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School, State Leaders Clash Over Funding Changes in Tenn.

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Contrary to state officials' claims, Tennessee has not already remedied inequities in the school-finance system struck down by the state supreme court, lawyers for a coalition of small, rural districts argued in court last week.

Lawyers for the districts that are challenging the state asked Davidson County Chancellor C. Allen High to declare that the school-finance system remains unconstitutionally inequitable despite recent changes in state law.

The supreme court last month rejected a school-finance system that Gov. Ned McWherter and the legislature had already moved to overhaul last year when they enacted the 21st Century Schools Program, which includes a new funding formula to be phased in over five years. (See Education Week, March 31, 1993.)

The court returned the case to Chancellor High's court to decide if the new system was constitutional.

Mr. McWherter and other state officials argue that the new school-financing system will correct the inequities cited by the supreme court when it said the old system was unfair to students in poor districts.

The lawyers for the plaintiffs argued, however, that, even if fully funded, the new formula would not put an end to the inequities in the school-finance system.

"The state here has fought this thing to the death,'' said Lewis R. Donelson, who represents the 77 districts in the coalition.

"I am afraid,'' Mr. Donelson said, "we are going to have to have another trial to determine whether they have done enough.''

Sales-Tax Switch

Following the supreme court's decision, Governor McWherter this month changed his position on the extension of a half-cent sales tax that generates $100 million for education, which was due to expire in June.

The Governor, with the backing of the House, originally advocated extending the tax for only three years. The Senate had voted for a permanent extension.

Following the court's decision, however, the Governor switched in favor of a permanent increase, and the House voted to go along.

Despite that decision, Governor McWherter and other state officials have maintained that no new state action is necessary to comply with the supreme court's ruling. The only real issue left, they say, is to decide how quickly the funding under the new formula should be phased in.

"I believe it would be irresponsible to release large sums of money to school systems without giving them a chance to develop a sound financial plan for using the money effectively,'' said Mr. McWherter, who questioned whether the districts would find good uses for the new money if given it all at once.

The plaintiffs want the new formula to be fully funded in the coming year, at an additional cost of $462 million. Districts "would have no trouble spending the additional money'' for badly needed supplies, they said in their motion last week.

New Formula Faulted

The new system "does not provide a substantially equal educational opportunity'' for all children in the state, the plaintiffs' motion asserts.

Much of the funding being generated by the half-cent sales-tax increase is going toward restoring prior budget cuts, the poor districts argued, adding that the goal of remedying inequities through the sales tax remains "a totally unrealistic dream.''

Although the state's new formula is "a major step toward equalizing funding,'' it is being used to allocate less than a tenth of the state's $1.25 billion budget for elementary and secondary education, the motion notes. Even when the new system is fully phased in, two-thirds of the state's funds will continue to be allocated under the old formula, it says.

The new finance law also leaves school funding "subject to the indifference of local officials,'' the motion contends, by giving local governments a substantial responsibility for funding without requiring them to set taxes above minimum levels.

The motion faults the new formula for offering little funding for poor districts to catch up with wealthier ones in terms of equipment and facilities.

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