood I this Court held that the system violated article VII, section 1 of the Texas Constitution, which states: “A general diffusion of knowledge being essential to the preservation of the liberties and rights of the people, it shall be the duty of the Legislature of the State to establish and make suitable provision for the support and maintenance of an efficient system of public free schools.” The Court concluded that the system did not meet the constitutional standard of efficiency because of gross disparities in tax burdens and funding throughout the state. The situation, briefly described, was this. The State did not have sufficient tax revenues to provide every student a basic education — in the Constitution’s words, “a general diffusion of knowledge” — without impairing its other responsibilities. To provide the necessary revenues, the State had for many years chosen to rely increasingly on local school district ad valorem taxes. Among the state’s more than 1,000 school districts, however, the student population and total value of taxable property per district varied enormously, so that in some districts a relatively low tax rate easily generated ample revenues to educate resident students, while in other districts even a relatively high tax rate failed to generate enough. The disparities were so great that the State could not eliminate them simply by directing its funds to districts with inadequate local revenues. The vast differences in tax rates and revenues from district to district, employed to provide a basic education, resulted in a motley system that was much more burdensome to taxpayers in some areas than others, adequate or inadequate here and there irrespective of the local tax burden, and thus on the whole inefficient.
Because these constitutional problems inhered in the very structure of the public school finance system and could not be corrected simply by reallocating available state funds, Edgewood I concluded, “the system itself must be changed.” 777 S.W.2d at 397. Although we left the method of rectifying the system to the Legislature, its options were relatively clear. One was to adopt an entirely new way of financing public schools, such as with vouchers. Although this proposal has been advocated by a number of legislators and others, and by parties to this case, it does not appear to have received serious consideration in the Legislature. Another option was to consolidate school district tax bases without consolidating the districts entirely, leaving their respective governments independent but providing a broader and more uniform source of ad valorem tax revenue. After Edgewood II, the Legislature attempted this by creating county education districts (“CEDs”), which we reviewed in Edgewood III. However, because the Legislature gave CEDs no meaningful discretion in exercising their taxing power, we held that the tax authorized was in effect a state ad valorem tax prohibited by article VIII, section 1-e of the Texas Constitution. 826 S.W.2d at 500-503. The Legislature did not attempt to repair these defects and aban*494doned this approach. A third option was for the Legislature to consolidate school districts to eliminate disparities in total taxable property and student population, and condition payment of state funds on a minimal level of local taxation, so that supplementation of ad valorem taxes with state funds would not be required for efficiency. The Legislature has been unwilling even to explore this course because of the political opposition to it.
The Legislature also had options which did not involve structural changes to the public school finance system. One was to propose an amendment to the Constitution to remove any impediment to the finance system it chose. It attempted this following Edgewood III, see Tex.S.J.Res. 7, 73rd Leg., R.S., 1993 Tex.Gen.Laws 5560, but the voters rejected the proposed amendment by a large margin. Another alternative was to lower the cost of a basic education by reducing bureaucratic and administrative expense so that existing state revenues would be sufficient for the necessary supplementation of local ad valo-rem taxes. No significant effort has been made to do this. Finally, the Legislature could find new sources of state revenue to supplement local ad valorem taxes in order to level disparities among school districts. One such source, a personal income tax, has been rejected by the Legislature and cannot now be adopted without approval of the voters in a statewide referendum. Tex.Const. art. VIII, § 24. The Legislature does not appear to have given serious consideration to increasing other tax revenues for education.
Today, despite the Court’s admonition that systemic change is essential, made in Edgewood I, 777 S.W.2d at 397, and repeated in Edgewood II, 804 S.W.2d at 496, and the Legislature’s three opportunities in as many years to comply with constitutional requirements, the basic system with its fundamental flaws remains intact. There are about as many school districts as there were before Edgeivood I, the disparities among them in taxable property per student are just as great, and the State has increased its reliance on local ad valorem taxes. It is a telling point that while the finance system had its defenders in each of the forms we reviewed in Edgewood I, Edgeivood II and Edgewood III, the only defender of Senate Bill 7 is the State.
