Published Online: April 2, 1997


Justices Reject Ohio System of School Finance

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Ohio's system of financing its schools is unconstitutional, a 4-3 majority of the state supreme court ruled last week after months of deliberation.

The state's funding mechanisms failed to meet the "thorough and efficient" standard set for public schools in the Ohio Constitution, Justice Francis E. Sweeney Jr. declared in the majority opinion.

"By our decision today, we send a clear message to lawmakers: The time has come to fix the system," Justice Sweeney wrote. "Let there be no misunderstanding. Ohio's public school financing scheme must undergo a systematic overhaul."

The ruling gives the legislature one year to devise a new system for providing education aid for the state's 1.8 million public school children.

The justices sent the case back to a Perry County trial court, which overturned the system in 1994, to evaluate the legislature's actions. An appeals court had reversed the trial court's decision in 1995. ("Ohio High Court Hears Arguments in Finance Case," Oct. 2, 1996.)

The decree was cheered by the plaintiffs in the case, a coalition of 553 out of the state's 611 school districts, including rural, suburban, and urban districts--Columbus, Dayton, and Toledo among them.

"Everyone is a winner in Ohio today," said William L. Phillis, the executive director of the Ohio Coalition for Equity and Adequacy of School Funding, which filed the original lawsuit in 1991. "Even the politicians won because now they have an excuse to fix the system."

But Republican state officials expressed disappointment that the decision did not recognize state leaders' efforts in reducing the equity gap since the case was first filed.

"The point is that we're making great progress, and I think they failed to recognize that in the decision," Gov. George V. Voinovich said in an interview last week.

Gov. Voinovich also voiced concern that the court gave lawmakers no direction for creating a new system. "If they wanted to enter the thicket, they should have stayed in the thicket," he said.

'Thorough and Efficient'

Justice Sweeney, a Democrat, pointed out weaknesses in the formula used to provide state aid and charged that the legislature had thrust most of the responsibility to pay for education onto local districts.

"When a district falls short of the constitutional requirement that the system be thorough and efficient, it is the state's obligation to rectify it," wrote Justice Sweeney, who was joined by one other Democrat and two Republican justices.

Writing for the dissenters--all Republicans--Chief Justice Thomas Moyer agreed that significant deficiencies existed in some Ohio schools.

But, said Justice Moyer, in the absence of proof of a constitutional violation, "the fact that hard problems require hard solutions does not justify judicial second-guessing of the educational funding system established by the General Assembly."

The court did not instruct lawmakers on the legislation they should enact. Nevertheless, it noted that a "thorough and efficient" system would include "facilities in good repair and the supplies, materials, and funds necessary to maintain these facilities in a safe manner, in compliance with all local, state, and federal mandates."

Mr. Phillis said that his group planned to propose a remedy this week. But Republican leaders, reacting to the judgment, told reporters that they would need time to ponder appropriate actions.

A spokeswoman for the state education department said last week that all of the state's education operations, including its management of the Cleveland public schools, will proceed as usual until a new system is created and approved.

At a press conference a day after the ruling was handed down, Gov. Voinovich, Senate President Richard H. Finan, and Speaker of the House Jo Ann Davidson emphasized that the efforts the state had made since the case was filed toward improving the funding formula had resulted in considerable progress toward closing the equity gap.

The GOP leaders said that in 1991, the state guaranteed $2,636 for every pupil, and today it guarantees $3,500.

They also noted that last year per-pupil spending for nearly 73 percent of Ohio's districts fell within the $4,000 to $5,500 range. Of the remaining 27 percent of districts, they said, 166 of 168 districts were above that range.

Although the current formula is complicated, essentially it aims to provide more state aid to poorer districts and those located in high-cost areas.

Spending Wisely

The ruling brings good news as well as bad news, said Donald C. Berno, the president of the Ohio Public Expenditure Council, a Columbus-based nonpartisan economic-research organization.

On the one hand, he said, the decision provides an opportunity to simplify a complex and confusing state aid formula and to correct property-tax practices that contribute to inequities among school districts.

On the other hand, Mr. Berno said, the decision creates the possibility of a hefty state tax increase that would shift the burden from businesses to individual taxpayers.

Sam Staley, the vice president for research at the Buckeye Institute for Public Policy Solutions, a Dayton-based research group that seeks market-based solutions, said that the majority took a simplistic approach in assuming that more money would improve the schools.

"I'm disagreeing with the premise that spending drives educational outcomes," Mr. Staley said. "The point is, if we want better educational outcomes, we need to focus on how the resources are being spent."

Districts could make better spending choices, such as contracting out for services, and get more for their money, Mr. Staley argued. He pointed to urban districts that have some of the highest funding levels but have shown the worst academic performance.

Mr. Staley also predicted further litigation because of the "faulty" premise on which the majority ruled. "In 10 years, we're going to find ourselves back in court arguing about the same thing because conditions have not improved."

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