Education Funding

School Finance System Upheld by Ohio Court

By Alan Richard — September 12, 2001 8 min read
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Ohio’s decade-long court battle to find a constitutional way of paying for its schools may finally have reached its end. But the end of one era may usher in a time of fiery political debate as the economy sours and the public demands more for the 1.8 million students in the state’s public schools.

Three months after the legislature passed major budget increases for schools, a divided Ohio Supreme Court last week upheld the state’s method of financing schools, but ordered lawmakers to infuse more money into that system. The court had twice struck down the funding system as unconstitutionalfirst in 1997 and then again last yearand directed the legislature to fix it.

Writing for the majority in last week’s ruling, Chief Justice Thomas J. Moyer, a former school board president in Columbus, said none of the seven judges fully agreed with the opinion. But he argued that the court’s 4-3 compromise would advance a greater purpose.

“We have concluded that no one is served by continued uncertainty and fractious debate. In that spirit, we have created the consensus that should terminate the role of this court in the dispute,” he wrote in an opinion made public on Sept. 6.

The chief justice lauded Gov. Bob Taft, a Republican, and the GOP-controlled legislature for approving a measure in June to increase state spending on public education by $1.4 billion over two years. He also praised state leaders for setting aside billions of dollars for school repairs and construction since the 1997 ruling.

Chief Justice Moyer added that the court’s blessing came with conditions. The court ordered the legislature to raise minimum spending for each student in Ohio by more than $300, to $5,145, but set no deadline for when that level must be reached. It also required the state to speed up implementation of a newly created type of state funding, known as parity aid, which is designed to increase spending in poor districts. Under the ruling, that extra funding must be fully phased in by fiscal 2003-04—two years earlier than lawmakers agreed during their recent legislative session. (“Ohio Crafts Education Overhaul as Court Deadline Nears,” June 6, 2001.)

The majority opinion seems to run counter to the 1997 and 2000 decisions, which directed the legislature to steer Ohio away from its dependence on property taxes to pay for schools. In last week’s ruling, Chief Justice Moyer wrote that using property taxes “is unconstitutional only if the disparity is so dramatic that children in the poorest of our school districts are deprived of a basic educational opportunity.”

In a sharply worded dissenting opinion, Justice Alice Robie Resnick said the court had no business dictating how much money legislators should earmark for schools.

“The majority places too much importance on political expedience and not nearly enough on justice,” she wrote. “When the majority proclaims what is essentially a victory for the state in this case, it is actually knelling defeat for the students and citizens of Ohio.”

Political Fallout

The decision, which the court expects to end the DeRolph v. State of Ohio lawsuit filed in 1991, bodes well for Gov. Taft, who faces re-election next year.

“After a decade of litigation and divisiveness, it is heartening to see the court trusts that the state has acted, and will continue to act, in good faith to provide a quality education to prepare the children of Ohio for a prosperous, productive future,” the governor said last week.

State Superintendent of Education Susan Tave Zelman called for both political parties to continue work on how the state pays for schools. She pushed for more money, and for calm, as political debate ensues on complying with the court’s decision.

“The court has given the state the blueprint for the school funding solution. The price of that solution is yet to be determined,” she said. “Now we need to make sure Ohio’s education stakeholders work together to lessen the antagonisms that have too often prevented us from identifying and adopting solutions.”

Paying for the remedy required by the court would add about $800 million to the state’s biennial budget, said Warren Russell, the director of legislative services for the Ohio School Boards Association, adding that he hoped the legislature would come up with the money soon.

But Sen. Richard H. Finan, the president of the Ohio Senate, raised doubts about how much the legislature would do, emphatically maintaining last week that his chamber would not vote to raise taxes based on the decision. He estimated that complying with the ruling would require as much as $1.2 billion.

“We had a very painful budget process earlier this year, and we have a tight budget as it is,” said Lisa Peterson, a spokeswoman for the Senate’s GOP leadership. “Senator Finan is concerned about the hurdles of providing the additional funds.”

Those words scared William L. Phillis, whose group first filed the lawsuit 10 years ago on behalf of Dale DeRolph and his son, Nathan, who sought better schools in rural Perry County.