Senate Bill 7 is among the most complex laws in Texas. Central to its operation is the following scheme. When fully implemented, the law prohibits a school district from having more than $280,000 in “taxable property” per “student”, Tex.Eduo.Code §§ 36.002(a), the latter terms being specially defined, id. §§ 11.86, 36.001. A district which has more than this may choose one of five options: (1) voluntary consolidation with another school district; (2) voluntary detachment of property from the district to be annexed to another district for tax purposes; (3) purchase of average daily attendance credits, the effect of which is simply to pay the State the difference between the district’s total tax revenue and the revenue that would have been generated had the tax base not exceeded $280,000 per student; (4) contracting to pay for the education of students not residing in the district, the effect of which is simply to pay the same difference in revenues to another district or districts; or (5) voluntary consolidation of the district’s tax' base with that of another district. Id. § 36.003. The last three options require voter approval each year. Id. §§ 36.096, 36.122, 36.152-.154. If a district does not exercise one of these options, the Commissioner of Education is required to detach certain property from the district until it has less than $280,000 per student, or if that cannot be done, to consolidate the district with one or more other districts until the same result is achieved. Id. § 36.004.
If involuntary detachment were used in every case, many districts would lose over half their property tax base. Voters would pay taxes in districts hundreds of miles from their residences. Involuntary consolidation could also result in schools far apart being included in noncontiguous districts. These possible consequences of Senate Bill 7, which no one disputes, can all be avoided, however, if the taxpayers in the nearly 100 districts with more than $280,000 property per student simply help pay to educate students in other districts. At the time of trial, not surprisingly, every “rich” district but one had “chosen” this course.
*495The “rich” districts argue that Senate Bill 7 violates eleven separate provisions of the Texas Constitution. While several of these challenges raise troublesome issues, I focus on the two clearest ones.
II
Two of the options Senate Bill 7 affords school districts to avoid forced consolidation or property detachment, §§ 36.003(3) & (4), permit school districts to spend local taxes to educate students outside their boundaries. While the Legislature has plenary power over the creation of school districts, it cannot authorize them to take action not allowed by the Constitution. Article VII, section 3 states in part:
the Legislature may also provide for the formation of school district [sic] by general laws ... and the Legislature shall be authorized to pass laws for the assessment and collection of taxes in all said districts and for the management and control of the public school or schools of such districts, ... and the Legislature may authorize an additional ad valorem tax to be levied and collected within all school districts heretofore formed or hereafter formed, for the further maintenance of public free schools, and for the erection and equipment of school buildings therein....
(Emphasis added.) The express language of this provision restricts the use of a district’s tax revenues to schools in the district.
Thus, construing this provision in Love v. City of Dallas, 120 Tex. 351, 40 S.W.2d 20 (1931), this Court held:
it is plain, we think, that the property and funds of the public schools are held in trust by the city, district, county, or other statutory agency, to be used for the benefit of the school children of the community or district in which the properties exist, or to which the school funds have been allocated. We think these properties and funds are so plainly and clearly impressed with a trust in favor of the local public schools of the city or district that they are within the protective claims of both the state and federal Constitutions, and that the Legislature is without power to devote them to any other purpose or to the use of any other beneficiary or beneficiaries.
Id. 40 S.W.2d at 26.
The State argued in Love that the Legislature’s power to create, abolish, and change the boundaries of school districts authorized it to impose obligations on districts to educate nonresident students. This is the very same argument the State makes now, and we clearly rejected it in Love. We said:
Since the Constitution, art. 7, § 3, contemplates that districts shall be organized and taxes levied for the education of scho-lastics within the districts, it is obvious that the education of nonresident scholas-tics is not within them ordinary functions as quasi-municipal corporations; and under the authorities cited the Legislature is without power to impose such an obligation on them, without just compensation. Aside from this rule, the necessary implication from the constitutional provision is that the Legislature cannot compel one district to construct buildings and levy taxes for the education of nonresident pupils. The Legislature, by section 3, art. 7, is only authorized to permit school districts to impose taxes for these purposes for schools within the district, and to say that the Legislature can compel a district to admit nonresidents without just compensation would be permitting that department to do indirectly what it admittedly cannot do directly.
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Since the Constitution does not permit the taxation of the people of a school district for the support of that district, except upon a vote of the people of the district, it is not debatable that the Legislature cannot compel one district to use its funds and properties for the education of scholastics from another district, without just compensation .... [W]here a school district has facilities and teachers in excess of those necessary for its own scholastics, the state has the power to require it to accept transfers from another district, but only upon the payment of reasonable compensation therefor.... The Legislature, however, is without power to compel any district to provide additional facilities, teachers, etc., *496for the education of scholastics from another district.
