Texas Supreme Court hears challenge to South Texas ISDtaxes over standing

The Texas Supreme Court heard arguments in Busey v. South Texas Independent School District (No. 240782), a suit in which 16 Willacy County taxpayers ask judges to block collection of a 5¢ per $100 ad valorem tax they contend was authorized only for a 1974 rehabilitation district and not for the general functions the district currently performs.

Petitioner counsel Heather Leon told the court, “This appeal concerns the standing of individual taxpayers in the Texas Public School District to raise constitutional challenges to a tax that was never authorized by the voters.” Leon said the 1974 election authorized a limited rehabilitation tax and that South Texas ISD now operates “almost as a magnet school for gifted and talented students,” with a special‑education enrollment she described as under 3–4 percent compared with typical Texas districts of 10–11 percent.

Leon also emphasized the financing disparity cited in the petition: “Willacy County taxpayers are paying a stunning $62,500 per pupil,” a figure the petitioner’s briefing attributes to students sent to South Texas ISD, while local students allegedly receive roughly $5,000 per pupil locally. Leon asked the court to enjoin collection for the 2025 tax year while the legal question of standing is resolved.

Respondent counsel Michael Gentry urged the court to dismiss the petitioners for lack of standing, saying the petitioners “lack standing because they cannot allege either an illegal expenditure or an illegal collection of taxpayer funds.” Gentry told the court petitioners had blurred illegal‑collection and illegal‑expenditure theories and that Texas precedent demands a strict showing to permit taxpayer suits that would disrupt government operations.

A major focus of oral argument was legal doctrine: whether petitioners fall within Texastaxpayer‑standing exceptions (illegal expenditure or illegal collection), or whether the claim is a classic Article III–style particularized injury. Counsel debated precedent cited by both sides, including Perez v. Turner, LaSalle Bank, Jones, Bland, and other state cases that the parties said define limits on judicial relief where political or reliance interests are implicated.

Gentry pointed to the 1974 special election order and to statutory provisions in the enabling statute (citing sections governing South Texas ISDpowers to acquire land, construct facilities and levy taxes) to argue the ballot language and statute do not impose an exclusive use or prohibition that would support an illegal‑expenditure claim. He also urged the court to respect legislative choices and noted political remedies — board action or a legislative change — remain available.

Justices pressed both sides on practical consequences. Several asked whether allowing these suits could spawn interlocal litigation and whether a successful injunction would materially disrupt the districtor simply shift funding reliance to state formulas. Leon acknowledged practical effects but argued the taxpayers had never been given a chance to vote on the tax in the manner petitioners contend is required. Gentry said Willacy County currently contributes about 2.8% of South Texas ISDtax revenue and argued that the alleged financial harm to the district does not justify broad judicial intervention.

Both sides discussed remedies and pleading options: petitioners said they would amend pleadings on remand to name individual board members if required; respondents stressed the courtshould avoid remedies that would upset settled expectations of lenders, other taxpayers, and the districtabsent a clear legal basis.

The court took the case under submission after closing remarks. No decision was announced at argument.