AUSTIN, Texas—The head of a key business lobbying group says poor schooling in Texas has left many of the state's firms without enough qualified applicants to fill job vacancies.

Bill Hammond is head of the Texas Association of Business.

His association has joined conservative activists and ex-state officeholders in arguing that pouring more state funding into public schools won't improve learning because the way Texas funds its schools is too inefficient.

Hammond testified Thursday during the school finance trial.

He said Texas businesses can't fill job vacancies because applicants lack basic academic skills—even after graduating from high school.

More than 600 school districts have sued the state, seeking additional funding.

But Hammond and the activists argue that more money is not as important as ensuring it is spent efficiently.