Id. 40 S.W.2d at 27, 29-30 (citations omitted).
In Edgewood II the State made the same argument and urged the Court to overturn Love. We refused, explaining:
On motion for rehearing, plaintiff-inter-venors request that we modify our opinion to overrule Love v. City of Dallas, 120 Tex. 351, 40 S.W.2d 20 (1931), or interpret that case “in a manner that would permit the [state-wide] recapture of local ad valorem revenues for purposes of equalization.” We believe Love is sound and decline to overrule or modify it. Moreover, the interpretation requested by plaintiff-interve-nors would violate the Texas Constitution ....
In Love, this Court held that the City of Dallas could not be compelled to educate students who resided outside of the city’s school district. We held that article VII, section 3 of our Constitution only “contemplates that districts shall be organized and taxes levied for the education of scholastics within the districts.” 120 Tex. at 367, 40 S.W.2d at 27. Focusing on the Legislature’s power to create school districts and define their taxing authority, we noted in this opinion that, consistent with Love and contrary to the district court’s suggestion, tax base consolidation could be achieved through the creation of new school districts. We said these school districts could be organized along county or other lines and could be given the authority to generate local property tax revenue for all of the other school districts within their boundaries.
Plaintiff-intervenors now urge us to go further. They argue that all school districts are mere creatures of the state, and “in reality, all taxes raised at the local level are indeed State taxes subject to statewide recapture for purposes of equalization.” Their position raises the question of whether the Legislature may constitutionally authorize school districts to generate and spend local taxes to enrich or supplement an efficient system. Because the Constitution does permit such enrichment, without equalization, local taxes cannot be considered “State taxes subject to statewide recapture.”
Our Constitution clearly recognizes the distinction between state and local taxes, and the latter are not mere creatures of the former. The provision that “[n]o State ad valorem taxes shall be levied upon any property in this State,” Tex. Const. ART. VIII, § 1-e, prohibits the Legislature from merely recharacterizing a local property tax as a “state tax.” Article VII, section 3, however, states that “the Legislature may authorize an additional ad valorem tax to be levied and collected within all school districts heretofore formed or hereafter formed, for the further maintenance of public free schools, and for the erection and equipment of school buildings therein.” Tex. Const, art. VII, § 3 (emphasis added). These constitutional provisions mandate that local tax revenue is not subject to state-wide recapture.
804 S.W.2d at 499 (footnote omitted).
To avoid the limitation of article VII, section 3, as we construed it in Love and Edge-wood II, the State makes two arguments. First, it contends that Love prohibits the State only from compelling school districts to educate nonresident students, not from permitting them to choose to do so. While it is true that Love refers repeatedly to legislative coercion, which was the complaint made in that case, its reasoning is not so cramped. Article VII, section 3, which is the basis of Love’s holding, is a limit, not on the Legislature’s treatment of school districts, but on the authority of the districts the Legislature can create. The Legislature cannot coerce school districts to spend their resources outside their boundaries, not because the Legislature cannot treat school districts that way, but because the districts are not authorized to spend their resources that way. In Love ⅛ words, the resources of a school district are held “in trust ... for the benefit of the school children in the community or district”. 40 S.W.2d at 26.
The State’s argument that Senate Bill 7 does not coerce districts to choose options (3) and (4) in section 36.003, but simply allows them those alternatives, can hardly be taken seriously. The Legislature is fully aware *497that school districts will avoid consolidation and permanent property detachment at virtually all costs. According to the record before us, only one district has yet chosen any option other than (3) or (4). Senate Bill 7 is coercive in reality, but even if it were not, it could not permit school districts to choose to do what the Constitution does not authorize them to do.
The fact that the voters of a district must approve option (3) or (4) is inconsequential. Senate Bill 7 is no less coercive to the voters of a district than to its governing board, and the voters have no more authority under article VII, section 3 than a district’s board has.
The second argument the State makes is that article VII, section 3, as construed by Love, does not prohibit school districts from spending funds outside their boundaries so long as they receive just compensation, and that even if Senate Bill 7 is coercive, the school districts which pay over funds to be used elsewhere receive just compensation by avoiding involuntary consolidation or property detachment. While the State’s reading of the Constitution is correct, its application is fairly cynical. What Senate Bill 7 says to school districts, in essence, is “share your revenues, or else”. Not suffering the “else”, the State argues, is just compensation for the sharing. To call this sort of extortion “compensation” is strained; to call it “just” is wrong.
