Donna Smith, the superintendent of El Paso's Clint school
district, told a judge in Austin Tuesday that her district has no room in the budget even to shave pennies.

The testimony came during the third week of the trial of the lawsuit challenging the state’s share-the-wealth school finance system.

Earlier Tuesday, attorneys for the state tried to discredit testimony from a Boston College researcher about the graduation rate from Texas schools.

Researcher Walter Haney testified Tuesday in Austin that the graduation rate from Texas schools is "woefully inadequate" and the state's method of counting dropouts is faulty.

Haney testified that many schools fail to meet the Texas Education
Agency's standard of 74 percent graduation to be considered
"acceptable."

Haney said he calculated the rates by comparing the number of
eighth-grade students to the number of graduates four years later,
using data provided by the Texas Education Agency.

He accounted for out-of-state migration using Census data.

But lawyers for the state said Texas education officials count
dropouts differently.

Haney has been a critic of the way Texas public education
accounts for its academic performance.

He said large districts that spend the most money per pupil
have the highest graduation rates, but said that over the last
20 years, black and Hispanic students haven't reached a 70-percent
graduation rate once.

Testimony continues Wednesday in Austin. The trial is in its third week.

Several hundred Texas school districts, rich and poor, have joined the lawsuit challenging the states school funding system.

At issue in the trial is the state’s so-called Robin Hood school finance system, which caps the rates districts can tax property.

The districts contend the cap amounts to an unconstitutional statewide property tax that still denies enough money to educate Texas children equally.

The current funding plan depends on property taxes to pay for school maintenance and operations costs.

Money from property-wealthy districts helps fund poorer districts.

The trial could last more than a month and whatever the final ruling decision is expected to be appealed to a higher court.

The Legislature, meanwhile, has yet to agree on reworked school finance plan even though most lawmakers say they want a new system that's equitable for all districts.

Property tax relief is another issue.

A first special legislative session on the issue failed.

Gov. Rick Perry could call another special session or let lawmakers take up the issue in the 2005 regular session, which begins in January.

Here are a few key numbers the lawyers will refer to during the trial:

Number of public school districts in Texas: 1,037.
Number of public school students in Texas: 4.3 million
Overall state and local portion Texas education budget: $28 billion
Percent from local property taxes: 62 percent
Percent of districts at the $1.50 property tax rate cap: 48 percent
Number of students educated in those at-the-cap districts: 2.3 million