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School-Finance System in Tenn. Is Struck Down

By Peter Schmidt — March 31, 1993 5 min read
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In a move expected to intensify, rather than resolve, Tennessee’s long-running battles over education funding, the state supreme court last week struck down the state’s school-finance system.

The court was unambiguous in its rejection of the financing system before it, concluding that the system violated the state constitution by short-changing small, rural districts.

The constitution “imposes upon the General Assembly the obligation to maintain and support a system of free public education that affords substantially equal educational opportunities to all students,’' the court held.

“Because such a small portion of state funding is allocated to equalization,’' the court ruled, “disparities in economic resources among the school districts in the state have resulted in great disparities in the amount of funds available for education in the various districts.’'

The impact of the ruling was unclear, however, because the state already has moved to replace the financing system addressed by the ruling. The court said little about the new funding system that is being put in place after being passed by the legislature last year.

Instead, the court sent the case back to the trial court of Davidson County Chancellor C. Allen High, who first heard the case five years ago, to determine whether the state has provided adequate remedies.

“I guess, what the bottom line is, we have to wait and see what the chancellor rules, how favorably he might rule on the new funding formula,’' Rep. Eugene E. Davidson, the chairman of the House education committee, told reporters last week.

In the meantime, the court’s decision has threatened to pit rural districts against urban districts, and legislative opponents of tax increases against those who argue that the state must come up with new money for schools--even if it means taking the politically risky step of implementing the state’s first income tax.

State: Job Already Done

Both sides were claiming victory last week in the wake of the court’s decision.

Commissioner of Education Charles E. Smith said Gov. Ned McWherter and the legislature “have already acted to put in place a new funding formula that would appear to do what the court says must happen.’'

A similar opinion was expressed by Attorney General Charles W. Burson, who told reporters at a briefing held after the decision that the state fulfilled the court’s mandate to provide “substantial equality’’ in education last year when it enacted its 21st Century Schools Program, which provided for a new funding formula to be phased in over five years.

“I am encouraged that the supreme court appears to be joining me and the legislature in addressing the basic education issues that are important to the children of Tennessee,’' Governor McWherter said in a written statement.

“While the lawyers have spent nearly five years arguing this case in the courthouse,’' Mr. McWherter said, “the General Assembly has had the foresight to move forward with education reforms that will provide a quality education program for a generation of Tennessee children.’'

“I am confident,’' the Governor added, “that these improvements will be noted by the court before this case is resolved.’'

Rural Districts Unappeased

Lewis R. Donelson, a lawyer representing the 77 small, mostly rural school systems that were plaintiffs in the case, last week maintained that state officials cannot fulfill their constitutional obligations with their plan to phase in the new funding formula.

“The state has passed a new formula, but they have not funded it,’' Mr. Donelson said, noting that the House and Senate currently remain at an impasse over a half-cent sales-tax increase that, he said, would pay less than a fourth of the additional costs of equitably funding schools under the new formula.

Moreover, Mr. Donelson added, “over 90 percent of the funding is still being given out under the old formula.’' As a result, he maintained, the school districts he represents have received “very little relief.’'

Mr. Donelson said he will ask Chancellor High to order the state to immediately provide full funding for schools under the new formula, at a cost of an additional $462 million in the coming fiscal year.

“We have been waiting too long already. We should not have to wait five more years,’' Mr. Donelson contended.

Bill Emerson, the chairman of the Tennessee Small School Systems, the organization that filed the suit, said the state’s failure to provide full funding for the new formula would produce “a Robin Hood effect,’' with urban districts losing needed funds to smaller, rural systems around the state.

In an effort to prevent this from happening, Mr. Emerson said his organization last week held a meeting with officials of all of the state’s school systems, including urban districts, to organize a push for full funding of the new formula.

Leaders of the Tennessee Education Association last week expressed support for that effort as well.

Even if the new formula is fully funded, Mr. Donelson said, the state’s new school-financing law will not pass constitutional muster on other grounds.

Moreover, Mr. Donelson said, the state has provided no funding to help compensate districts for years of being underfunded.

“We are so far behind in terms of science labs and language labs and computers that it would take a substantial one-time infusion of capital to get us anywhere near up to speed,’' Mr. Donelson said.

Legislative Deadlock

Attorney General Burson last week said he had no plans to appeal the supreme court’s ruling.

“I see no need for resort to the federal courts,’' he said. “The Tennessee supreme court has laid down the constitutional standard that must be met.’'

Quick state appeasement of the plaintiffs in the case appears unlikely, however.

The legislature last week remained deadlocked, and likely to convene a conference committee, over the extension of the additional half-cent sales tax, which generates $100 million for education but is due to expire in June.

The Senate voted overwhelmingly last month to extend the additional half-cent sales tax on a permanent basis.

But the House, in keeping with the Governor’s wishes, this month voted 67 to 30 to extend the half-cent sales tax for only three years.

Fully funding schools according to the new state formula, many legislators and lobbyists say, would likely take a substantial increase in sales taxes or the implementation of an income tax--something Tennessee residents have traditionally resisted.

A version of this article appeared in the March 31, 1993 edition of Education Week as School-Finance System in Tenn. Is Struck Down


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