States face education funding litigation

Some legislators chafe under court orders

In a controversial move, the Kansas Supreme Court in June ordered increased spending on the state’s education system. The decision resulted from a recent school finance equalization lawsuit that challenged the constitutionality of Kansas’ educational finance provisions — a suit typical of litigation occurring throughout the country.

A trend in school finance litigation has been emerging since 1990, a development chronicled this spring by education writer David J. Hoff. Hoff cited not just the recent case in Kansas, but lawsuits in Montana, New York and Texas.

School finance equalization litigation often leaves state legislatures and state courts tangled in legal questions over how much money school systems should be receiving in state budgets. In most cases, the lawsuits are hotly contested, since ensuring that all districts receive equal amounts of money will usually require a tax increase or a shift in state budget priorities away from other high-profile state services. Lawsuits that demand that courts adjudicate state constitutional language to unravel school finance controversies have begun to emerge — and re-emerge — in a number of states, and some plaintiffs are finding favor in court.

In fact, school equalization lawsuits have a history that begins before 1990. Georgetown professor Douglas Reed traces such lawsuits back to the 1973 U.S. Supreme Court case San Antonio Independent School District v. Rodriguez, in which the court established that educational finance inequities do not violate the 14th Amendment to the U.S. Constitution. This decision forced subsequent lawsuits to deal with school funding on a state-by-state basis.

Reed also found that by 1996, 27 state supreme courts had ruled on school financing suits under provisions of their state constitutions. Including the years since 1996, all but seven states have had some sort of school finance litigation pass through their court systems in recent decades, according to the Center for Policy Research at Syracuse University. The National Center for Education Statistics has catalogued at least 73 school finance cases since 1970 in as many as 40 states, including Michigan.

Kansas overhaul

In the Kansas case, Montoy v. State, the plaintiffs won a decision from the state Supreme Court that directed the state Legislature to "overhaul" how it pays for the Kansas public schools. The court’s decision hinged on a 2002 study commissioned by a Kansas state legislative committee in which the study’s authors contended that Kansas’ current system did not allocate enough money to meet its constitutional obligation to public education. Thus, the court issued a partial opinion in January that held that the Legislature had failed to meet the burden imposed by the Kansas Constitution, which states, "The legislature shall make suitable provision for finance of the educational interests of the state" (see nearby graphic). In June, when the court issued its full opinion, it noted that the Legislature had not yet adequately responded to the court’s earlier order.

The court’s decision in January stated specifically that it falls upon the Legislature, not the court, to come up with a solution — perhaps to address the state government’s argument that the ruling could breach the constitutional separation of powers between the judicial and legislative branches. In other portions of the court’s official opinion, it states that the decision will "require legislative action in the 2005 legislative session" and also stipulates, "It is clear increased funding will be required." If the Legislature does not comply, "Its failure to act in the face of this opinion would require this court to direct action to be taken to carry out that responsibility."

In response to the opinion, the Legislature has proposed a plan that allows districts to levy additional local property taxes — a policy still subject to court review. Hoff has reported, however, that an attorney for the plaintiffs in the Kansas case has suggested that these proposed changes will not be adequate to meet the constitutional requirement for a "suitable provision" of money. In a July special session, the Kansas Legislature passed a $148 million spending bill for education pending the court’s approval.

Nationwide litigation

Courts have recently ordered changes in other states as well. Montana may increase school spending by 7.5 percent in the next two years in an effort to comply with the 2004 Montana Supreme Court ruling Columbia Falls Elementary School District v. State, which pronounced the state’s funding of public schools deficient.

In the New York court case Campaign for Fiscal Equity v. State, the New York State Court of Appeals ordered the funding level to "reflect the cost of a sound basic education" — phraseology that refers to the state Constitution’s provision that, "The legislature shall provide for the maintenance and support of a system of free common schools, wherein all the children of this state may be educated." As a remedy, Justice Leland DeGrasse ordered additional operating monies of $5.63 billion per year — a 44 percent increase to the budget for New York City schools.

Similarly, in Texas the state Legislature has already begun reworking its school funding system to meet a judge’s order for $5 billion more in funding per year. Texas is reportedly pondering increases in payroll, sales and tobacco taxes to supplement the property taxes that currently finance the school system.

Snapshot of Select State Constitutions

As many as 40 states have been involved in school finance cases since 1970. Each state’s constitution is a little different when it comes to education. Here are some excerpts from the constitutions of four states currently facing education funding litigation:

Kansas: Article 6, Section 1: School and related institutions and activities.

The legislature shall provide for intellectual, educational, vocational and scientific improvement by establishing and maintaining public schools, educational institutions and related activities which may be organized in such manner as may be provided by law. ...

Article 6, Section 6: Finance. … The legislature shall make suitable provision for finance of the educational interests of the state. ...

Montana: Article X, Section 1: Educational goals and duties. (1) It is the goal of the people to establish a system of education which will develop the full educational potential of each person. … (3) The legislature shall provide a basic system of free quality public elementary and secondary schools. ...

Article X, Section 3: Public school fund inviolate. The public school fund shall forever remain inviolate, guaranteed by the state against loss or diversion.

New York: Article XI, Section 1: The legislature shall provide for the maintenance and support of a system of free common schools, wherein all the children of this state may be educated.

Texas: Article 7, Section 1: 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.

Select language from Michigan’s constitution:

Michigan: Article VIII, Section 1: Religion, morality and knowledge being necessary to good government and the happiness of mankind, schools and the means of education shall forever be encouraged.

Article VIII, Section 2: The legislature shall maintain and support a system of free public elementary and secondary schools as defined by law. ...

Article IX, Section 11: There shall be established a state school aid fund which shall be used exclusively for aid to school districts, higher education, and school employees’ retirement systems, as provided by law.

Coming to Michigan?

No school equalization case has been heard by the Michigan Supreme Court since 1984, when East Jackson Public Schools v. State was dismissed on grounds that school districts lacked the right to sue the state because they were creations of the state. The state Constitution does not have a provision that implies a certain level of education money is necessary, as the Kansas Constitution does in its requirement for a "suitable provision for finance."

The Michigan Constitution states in Article VIII that, "Schools and the means of education shall forever be encouraged" — a more general requirement that is often viewed as hortatory. Provision for the public education system is established in Section 2 of the same article with the clause, "The legislature shall maintain and support a system of free public elementary and secondary schools as defined by law."

The primary law to which this section currently refers is Public Act 451 of 1976. Part of this public act is the enabling legislation for Proposal A of 1994, which began increasing monies for lower-income school districts and slowly equalizing districts’ operational spending. Although the proposal has not provided equal funding among districts, it was crafted by its proponents as an attempt to pre-empt school equalization lawsuits of the kind currently seen in other states.

Drawing the line?

The equalization battles, however, appear likely to continue in other states. For example, according to the Lawrence (Kan.) Journal-World, some Republicans in the Kansas Senate are responding to the state Supreme Court’s order by proposing a revision of the Kansas Constitution to curtail the state Supreme Court’s ability to dictate education policy.

Other Kansas legislators are discussing noncompliance with the court’s order. The San Francisco Gate has quoted Kansas state Rep. Frank Miller as saying, "I think it’s high time we confronted the court," adding, "One thing we could do is just refuse to obey." The Gate even speculates that the Kansas schools may open late this year as a result of the dispute.

It is possible, then, that despite lengthy litigation, a state Supreme Court order could be the continuation — not the end — of school finance controversies.