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Appeals Panel Seeks Alternatives to Tax Increases

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KANSAS CITY, MO.--A federal appeals court here hinted strongly last week that it would welcome alternatives that would allow it to avoid ruling on two controversial tax increases ordered by a lower court in the city's ongoing school-desegregation case.

During a March 21 hearing in the suit, the three-judge panel repeatedly questioned the seven lawyers arguing the case about possible options for funding local desegregation efforts other than the income- and property-tax increases ordered last fall by U.S. District Judge Russell G. Clark.

Four new parties--including the U.S. Justice Department, the State of Kansas, Jackson County, and a group of local taxpayers--joined the State of Missouri's appeal in the case to argue against Judge Clark's unusual action, which they say exceeded the powers granted the federal courts under the Constitution.

But lawyers for the Kansas City school district and a group of black parents also appeared eager to avoid the thorny constitutional issues created by Judge Clark's ruling, instead suggesting that the task of deciding how to pay for the plan be assigned directly to the state.

'Constitutional Confrontation'

"The only way to avoid a constitutional confrontation is to impose the burden of funding the plan on the state and let the state decide how to discharge it,'' said Arthur Benson 2nd, the lawyer for black parents who filed the case. Such action could, at least temporarily, saddle Missouri with the full cost of a court-ordered desegregation plan that is among the most extensive in the nation. The state is already responsible for more than half of the hundreds of millions of dollars that the plan is expected to cost in coming years.

It also "would make our job easier,'' said Judge Donald P. Lay, chief judge of the U.S. Court of Appeals for the Eighth Circuit and a member of the panel hearing the case.

Citing the need to remedy numerous constitutional violations, Judge Clark has issued a series of orders that require extensive renovations of nearly all of the district's schools, the creation of 50 magnet schools with enhancements to spur racial balance, and other components designed to redress decades of inferior education for black students.

The tax increases were ordered by Judge Clark after other efforts to raise the district's assigned share of the costs of the plan had proven unsuccessful.

Local voters have opposed every school bond and levy issue placed on the ballot during the past 19 years, including four rejections in the two years preceding imposition of the tax order.

Though nominally on opposing sides in the case, lawyers for the school district and black parents in the case have adopted very similar positions. They argued last week that current state laws prevent the district from raising its share of the revenue required to implement the plan.

"Frankly, it's obvious that if the state were otherwise going to have to pay the full amount, they would, in fact, take action'' to enable the district to raise its share of the plan's cost, said Allen R. Snyder, a Washington lawyer retained by the city school board.

Argument Divided

The state's appeals were divided by the court into two issues for oral argument: one addressing the specifics of Judge Clark's desegregation orders, and the second directed to concerns about his unusual order for funding the plan.

The lawyers for the state and the Justice Department centered their attack on the scope of the remedy, saying Judge Clark had approved a plan that was more expensive than is necessary to correct the constitutional deficiencies of the school system.

Both argued that the funding issues should have played a part in Judge Clark's consideration of the plan. And both suggested that he be ordered to rank the plan's components in terms of their priority and fund only those for which money is available.

Although eliminating the vestiges of discrimination "can always be addressed better and faster when you spend more money,'' the appeals panel need not choose between "everything or nothing that Judge Clark ordered,'' argued Roger Clegg, deputy assistant attorney general for civil rights in the Justice Department.

H. Bartow Farr 3rd, a Washington lawyer representing the state in the case, argued that by approving a remedy without considering its expense, Judge Clark "must have known he was leading to a constitutional confrontation.''

"By far the most reasonable way'' to settle the issue, Mr. Farr said, "is to look at the orders'' to see if there are less expensive ways "to do what the court is trying to do.''

'No More Extensive'

But Judge Gerald W. Heaney, another member of the appeals panel, commented that the plan approved in Kansas City is "no more extensive'' than that upheld by the Eighth Circuit Court in the St. Louis desegregation case. "It's just going about it in a different way,'' he noted.

"How can it be done? What is the alternative?,'' asked Judge Lay, repeating a theme that the judges frequently raised during the hearing.
Mr. Farr responded: "Once you have taken away consideration of [the scope of] the plan, there is no satisfactory answer.''

Under questioning by the judges, lawyers for the three other parties that joined the case to oppose the tax increase seemed willing to support a plan that would allow the state to determine the allocation of the tax burden, although the lawyer for the taxpayers group also expressed reservations about the scope of the plan.

The State of Kansas and Jackson County, which includes Kansas City, were permitted to join the case because some of their residents are taxed under Judge Clark's order.

Alternatives Broached

During the course of the arguments, various alternatives for funding the plan were put forth by both the judges and the lawyers, including declaring the state laws and state constitutional provisions that restrict the ability of the school district to raise revenues to be in violation of the federal Constitution.

The three-judge panel could avoid ruling on the constitutionality of the court-imposed tax increases by holding that Judge Clark had failed to exhaust all possible funding alternatives before imposing the order.

In earlier rulings in both the Kansas City and St. Louis desegregation cases, the Eighth Circuit Court has held that a judge could impose a tax increase as a "last resort'' to ensure that a constitutionally required desegregation plan be "fully funded.''

"The top priority for us is to get the remedy fully funded,'' Mr. Snyder, the district's lawyer, said. "We're not eager to embrace a court-ordered tax increase if there is another way of having the remedy fully funded.''

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