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Michigan Court Turns Back Finance Challenge

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Jackson, Mich--A lawsuit challenging the constitutionality of Michigan's school-financing formula was dismissed last week by a Jackson County circuit judge.

The suit was filed in May against the state of Michigan. Robert M. Grover, an attorney representing the 22 school districts that filed the suit, said the decision will be appealed.

The districts had charged that the state's formula for funding public education is un-constitutional because it is too dependent on local property taxes. Under the current system, the plaintiffs charged, districts with high property values or thriving industrial bases spend substantially more money on students' education than do districts with low property values and little industry.

Case Dismissed

But Judge Charles J. Falahee dismissed the case, citing a 1973 Michigan Supreme Court decision that upheld the formula's constitutionality. That 1973 decision was based on a ruling by the U.S. Supreme Court one year earlier, which found that a similar school-financing system in Texas did not violate the U.S. Constitution.

Judge Falahee said he "would welcome an appeal because of the importance of the question involved." The appeal is expected to be heard in the Michigan Supreme Court.

Robert Sedler, a Wayne State University law professor who is also representing the plaintiffs, said he will base the appeal on the grounds that the formula no longer succeeds in equalizing state aid as it did in 1973. "In 1973," he said, "the present formula produced no great differences in the amount of funds spent from one district to another. Today, you have enormous differences."

But Phillip E. Runkel, state superintendent of public instruction, said the formula is not to blame for inequalities.

"The problem is money," Mr. Runkel said. "We need to work together to solve the problem at the state legislative level. We need to get more money into the formula."

The formula, adopted in 1973, was designed to help middle- and low-income districts keep up financially with wealthier districts.

Values Fluctuated

But as property values fluctuated from district to district and Michigan's economy weakened, the amount of money available to middle- and low-income districts declined. As a result, the rich got richer and the poor got poorer.

"The system continues to discriminate against a large number of students," said William Bedell, superintendent of the 3,000-student Romulus district, one of the 22 plaintiffs. "I know some districts are able to spend more than double the $2,000 we get for each student."

Under the formula, each of the state's 529 school districts is guaranteed $360 per student plus $50.55 per student for each mill of tax approved by local voters. (One mill equals one dollar in tax for each $1,000 of assessed property value.)

If each mill levied raises less than $50.55 per student, the state makes up the difference. But rising property values have allowed some districts to raise significantly more than that amount. In the Detroit suburbs of Southfield, Bloomfield Hills, and Dearborn, for example, each mill of tax raises more than $100 per student.

Michigan's 1973 suit was filed by Gov. William G. Milliken and Attorney General Frank Kelley. In the current suit, Mr. Kelley's office is defending the formula.

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