Published Online: December 7, 2004
Published in Print: December 8, 2004, as States on Ropes in Finance Lawsuits

States on Ropes in Finance Lawsuits

After 15 years of litigation over whether states are adequately financing their K-12 schools, the momentum has tipped in favor of those who say they are not.

Of the six major judicial decisions in the past 18 months, advocates of increased school funding have won each time, dramatically changing the finance landscape in those states—and perhaps others.

See Also
See the accompanying chart, “School Finance Litigation.”

“It does feel to us when we have a major win, that just builds momentum,” said Molly A. Hunter, the director of legal research for the Advocacy Center for Children’s Educational Success with Standards. Known as ACCESS, the group is a national coalition of school finance lawyers, based in New York City.

“There’s sort of a bandwagon effect,” agreed Alfred A. Lindseth, an Atlanta-based lawyer with the firm Sutherland, Asbill & Brennan, who represents states in school finance litigation. “Courts are looking at what’s happening in other states, and they’re jumping on the bandwagon.”

Advocates for plaintiffs in school finance cases point to several factors behind their winning streak. For example, new data from standards-based reforms help them prove schools aren’t performing as well as they could. Meanwhile, emerging research is suggesting ways to improve student achievement.

Connecting Dots

Indeed, states are starting to collect more student-achievement data than ever, under state and federal programs designed to improve student achievement. The federal No Child Left Behind Act puts data collection at the forefront of efforts to ensure all students are proficient in reading and mathematics by 2014.

The data often show significant numbers of students from poor families struggling to meet states’ standards.

The 3-year-old federal law “is reinforcing the trend that the states are ultimately responsible for making sure there’s a rigorous education system in place,” said David G. Sciarra, the executive director of the Education Law Center, the Newark, N.J.-based group representing parents who successfully sued the state of New Jersey in Abbott v. Burke.

“The courts are saying: ‘Now that you’ve assumed the responsibility for the substance of education, you’ve got to make sure there are resources to support that,’ ” Mr. Sciarra said.

Further bolstering such cases is education research offering evidence that specific interventions help improve student test scores. That research includes studies on the positive effects of reducing class sizes in early grades, providing preschool programs, and ensuring students learn from highly qualified teachers.

Such studies give judges confidence that specific measures—whether they prescribe them or let state officials pick their strategies themselves—will yield results in the classroom, school finance plaintiffs say.

“The research has been more and more definitive, and it’s been a matter of getting it to the courts,” said Ms. Hunter of ACCESS, a project of the Campaign for Fiscal Equity, a New York City group that has successfully sued the state of New York over its school aid system.

“More cases will move forward with the same kinds of evidence,” she said.

What’s more, finance researchers are refining methods that estimate how much it would cost to operate programs that would help schools meet state student-achievement goals. Such scholars’ “adequacy” studies rely heavily on research about effective programs.

The studies also give judges a tool in ordering a remedy for inadequate resources. “It’s possible to talk about resource needs in a more objective way than in the past,” said Greg C. Malhoit, the director of the rural education finance center at the Rural Schools and Community Trust in Arlington, Va.

The combination of factors creates compelling cases for judges, Ms. Hunter said. “When you can put forward good solid evidence,” she said, “it makes sense for courts to connect the dots.”

States, though, still have arguments that could sway some courts, according to Mr. Lindseth, the Atlanta lawyer.

On student achievement, states can argue that state officials adopted challenging standards to give school leaders motivation to improve student achievement, Mr. Lindseth argues. That means that test scores tied to those standards shouldn’t be considered definitive barometers of students’ abilities.

“They were [adopted as] aspirational standards—things people were aspiring to,” Mr. Lindseth said. “In virtually every state, even in ones with high-quality school systems, large numbers of children don’t meet those standards.”

In rebutting claims made about research, Mr. Lindseth said state officials should question whether research based on small-scale pilot studies would be successfully replicated in statewide programs.

“If you look at California, which spent billions of dollars on [class-size reduction in the 1990s], it has had virtually no effect,” said Mr. Lindseth, who has represented New York, Florida, and other states in school finance litigation.

Winning Streak

School finance plaintiffs say their current streak started with the July 2003 decision by New York’s highest court.