The reasons why are obvious. Suppose, for example, the Legislature required school districts to choose between forced consolidation and payment of a portion of their revenues to finance the juvenile justice system, or state highway construction, or general state expenses. The first alternative arguably bears an indirect, albeit tenuous, relation to education; the other two bear no relation at all. The Court’s opinion would allow all three. Neither the purpose nor the language of article VII, section 3 can withstand the strain of a construction which empowers the Legislature to offer school districts a “choice” between helping to finance state highways and forced consolidation in order to “recapture” — -i.e., appropriate — local ad valo-rem taxes for state use. Moreover, this improper reading of one provisions affects others. Under article IX, section 1 of the Constitution, the Legislature can create counties, and it would follow from the Court’s holding in this case that the Legislature could afford a county the options of paving roads in a neighboring county or having its boundaries changed under article IX, section 2. The same proposition could be applied to municipal and other corporations which the Legislature has the power to create. It is no answer that the Legislature may appear unlikely to'use this power; Senate Bill 7 once seemed unlikely. No principle prevents the expedient which the Court employs to uphold Senate Bill 7 from being used in' many other contexts.
The State recognized in Edgewood II that Love prohibits a redistribution of local tax revenues among school districts. That is why the State urged the Court to modify or overrule Love. Reiterating the same argument now a third time, the State has finally achieved what Love and Edgewood II denied it in the plainest terms. The Court’s conclusion that article VII, section 3 gives a school district no right to insist that its tax revenues be spent to benefit its schools simply contradicts Love ⅛ language that local tax revenues are impressed with a “trust in favor of the local public schools ... within the protective claims of both the state and federal Constitutions”. 40 S.W.2d at 26. Limiting its discussion to districts’ rights, the Court simply ignores the limits on the authority of the Legislature and school districts under article VII, section 3. Love specifically holds that “the Legislature is without power” to obligate school districts to educate nonresidents without just compensation. Id. 40 S.W.2d at 27. In sum, school districts have both a right and a duty to devote local tax revenues to local schools, absent just compensation. Legislative threats are not, in my view, “just compensation”.
The Court suggests that a modified view of Love is necessary -if the Legislature is to fulfill its responsibility to provide for an efficient school finance system. This was, of course, the same argument the State made in Edgewood II, which the Court rejected. The argument has no merit since, as I have noted *498above, the State has a number of options open to it which do not violate article VII, section 3. The State’s difficulty in complying with sections 1 and 3 of article VII is due, not to a conundrum created by those provisions, but to the Legislature’s intransigence in making systemic changes.
I would hold that sections 36.003(3) and (4) of the Education Code and the sections which implement them, §§ 36.091-.096 and 36.121-.123, violate article VII, section 3 of the Constitution, and that their operation should be enjoined. While this would change the operation of Senate Bill 7 dramatically — so far every school district but one has chosen option (3) or (4) to avoid consolidation or detachment of property — the basic structure could continue to operate.
Ill
The $280,000 cap and the five options for meeting it have a single, transparent purpose: to force statewide redistribution of local ad valorem taxes. Having chosen not to alter district boundaries and to continue to rely upon local tax revenues for well over half the cost of public education, the State must find a way of spreading those revenues around in order to achieve the efficiency required by article VII, section 1 of the Constitution. The result, purely and simply, is a state ad valorem tax forbidden by article VIII, section 1-e. The State itself characterizes the effect of Senate Bill 7 on local tax revenues as “recapture”, which, as Justice Enoch observes, post at 485-86, suggests that the State considers local revenues to be state revenues that have been lost.