“If the legislature doesn’t follow through, then the state still has an unconstitutional system,” said Mr. Phillis, the executive director of the Columbus-based Ohio Coalition for Equity and Adequacy of School Funding. “I have no clue where all of this is going to lead.” Making sure all of Ohio’s children have equal access to a good education will remain the group’s mission, he added. “We’re not going to go away until that happens,” he said.

More Lawsuits Ahead?

Marty Strange, the Randolph, Vt.-based policy director for the Rural School and Community Trust, said the Ohio ruling may send more money to poorer schools in both rural and urban areas. But he doubts it will put the issue of funding equity to rest.

“The court has gone as far as it is willing to go to force the state to do more, but it’s still going to remain a perpetual political battle in Ohio and everywhere else,” he said. “Standards- based reforms are going to force this issue even further and be the basis for more lawsuits” in Ohio and elsewhere, he predicted.

Following the 1997 ruling, Ohio sought to establish that its financing system provided students with an adequate education by explicitly tying its base funding levels to spending in districts in which students scored well on state tests.

John Myers, of the Denver-based consulting firm of Augenblick & Myers, said he believed that last week’s ruling represented the first time that a state high court had given its blessing to such an approach. “It shows that at least in a state constitutional challenge, an adequacy approach that’s tied to student performance has been upheld,” said Mr. Myers, whose firm was involved in shaping the state’s response to the lawsuit.

Advocates for greater school spending in Ohio said the court ignored a chance to address crucial issues related to the school finance suit. Among them are the court’s past criticism of the state’s reliance on property taxes to pay for schools, possible biases against poorer districts, and a slow-to-unfold process for fixing school buildings.

“This still feels like an adjustment of the existing system,” said Debbie Phillips, the coordinator of the Rural School and Community Organizing Project, an Athens, Ohio-based organization that has lobbied for more funding. She said the court called legislators on their attempts to cut school funding, but failed to address the reliance on local property taxes.

Gary L. Allen, the president of the 126,500-member Ohio Education Association, an affiliate of the National Education Association, said the decision was a step in the right direction. “It directs the legislature in how to make big improvements,” he said.

But, he added, “I don’t think it addresses all the needs of the school districts of Ohio.”

Less optimistic was Tom Mooney, the president of the 20,000-member Ohio Federation of Teachers. “There are still flaws in the funding system that the latest law did nothing to correct,” he said.

Mr. Mooney called for the legislature to increase spending for education. He also said the state still needed to focus on better facilities, technology, and teacher salaries, especially for teachers in urban and rural areas, by reworking the way it doles out education dollars.

“We’re sinking to Southern- state status on our way to Third World status,” he maintained.

Clark Davis, the superintendent of the 1,950-student Fairfield Union School District in West Rushville on the edge of the Appalachian Mountains, said some extra money would flow his way because of the decision, but maybe not for long. “In a matter of a few short years, we’re going to be right back to where we were,” Mr. Davis said.

He said his district falls victim to “phantom revenue,” as some advocates for more education funding in Ohio put it. When a county develops a stronger tax base, it qualifies for less state funding, Mr. Davis said, and state law requires local tax rates to be rolled back as property wealth increases.

State leaders “have tried to solve the problem,” he said, but “they’ve tinkered with it rather than really fix it.”

Siding with the majority on the state supreme court, Justice Andrew Douglas wrote in a concurring opinion that the decision was the best the court could do. Ruling the system unconstitutional would only hurt poor school districts by delaying any chance for a bigger prize, he suggested.

“If a majority of the court would say to the General Assembly and the governor, ‘Try again,’ what would that mean? It would leave the existing paralysis without treatment,” Justice Douglas wrote. “Are we afraid? No. Are we practical? Yes.”

Justice Francis E. Sweeney, the author of the 1997 majority opinion, wrote in one of the three dissenting opinions: “Apparently, in Ohio the battle is over. At the end of the day, can we truly say we have been victorious? Have we done all we can for Ohio’s schoolchildren?

“Can we say that the children in poor, rural or urban areas have been given the same opportunities as their peers who happen to be blessed with the good fortune of living in a wealthy district with a high property-tax base?

“Inherent inequities remain.”

Staff Writer Jessica L. Sandham contributed to this story.

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