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Alabama Judge Extends Deadline for Finance Reform

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An Alabama judge has agreed to extend a Sept. 30 deadline for school-finance reform that he had set last year, after he declared the state's system unconstitutional.

In approving an agreement worked out last month between state officials and the plaintiffs in the state's ongoing school-finance lawsuit, Montgomery County Circuit Court Judge Eugene W. Reese also accepted a one-year compromise plan to distribute a small portion of the state's education budget in a way that reduces financial disparities between school districts.

The state now has until March 15, 1995, to enact a new funding system. After that date, plaintiffs could ask that money be immediately shifted from richer districts to poorer ones.

Under the compromise approved by Judge Reese on Aug. 17, slightly less than $80 million of this year's school funding will be placed in an "equity pool." It will be distributed under a formula that benefits districts with relatively low property wealth--about 100 of the state's 128 districts.

However, most of the state's $1.9 billion K-12 education budget will be distributed under the current formula, which is essentially based on enrollment.

Plaintiffs and their lawyers had argued that $300 million to $500 million should be earmarked for equalization this year.

"Eighty million dollars as an equity pool in this state is just dreadfully inadequate," said DeWayne Key, a former Lawrence County school superintendent who was one of the original plaintiffs.

But teachers' contracts went into effect in mid-summer, schools opened at the end of last month, and the Oct. 1 start of a new fiscal year was looming. Bowing to these pressures, both sides agreed that $80 million was the most they could devote to equalization now without disrupting school budgets.

C.C. (Bo) Torbert, a lawyer representing poor school districts in the lawsuit, said it was significant to even establish the "principle" of equity funding, "which this state has not seen since 1935."

Legislative Stalemate

Last year, Judge Reese ruled that the state's policies had resulted in unconstitutionally unequal educational opportunity and that Alabama schools provide an inadequate education over all.

But the state legislature failed to enact finance reforms in either its regular session or a special session. Lawmakers did set aside $1.75 billion--most of the state's K-12 education budget--in a so-called "equity pool." But they did not decide how to distribute it.

The remaining $150 million goes to pay for textbooks and other items.

This summer, the state board of education voted to allocate the "equity pool" based on enrollment counts and to remove some earmarked spending in an effort to make the result more equitable. (See Education Week, Aug. 3, 1994.)

The plaintiffs objected, and the two sides met with a mediator to forge a compromise.

All school districts were guaranteed at least as much money for this year as they got last year, as well as any additional money they would need to meet new state mandates, such as an 8.5 percent pay raise for teachers.

But wealthy districts that would have received a sweeter deal under the state board's plan would lose those extra funds to the new $80 million "equity pool." That money will be distributed based on how much money each district can raise per pupil at a given property-tax rate.

Both sides in the lawsuit view the plan as a stop-gap measure to distribute money until a new state legislature convenes next year.

Buying Time

Thomas Stewart, the lawyer representing Gov. James E. Folsom Jr. in the case, said the state did not have the time or money to meet the original deadline.

"But for the extension, we were in the position of trying to address both equity and adequacy with limited funds, and it is very difficult to do that," Mr. Stewart said.

The judge had earlier extended to Dec. 6 a separate June deadline for producing plans to improve the quality of education in the state.

Election-year fear about raising taxes was an important factor in this year's legislative inaction. However, plaintiffs and defendants agree on the need for reform, and both said last week that more state revenue would be needed.

"The dollars in the equity pool were not viewed as a remedy but as a step in the direction of a remedy," said Thomas E. Ingram Jr., the deputy superintendent of the state department of education.

Lawyers for the plaintiffs said they were pleased that the new deadline was set in March, noting that the threat of a disruption in the current school year may put extra pressure on lawmakers.

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