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Published in Print: June 24, 1998, as Mich. Districts Chart Course After Spec. Ed. Rulings

Mich. Districts Chart Course After Spec. Ed. Rulings

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These are bittersweet days for the 84 Michigan districts that sued the state 18 years ago for failing to adequately fund its special education mandates.

On the bright side, the districts are now deciding how to spend the $211 million they received from the state this spring after finally winning the suit last July.

But last week, a state appeals court rejected their second lawsuit, which alleges that Michigan continues to underfund special education. That suit was filed May 14 and joined by more than two dozen other districts.

With an appeal pending, Michigan's debate over state special education funding appears far from over. In the meantime, the more immediate concern for the original plaintiffs is deciding how to spend the payments from last year's court order in Durant v. State of Michigan. ("Mich. Resolves Debate on Spec. Ed. Funding," Nov. 19, 1997.)

The only string attached to the one-time state payments, which ranged from $92,000 to $13 million, was that districts hold public hearings by this summer to get advice on plans for the money.

So far, the suggestions and the districts' individual responses have varied widely.

For example, the 18,000-student Livonia school system will share $2.2 million of its $10.2 million windfall to taxpayers through a one-year tax rollback.

Randy Liepa, the district's assistant superintendent for business, said voters in that community just west of Detroit passed a $2 million property-tax increase last year to repair two school pools and demolish an old building. The issue now is one of public trust because the district probably would not have sought the bond if the case had concluded sooner, he said.

"We just thought that it was appropriate to do this now with the money in," Mr. Liepa added. The average savings will be about $50.

The district's remaining $8 million will go into an interest-bearing account to upgrade technology as equipment becomes outdated.

Different Scenarios

The rural, 600-student AuGres-Sims district on the northeast corner of Saginaw Bay has a different challenge ahead.

It has lost three school bond votes since 1995. But, thanks to its $92,000 share of the state money, work is already under way on wiring its high school and elementary school for technology, Superintendent Dennis Wilson said.

"We were fortunate that the district stuck in there and stayed throughout the process," said Mr. Wilson, who was a high school senior in another district in Michigan when the original lawsuit was filed in 1980.

The Warren Consolidated schools in Troy is using its $9 million to build a sports stadium, construct a performing arts center, and move its central kitchen.

The projects will help catch up on maintenance that was neglected over the past several years, said Larry Malkowski, the associate superintendent of the 14,400-student district.

Not everyone is rushing to spend the state money, however. Several districts are squirreling away dollars for future expenses.

For example, the Birmingham district 15 miles north of Detroit is creating an endowment with its $5.7 million payment. The fund could earn between $300,000 to $350,000 a year for student programs, said Shirley Bryant, the spokeswoman for the 7,500-student district.

New Lawsuit

And despite the windfall, none of the original plaintiffs seems to be jumping for joy. As the districts see it, the money is only a part of what they would have received had the state paid its fair share of special education costs all along.

For example, the 12,800-student Rochester schools, about 20 miles north of Detroit, received $5.3 million from the case, which the district is setting aside for future one-time expenses. Superintendent John M. Schultz said his schools should have received $20 million.

Over the years, to compensate, "what we did is lower our standards for some things that the state should have paid for," he said.

And, believing that the state is again failing to pay a high enough ratio of special education costs, the district joined the second lawsuit.

So far, the courts have not been convinced. In a June 15 decision, the Michigan Court of Appeals said that the plaintiffs failed to specify just how badly they are being hurt by the state's funding practices.

In an interview, Dennis Pollard, the lead lawyer for the plaintiffs, said he was simply following the state supreme court's order from last July that future lawsuits address legal issues and not dollar amounts. "This is an aberration," Mr. Pollard said of this month's ruling. Statewide, he contended, special education was underfunded by $350 million in the 1997-98 school year.

"We're not going to stop," said Mr. Pollard, whose clients plan to appeal the ruling to the Michigan Supreme Court. "I have clients who understand the ups and downs of this. They're disappointed, but they understand."

But Republican Gov. John Engler, who was instrumental in winning money from the legislature to pay districts for past shortfalls, applauded the decision. In 10 years of payments beginning in the fall, the state will distribute $768 million to nearly 500 nonplaintiff districts for their special education costs in hopes of heading off future litigation.

"I am pleased with the court ruling," Mr. Engler said in a prepared statement. "Precious time and resources have been expended on this court case, at the districts' and taxpayers' expense."

Vol. 17, Issue 41, Pages 22,26

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