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School-Finance Suit Filed in Tenn.

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A coalition of 66 rural Tennessee school districts has gone to court in an attempt to have the state's school-finance system struck down.

In papers filed with the chancery court in Nashville, the group--which calls itself the Tennessee Small School Systems--contends that the finance system unfairly favors districts located in urban and commercial areas, thus violating the state constitution.

"The thrust of the argument is that the school-funding system discriminates against poor, rural counties,'' said Lewis Donalson, the state finance commissioner under former Gov. Lamar Alexander and the lawyer representing the coalition.

Under the existing school-funding formula, the state establishes a minimum basic education cost and supplies funding for 92.5 percent of the expense. It requires local districts to generate the remaining 7.5 percent.

The formula allocates money based on average daily attendance, without regard to the local wealth of districts.

The coalition is also challenging a related law that requires that half of all locally collected sales-tax revenues be devoted to schools.

According to Mr. Donalson, in more populous counties the local levy can amount to $900 per student, compared with $100 per student in smaller counties.

Laws Abet Disparities

Mr. Donalson said that as a combined result of the existing aid formula and the local sales-tax law, wealthy districts are able to provide higher-quality education for their students.

For example, he said, such districts can afford lower student-teacher ratios and better equipment.

Mr. Donalson predicted that it could cost the state up to $400 million annually to equalize spending among districts.

Gov. Ned McWherter "hopes it can be a friendly lawsuit, illuminating the problem without setting counties against each other,'' according to Ken Renner, the Governor's spokesman.

Mr. Renner said legislative attempts to correct funding disparities failed in the last session because the proposal being considered would have required lawmakers to reduce aid for some districts in order to provide additional funding for others.

The Tennessee board of education also has been conducting a year-long study of ways to make the funding formula more equitable.

A hearing date has not been set in the case. --NM

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