In Campaign for Fiscal Equity v. State of New York, the New York Court of Appeals ruled after 10 years of litigation that the state doesn’t spend enough to provide New York City students the “sound, basic education” they are guaranteed under the state constitution. Late last week, a three-member referee panel recommended that the city needs an additional $5.6 billion a year to adequately fund schools there, or an increase of 45 percent. ("N.Y.C. Schools Require Billions, Judge Told," this issue.)

Since the 2003 ruling in the New York case, the state supreme courts in North Carolina and Montana have also ruled in favor of plaintiffs. Also during that period, trial judges in Massachusetts, Kansas, and Texas have sided with plaintiffs. Final rulings in those cases are still pending in state supreme courts.

With so many successful cases, plaintiffs get the opportunity to adopt legal strategies that have worked elsewhere.

“They feed off each other’s organization and look at what the other states did,” said Michael P. Griffith, a school finance policy analyst for the Education Commission of the States, a Denver-based clearinghouse on state policy.

Judges, too, look to other states.

“I recommend that the court follow the path that the New York Court of Appeals has recently chosen in a case concerning the adequacy of education provided in the New York City public schools,” Associate Justice Margot Botsford wrote in an April 26 report for the Supreme Judicial Court of Massachusetts.

The Massachusetts high court had assigned her to review evidence of whether the state had fully complied with a 1993 order to improve its schools and to recommend next steps.

Associate Justice Botsford, who sits in the Superior Judicial Court for Suffolk County, Mass., suggested that the state complete a study to see how much it would cost to provide an adequate education to Bay State students.

The justice also proposed that the high court set a deadline for the state to complete the work and advised the court to keep the case under a judge’s jurisdiction until the work was completed.

Equity to Adequacy

Plaintiffs’ success in adequacy-based school finance suits began with the 1989 Kentucky Supreme Court decision that declared the state’s school system unconstitutional and ordered the legislature to appropriate enough money “to provide each child in Kentucky an adequate education.”

The decision shifted the legal debate away from “equitable” funding, or money spread fairly among districts to “adequate” funding, or whether the state spends enough.

In the equity cases of the 1970s and 1980s, states prevailed almost two-thirds of the time. But in adequacy cases, Ms. Hunter said, plaintiffs have won 23 times in cases against 27 states.

But not all the news has been bad for defendants over the past year and a half, Mr. Lindseth said.

In Arizona and Nebraska, lower-court judges dismissed adequacy suits during pretrial motions. In Arizona, a judge declined to interfere with the legislature’s right to define what constitutes an adequate education.

“The legislative determination of what is adequate is given a lot of deference, as it should be,” said Mr. Lindseth.

In one of two cases pending in Nebraska, a judge dismissed the claim that the state is not adequately paying for its schools.

The Arizona and Nebraska cases have been appealed.

Although the cases represent setbacks to plaintiffs, Ms. Hunter said, the lawsuits won’t be finished until the states’ supreme courts rule. “These things go back and forth sometimes,” she said.

Several new decisions are expected in the coming year.

The Kansas Supreme Court is expected to rule on the adequacy suit in that state soon, perhaps as early as this month. The high courts in Massachusetts and Texas are also expected to rule in their states’ cases.

The New York judge overseeing theCampaign for Fiscal Equity’s case will soon issue an order explaining what the state has to do to comply with the 2003 decision.

Also in the next year, adequacy suits recently filed in Georgia and Missouri will start moving through the courts.

And in Kentucky—where the adequacy movement began—a state judge will hear arguments in a case brought by school districts alleging the state has not continued to finance schools adequately.

If plaintiffs continue to be successful, every state may eventually be facing an adequacy suit, said Mr. Griffith of the ECS.

“The question is: How far will the courts go?” he said.

To head off more court losses, he said, states might start adopting prescriptive programs that they believe will improve student achievement.

“They won’t just hand out the standards, but they will dictate how schools have to meet those standards,” Mr. Griffith speculated. “There’s been a reluctance in this country to do that, but you might see states do that. It’s one way of insulating yourself.”

Vol. 24, Issue 15, Pages 1,23

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