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Published in Print: January 17, 2007, as Justices Weigh Case on Impact Aid Involving 2 New Mexico Districts

Justices Weigh Case on Impact Aid Involving 2 New Mexico Districts

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The U.S. Supreme Court heard arguments last week in a lawsuit filed by two school districts in New Mexico that contend their state-aid payments are being unfairly reduced by the state under regulations for the federal impact-aid program.

The districts object to the methodology the U.S. secretary of education uses that ultimately determines whether districts eligible for impact aid for educating children who live on federal land or near federal installations get to keep the extra money. ("High Court to Hear Impact-Aid Case," Dec. 13, 2006.)

At issue in Zuni Public School District No. 89 v. Department of Education (Case No. 05-1508) is a provision of the federal Impact Aid Act that requires the secretary to administer a “disparity test” between districts to determine whether a state’s funding system is “equalized.”

If the disparity in per-pupil revenue between the state’s wealthiest and poorest districts, excluding the top and bottom 5 percent, is less than 25 percent, the system is deemed equalized, and the state can take impact-aid payments into account when calculating its own aid to districts.

The districts argue that the secretary’s formula for determining revenue disparities incorrectly identifies New Mexico as an equalized state because the formula contains an extraneous step that eliminates districts based on their attendance numbers. New Mexico reduced its state aid to the districts by 75 percent of their federal impact-aid payments.

The two districts, the 1,585-student Zuni Public School District No. 89 and the 13,000-student Gallup-McKinley County Public School District No. 1, received $8.1 million and $26.8 million, respectively, in federal impact aid in fiscal 2006.

The basic formula for eliminating the top and bottom 5 percent of districts from the calculation was first adopted in 1976 as a regulation by the Department of Health, Education, and Welfare. In 1994, Congress reauthorized the Impact Aid Act and adopted slightly different language. But in 1995, the districts contend, then-Secretary of Education Richard W. Riley adopted a regulation that resurrected the older method.

Under the methodology the districts say is mandated by the federal statute, New Mexico would not qualify as having an equalized finance system, and the state would not be able to reduce its aid to the districts by the amount of their federal impact aid.

Ronald J. VanAmberg, the lawyer for the New Mexico districts, told the justices during the Jan. 10 oral arguments that Alaska and Kansas are the only other states with equalized systems under the secretary’s formula. Those states would still be equalized under the two districts’ preferred formula, he said.

A Fair Reading

In an argument session that sometimes left members of the high court openly puzzled about the math concepts involved, the justices appeared more sympathetic to the school districts’ arguments, questioning lawyers for the Bush administration and New Mexico about whether Congress left enough ambiguity in the impact-aid statute to allow the secretary to adopt the 1995 formula.

Chief Justice John G. Roberts Jr.

“[Revenue] is only ‘per pupil’ when you’re dealing with an aggregation of the pupils,” Chief Justice John G. Roberts Jr. told Leigh M. Manasevit, a special assistant state attorney general arguing on behalf of New Mexico. “I would have thought a reference to per-pupil numbers suggests you’re grouping according to district.”

Justice Stephen G. Breyer seemed to agree with the chief justice in an exchange with Mr. VanAmberg.

“[Y]ou have to stretch the language, I suspect, in my view, to get to the government’s result,” he said.

The justices also appeared reluctant to accept the Bush administration’s argument that they should consider Congress’ intent behind the impact-aid law.

“What if I’m convinced that your opponent’s reading is really only the fair reading of the statute, but I’m also convinced by you that that’s not what Congress intended? What should I do?” Justice John Paul Stevens asked Sri Srinivasan, an assistant to the U.S. solicitor general, as the audience broke into laughter.

Chief Justice Roberts answered his colleague’s question a few moments later in a response to Mr. Srinivasan.

“I would have thought your office had answered that question in countless briefs where it tells us to be guided by the language of the statute and not some unexpressed intent,” he said.

Vol. 26, Issue 19, Page 23

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