Untitled Texas Attorney General Opinion, KP-0101

Rusk County levies a countywide equalization (ad valorem) tax originally approved by voters in 1940 and governed by former chapter 18 of the Texas Education Code (repealed 1995 but preserved for existing systems).
The Rusk County school board collects the tax and distributes proceeds to school districts in the county based on average daily attendance; some recipient districts cross county lines and serve students in neighboring counties.
The board performs no direct educational functions (it does not employ teachers or operate classrooms) and acts principally in a taxing/distribution role.
The question presented: whether use of county tax proceeds to support a district serving students in another county violates Texas Constitution art. VIII, § 1-e (which bars state ad valorem taxes).
The Attorney General analyzed whether the county equalization tax is effectively a "state" tax under the Texas Supreme Court’s framework from Edgewood III, which invalidated county education district taxes when the State so controlled levy, rate, and distribution that local discretion was illusory.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether county equalization tax is a "state" ad valorem tax under Tex. Const. art. VIII, § 1-e	The tax functions like the unconstitutional county education district tax in Edgewood III because proceeds subsidize districts across county lines and the board performs no educational duties	Chapter 18 grants the county board meaningful discretion (e.g., election to levy, setting rate within a statutory maximum, distribution procedures), so the tax is not wholly controlled by the State	A court would likely find former chapter 18’s county equalization tax not similarly infirm; it likely does not violate art. VIII, § 1-e because the taxing entity retains meaningful discretion

Carrollton-Farmers Branch Indep. Sch. Dist. v. Edgewood Indep. Sch. Dist., 826 S.W.2d 489 (Tex. 1992) (Edgewood III — held county education district ad valorem tax was effectively a state tax where the State controlled levy, rate, and distribution)
Edgewood Indep. Sch. Dist. v. Kirby, 804 S.W.2d 491 (Tex. 1991) (Edgewood II — prior decision addressing school-finance constitutional issues)