In Edgewood III, we stated the test for determining whether an ad valorem tax is a state tax:
An ad valorem tax is a state tax when it is imposed directly by the State or when the State so completely controls the levy, assessment and disbursement of revenue, either directly or indirectly, that the authority employed is without meaningful discretion. How far the State can go toward encouraging a local taxing authority to levy an ad valorem tax before the tax becomes a state tax is difficult to delineate. Clearly, if the State merely authorized a tax but left the decision whether to levy it entirely up to local authorities, to be approved by the voters if necessary, then the tax would not be a state tax. The local authority could freely choose whether to levy the tax or not. To the other extreme, if the State mandates the levy of a tax at a set rate and prescribes the distribution of the proceeds, the tax is a state tax, irrespective of whether the State acts in its own behalf or through an intermediary. Between these two extremes lies a spectrum of other possibilities. If the State required local authorities to levy an ad valorem tax but allowed them discretion on setting the rate and disbursing the proceeds, the State’s conduct might not violate article VIII, section 1-e. It is difficult, perhaps impossible, to define for every conceivable hypothetical precisely where along this continuum such taxes become state taxes_ Each case must necessarily turn on its own particulars.
826 S.W.2d at 502-503. Senate Bill 7 fails this test.
First, Senate Bill 7 controls local tax rates. While section 20.09(a) sets only a maximum rate of $1.50 per $100 valuation (subject to very narrow exceptions in sections 20.09(c)-(d) and in article 2784g and certain related special statutes in the Texas Education Code Auxiliary Laws, ante at 466, n. 15), school districts have no meaningful discretion as a practical matter to tax at any other rate. They will move immediately to the maximum rate, either out of desire to maximize the funds they receive from the State, or out of necessity to obtain funds essential to their present level of operation. The delay of a few years that some districts will have in reaching the maximum rate, due to limits on annual increases and the possibility of rollback elections, does not detract from the fact that Senate Bill 7 contemplates a uniform tax rate and allows no other result.
Both the district court and all parties acknowledge that every school district in Texas will move as quickly as possible to the maximum $1.50 rate because of the provisions of Senate Bill 7. The Court’s view of this is that while the statute “may encourage districts to tax at the maximum allowable rate, *499the State in no way requires them to do so.” Ante at 471. This view, and the. Court’s characterization of a district’s decision in these circumstances as “an exercise of discretion”, ante at 471, blinks reality. The local ad valorem tax rate in every school district would hardly be more certain if the Legislature simply prescribed it, as did Senate Bill 351,4 which we reviewed in Edgewood III. This is a factual matter about which there is absolutely no disagreement in this case.
Second, Senate Bill 7 controls the distribution of local tax revenues in excess of those allowed under the $280,000 cap. Payments to the State are reallocated to other districts according to specified formulae in order to help equalize school funds. The remitting district has no voice in this reallocation. The State’s control of redistributing local revenues is no different than it was under Senate Bill 351.
Under the test of Edgewood III, Senate Bill 7 levies a state ad valorem tax. A simpler test yields the same result: it operates no differently and has no other effect than a state ad valorem tax. Even the Court acknowledges that when the cost of a basic education approaches the revenue available at the maximum $1.50 rate, as the evidence indicates it will within a very few years at most, “the conclusion that the Legislature had set a statewide ad valorem tax would appear to be unavoidable”. Ante at 471. I agree with the Court that this conclusion is both imminent and inexorable. I disagree that the constitutional defect in Senate Bill 7 should be tolerated while we await the inevitable.
In Edgewood III, we observed: “The history of article VIII, section 1-e thus establishes that its framers and ratifiers specifically intended to eliminate the state ad valorem tax as a source of funds for public education.” 826 S.W.2d at 502. In my view, Senate Bill 7 transgresses the language and intent of the Constitution.
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For these reasons, I would hold that the public school finance system violates article VII, section 3 and article VIII, section 1-e of the Texas Constitution. Accordingly, I respectfully dissent.
. Act of May 28, 1993, 73rd Leg., R.S., ch. 347, 1993 Tex.Gen.Laws 1479.
. Edgewood Indep. Sch. Dist. v. Kirby, 777 S.W.2d 391 (Tex.1989) [Edgewood I]; Edgewood Indep. Sch. Dist. v. Kirby, 804 S.W.2d 491 (Tex.1991) [Edgewood I].
. Carrollton-Fanners Branch Indep. Sch. Dist. v. Edgewood Indep. Sch. Dist., 826 S.W.2d 489, 500-503 (Tex. 1992) [Edgewood III%],
. Act of April 11, 1991, 72nd Leg.R.S., ch. 20, 1991 Tex.Gen.Laws 381, amended by Act of May 27, 1991, 72nd Leg., R.S., ch. 391, 1991 Tex.Gen. Laws 1475.