Ten school districts have filed a lawsuit challenging North Dakota’s school finance system. The suit, Williston Public School District v. State, is based on both adequacy and equity grounds. It cites the results of a recently commissioned adequacy study, which concluded that the state needed to increase its spending on K-12 education by 31 percent. The state uses a foundation formula to distribute money to districts, with a foundation level of $2,623 in fiscal 2005. That figure is multiplied by a weighted student enrollment. The weighted enrollment includes adjustments for grade level, district size, alternative education, special education, English-language learners, and district sparsity. The state then deducts from the aid it provides to districts the revenue from a 36-mill property tax. The revenue generated from that deduction is reallocated to districts with below-average per-pupil spending and property values. The state does not have any taxes, fees, or lottery revenues earmarked for education. But 50 percent of North Dakota’s money from a multistate legal settlement with tobacco companies is dedicated to education.