Law & Courts

School Finance Suits: More Than Just a Legal Roll of Dice?

By Daarel Burnette II — May 31, 2016 6 min read
Richard Gray, representing the Texas Taxpayer & Student Fairness Coalition, argues before the Texas Supreme Court in a lawsuit by more than 600 school districts challenging the state’s school finance formula. The court in May upheld the state’s funding, finding that it met “minimal” constitutional standards.

For district leaders, suing states over school finance formulas may seem like a high-stakes gamble on where judges will come down, as high-profile decisions with very different outcomes in Texas, Kansas, and Washington state suggest.

But in reality, the fate of these challenges is far from random, hinging instead on plaintiffs’ ability to prove that those formulas abide by the specifics—and ambiguities—of each state’s constitution, legal scholars say.

Both Kansas’ and Washington’s Supreme Courts ruled their school aid formulas unconstitutional, while the Texas high court said that its state formula met constitutional standards, and that the specifics of education funding were for the legislature to decide.

Such highly charged cases can set up fierce battles between courts and legislators, including proposals to strip courts of their authority over funding matters, calls for elected rather than appointed justices, and constitutional amendments addressing the school finance debate.

And the lawsuits highlight the knotty definitions of such terms as “suitable” and “efficient” education funding embedded in state constitutions.

Legal Landscape

In at least 23 states since 1950, judges have ruled that the state’s school finance formula was unconstitutional, according to Michael Rebell, a professor at Teachers College, Columbia University, who tracks such cases. In 17 other states, judges have found that the formulas passed constitutional muster or that it was not their role to figure that out.

“I think there’s a clash of cultures from the judicial perspective and the world from which politicians live,” said Richard E. Levy, a legal scholar at the University of Kansas who studies constitutional law. “Constitutional law is full of principles and following things to their logical conclusions. You find a constitutional deficiency and you fix it.

“But legislators don’t like being told that they have to come up with additional money, raise taxes, or cut programs,” he said. “It’s not desirable from a political point of view.”

Legislators increasingly argue that school funding formulas—complex calculations that delineate how many tax dollars are delivered each year to which districts—should be solely crafted by the legislature, and that judges are ill-equipped to scrutinize the academic impact of state aid formulas.

“I’ve seen what’s going on across the states, where judges are stepping in and trying to become the legislative branch and the school board,” said Tennessee Rep. Bill Dunn, a Republican who proposed a bill this year to change that state’s constitution so that judges can’t weigh in on the constitutionality of the state formula. The bill came in response to a lawsuit filed by several urban districts last year.

“School districts don’t have to make a case to the voters for more money,” Dunn said in criticizing finance lawsuits. “They just have to make it to one judge.”

New Approach

In 1973, the U.S. Supreme Court ruled in the case San Antonio Independent School District v. Rodriguez that school districts can’t challenge finance formulas under the equal-protection clause of the U.S. Constitution. Districts instead began arguing in state courts that aid formulas violated state constitutions’ equal-protection clauses, though those cases were rarely successful.

In 1979, Ohio’s Supreme Court determined in a funding-equity case brought by the Cincinnati board of education that the state’s formula would only violate the constitution if the district proved that it “was receiving so little local and state revenue that the students were effectively being deprived of educational opportunity.” (The state constitution requires “a thorough and efficient system of common schools throughout the state.”)

While Cincinnati’s board lost the case, other districts across the country saw an opening.

“People realized that that’s the argument they should be making,” said Michael Griffith, a policy analyst with the Education Commission of the States, who has studied state funding formulas. “It shouldn’t just be that ‘We’re equal,’ district leaders said. ‘It should be that we [as a district] have sufficient resources to fund an education.’ ”

The language on public school systems in state constitutions varies widely, but most of them guarantee children a “suitable” or “efficient” education. Districts have argued that those phrases should mean that districts have an adequate level of funding that’s allocated equitably among districts.

While those terms may seem ambiguous, districts have used a growing body of research and data collected in recent years to prove that funding formulas prevent school leaders from reaching legislatures’ own standards.

In Kansas, for a suit filed in 2010, lawyer Alan Rupe said he used the state’s academic standards and student-achievement gaps as measured by the state’s standardized tests to argue that the funding formula left poor districts without enough money to meet those standards.

Rupe’s argument in that case, Gannon v. Kansas, was bolstered by two studies, one of which was commissioned by the legislature, that determined that a “suitable” education in Kansas should cost around $6,000 per student. Using that calculation, he argued the state was about $400 million short in annual funding. In 2014, the state supreme court ruled the formula is inequitable. It soon will rule on whether it also is adequate.

“Basically, we beat the Kansas legislature with their own stick,” Rupe said.

Does Money Equal Success?

In 2012, Washington’s high court ruled in McLeary v. State of Washington that because the funding formula there disproportionately relied on local property taxes, the legislature had failed to make education a “paramount duty,” as the state constitution requires. The Washington court has fined its state legislature $100,000 a day until it comes up with a new aid formula.

In defending against finance cases, state attorneys general often argue that giving districts more money doesn’t equate to academic success.

The latest Texas funding lawsuit was first filed by several districts in 2011. Other districts later filed suit; eventually, more than half the state’s districts were combined into a single lawsuit, which wound up before the state supreme court.

In defending the state in that case, Texas Assistant Solicitor General Rance Craft argued that money alone can’t fix achievement gaps.

“Funding is no guarantee of better student outcomes,” Craft said during oral arguments last September. “Money is not pixie dust.”

In five of the seven previous cases brought before the state’s supreme court over the years regarding the constitutionality of the state’s funding formula—some of them stretching back decades districts had won. This time, however, the court determined that while there were certainly achievement gaps, and that the system required “top to bottom reform,” the aid formula met “minimal” constitutional standards.

“Our judicial responsibility is not to second-guess or micromanage Texas education policy or to issue edicts from on high increasing financial inputs in hopes of increasing educational outputs,” Texas Supreme Court Justice Don Willett wrote in his opinion.

And in a Florida case decided May 24, Circuit Judge George Reynolds came to a similar conclusion on a challenge to the constitutionality of that state’s finance formula. In his ruling, Reynolds said that “there is a not a constitutional lack of resources available in Florida schools.”

“That doesn’t mean that everything is perfect,” he wrote, “it simply means that there is not a constitutional-level crisis sufficient to warrant judicial intervention.” To Levy, the University of Kansas legal scholar, such rulings are the judges’ way of saying: “Enough is enough. This formula is close enough. We’ll take it. We’re going to wipe our hands of this process.”

Even if judges agree that a state’s funding formula is responsible for academic disparities, courts often don’t want to get involved in the process of determining what is constitutional.

“These cases don’t ever seem to end,” Levy said. “What would they do if the legislature says no? You can’t jail legislators, because they have legislative immunity.”

A version of this article appeared in the June 01, 2016 edition of Education Week as School Finance Suits: More Than Just a Legal Roll of the Dice?

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