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Calif. Finance System Is Fulfilling Equity Obligation, Judge Finds

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Correspondent Robert Rudy in Palo Alto contributed to this report.


California has done as much as possible to reduce spending disparities between school districts and need not revamp its school-finance system, a Los Angeles Superior Court judge has ruled.

The decision in the case, known as Serrano III, came after several weeks of a "compliance hearing" to determine whether the state was meeting its obligation under earlier court orders to narrow the gap between wealthy and poor school districts. In 1976, the state supreme court overturned California's method of financing public schools, which was then based heavily on local property taxes, and gave the state six years to equalize--to within $100--the amount spent per pupil.

Judge Lester E. Olson, in an opinion issued on April 28, agreed with the state's contention that the "band" should be increased to $200 to account for inflation and, further, that he should limit his consideration to districts' "base revenue limit," which supports basic instruction and excludes most state-supported categorical programs and "add-ons" for such factors as sparsity, declining enrollment, and meal programs. About 93 percent of the pupils "are in schools receiving funds within a $100 band adjusted for inflation," Judge Olson said. The exceptions, such as the wealthy Beverly Hills district, do not constitute a "significant disparity," he said.

To require further "leveling down" of the highest-spending districts, he added, "would be reckless and doctrinaire, without producing any redeeming benefit for the rest of the state's pupils. ... Absolute equality is not possible from a practical standpoint, nor is it required by Serrano II."

"It is apparent," the judge wrote, "that a sincere effort has been made to raise the revenue levels of the low-spending districts without destroying formerly higher-spending districts by a mechanical leveling-down process." And since its enactment in 1978, he said, Proposition 13 has made property taxes such a minor factor in school funding as to eliminate "the most constitutionally offensive characteristic of the system, to wit, the absolute tie-in between school expenditures and property wealth." As a result of Proposition 13 and earlier orders in the long-running Serrano case, the state now contributes more than 80 percent of districts' budgets.

Disparities Are Intolerable

Lawyers for the Western Center on Law and Poverty, who represented the plaintiffs, said they will appeal the decision, contending that disparities of $300 per pupil are intolerable since the bulk of the money comes from the state and that consideration of categorical programs would have shown the disparities to be even greater.

Robin Johansen, one of the lawyers hired by the state department of education to fight the challenge, said, "We think the impact will be to allow the state to continue to pace equalizing school districts without having to worry about a sudden leveling-down that would be disastrous to a lot of districts."

Ms. Johansen also seemed confident that an appeal would fail. As with the original Serrano case, she said, the appeal is likely to bypass the district court of appeals and go straight to the state supreme court. "It's very important to have a good record from the trial court, as a first step, and [to have] a very bright judge," she said. "We had both."

The state board of education, as of late last week, had made no formal statement about the verdict, "other than that we're obviously pleased," said a spokesman for the department. Bill Honig, state superintendent of public instruction, pledged to continue narrowing the remaining gap between districts.

The original suit, Serrano v. Priest, was filed in the late 1960's by John Serrano Sr., a parent who contended that disparities in property-tax burdens and inequities in state aid meant that children in property-poor school districts were relegated to inferior schools. The original decision in Serrano, upheld by the state supreme court in 1974, held that California's system of financing public education was unconstitutional.

In 1976, the supreme court reaffirmed that decision and gave the legislature six years to equalize--to within $100--the amount spent on each pupil, regardless of where in the state he lived.

The plaintiffs returned to court late last year for what was informally called a compliance hearing. Despite huge leaps in the state contribution and the fact that Proposition 13 made disparities in property wealth virtually irrelevant, the plaintiffs contended that the state had not done enough to close the gap between high-spending dis-tricts such as Beverly Hills and poorer districts. In addition, they claimed that the legislature disbursed "bail-out" funds after Proposition 13 was enacted in 1978 in such a way as to exacerbate disparities.

System Is Still Inequitable

Serrano III set off a dispute among school-finance-reform researchers and advocates who typically sided with the plaintiffs in such cases. Several prominent academicians and educators, including Walter I. Garms, dean of the education school at the University of Rochester, Wilson C. Riles, former superintendent of public instruction, and Charles Benson and James W. Guthrie of the University of California at Berkeley, changed sides and testified on behalf of the state, contending that California had made admirable progress in light of its economic difficulties and that another upheaval would be counterproductive. Others, including John E. Coons of the University of California at Berkeley, whose theory of "fiscal neutrality" guided the original suit, argued on the plaintiffs' behalf that the system is still inequitable.

Judge Olson's opinion indicated that he was impressed by the state's ability to produce expert witnesses who had previously been on the plaintiffs' side.

"This court cannot ignore the fact," he wrote, "that certain experts of unchallenged integrity and accomplishment in the field of education, both in California and nationally, do now say that the present system is equitable."

In the view of Michael W. Kirst, a professor of education at Stanford University and a former president of the state board of education, the decision signifies the end of an era in school-finance philosophy.

"This signals a clear shift away from equity and toward efficiency and meeting economic competition from abroad," Mr. Kirst said.

He added that the decision may also provide a stimulus for California's rapidly growing school-foundation movement. Some have viewed the community-based foundations, which raise supplementary funds for public schools, as contrary to the equity mandate of Serrano I and II, on the grounds that wealthy communities are better able to provide such assistance, thus widening the disparity between rich and poor school districts. With the court's decision not to force further equalization, Mr. Kirst predicted, "It's full speed ahead" for the foundations.

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