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The Cleveland school board has filed suit asking state courts to overturn Ohio's school-finance system as unconstitutional and order that more equitable aid mechanisms be devised.

The suit, filed Jan. 3 in Cuyahoga County Common Pleas Court, claims that the state has created an inherently unequal financing system by shifting much of the burden of funding schools to districts with widely varying property-tax valuations.

current state foundation formula, the suit contends.

The suit says the state has compounded the funding inequities by freezing local tax revenues, by exempting some property from taxation, and by allowing counties, cities, and towns to give commercial and industrial property-tax abatements that shift more of the tax burden to local residents.

A bill giving school districts an advisory voice in municipal tax-abatement decisions was passed and signed into law last month. (See Education Week, Dec. 5, 1990.

Meanwhile, the legislature's Joint Select Education Committee has been holding hearings on the school-finance issue, and is expected to release a report later this month.

Gov. Guy Hunt of Alabama has announced a 3.72 percent cut in the state's education budget in an effort to trim $89.9 million from state aid spending.

Under state law, school salaries and benefits may not be prorated, so the belt-tightening will affect building maintenance, transportation, and instructional supplies, said Dean Argo, a spokesman for the state education department.

School transportation will be hit especially hard, Mr. Argo said, with the budget crunch following so closely on increases in fuel costs.

"Many school systems are going to have a hard time operating full bus schedules," he said.

A downturn in corporate income-tax revenue and $38 million in overHspending by the legislature made the cuts necessary, according to Charles Rowe, a state budget official.

Because the proration takes effect this month--rather than Oct. 1, at the beginning of the current fiscal year--local school systems will ef fectively have to cut 5 percent of their operating budgets for the next nine months to achieve the required savings, according to Mr. Argo.

State Superintendent of Education Wayne Teague had urged Gov ernor Hunt since October to declare a proration in order to give school systems time to plan the cuts, Mr. Argo noted.

A Kentucky circuit-court judge has issued a restraining or der delaying implementation of the anti-nepotism section of the state's 1990 school-reform law.5

Four local school-board members have challenged the provision of the law that disqualifies immedi4ate relatives of school employees from serving on district boards. The Jan. 4 ruling by a Frankfort judge will allow board members who are in violation of the law but who were elected or re-elected in November to serve until a court hears the case.

The state attorney general's office will not challenge the restraining order, according to a spokesman, who added that officials are eager for the case to move through the courts toward a final decision by the Kentucky Supreme Court.

The anti-nepotism provisions, which were opposed by the state's school-boards association, were written last year after the supreme court ruled the state's entire school system unconstitutional, citing, among other criticism, the politiciH zation of many local school boards.

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