Litigation Concept

National Center on Education Finance

Education Finance Litigation: History, Issues, and Current Status

During the last 30 years, school finance litigation has significantly affected education reform. Court rulings concerning education finance have shaped the agenda of school reformers and legislatures alike and also have clarified the roles of different levels of government in the provision of education. Early in the history of education finance litigation, the U.S. Supreme Court ruled that education was essentially a state issue and was not protected by the U.S. Constitution. This ruling has significantly impacted the direction of education finance litigation, making it an activity that occurs primarily at the state level.

At the state level, school finance litigation has met with considerably more success. Although courts have ruled state education funding systems unconstitutional and ordered them remedied, the important contribution of litigation at the state level has been the introduction of two key concepts in education funding: 1) that schools must be funded equitably and 2) schools must be funded at an adequate level. Equity was the basis for many of the early education finance cases, with plaintiffs arguing that large disparities in funding levels were unconstitutional. In the 1970s, several education finance equity cases were heard, and many courts ruled in favor of the plaintiffs. As a result of these decisions, states established equalized education funding programs, reducing the range of spending between school districts.

During the past 15 years, equity-based litigation has gradually been replaced with adequacy-based litigation. Adequacy claims rest on the idea that although equity may have reduced variation in spending, the state also is responsible for providing a basic level of funding that is sufficient for a proper education. Many state education clauses refer to the provision of a "thorough and efficient" education, and plaintiffs have found fertile ground for litigation in these clauses.

The effect of adequacy litigation has caused states to develop a rationale for the amount of money spent on education. Traditionally, education funding levels are a politically determined number, based on the availability of funds, legislative priorities and so forth. In adequacy cases, courts have ruled that legislatures must provide evidence that the amount of funding appropriated to education is enough to ensure an adequate education. States have responded by using various adequacy models to determine a proper level of funding.

As we will see, the trajectory of education finance litigation has significantly affected the way schools are funded and also has prompted new thinking about the responsibilities of states in the provision of education.

History of School Finance Litigation

Traditionally, school finance litigation has been contested on the grounds that: 1) education is a fundamental right; 2) equity in educational spending is necessary for equal protection under the law; 3) disparities in funding based on wealth create suspect class discrimination; and 4) state education clauses guarantee a universal or adequate education for all. These claims have been tested in many courts, but since the Supreme Court ruled in San Antonio vs. Rodriguez, it has been clear that school finance litigation has been pursued primarily at the state level.

Education Finance Litigation at the Federal Level

San Antonio vs. Rodriguez (1973) was primarily contested on the grounds that education is a fundamental right. There was also the claim that inequities in school finance were based on wealth discrimination, thereby reducing poor students to a suspect class. This, the plaintiffs claimed, was a violation of their 14^th amendment rights to equal protection. In response to the claim that education was a fundamental right, the Court disagreed with the plaintiffs analogies, ruling that education was not a right guaranteed in the U.S. constitution. To support their case, the plaintiffs used cases concerning an individual's rights to a divorce or to have council after being charged with a crime. However, the Court stated that these cases were centered on whether an individual was granted access to a service at all, not on the level of service, upon which the plaintiffs argument rested.

In response to the claim that education was a key component to civic participation, the Court responded that housing, food and other types of subsistence are just as important to civic participation. Because none of these means of survival are constitutionally protected, neither could education be. As to the wealth discrimination argument, the Court ruled that there could be differences in levels of educational funding, provided that no invidious discrimination was occurring, which they did not feel was true in this case. This was because differences in funding took place at the district level, not at the individual student level; therefore, suspect wealth classification was inapplicable. It is worth noting that the Supreme Court did not completely close the door on education finance litigation; it upheld education as a right, even though it did not specify the level at which it should be funded.

Equity and School Finance Litigation

Since this ruling, school finance litigation has not been pursued at the federal level. Unlike the experience at the federal level, however, plaintiffs in state cases found a more sympathetic audience in state courts. Serrano vs. Priest in California and Robinson vs. Cahill in New Jersey are the most famous examples of school finance litigation at the state level. In Serrano vs. Priest, the state Supreme Court found for the plaintiffs based on the equal protection argument, disregarding the state's claim that the current system was necessary to ensure local control and decision-making. In Robinson vs. Cahill, the Supreme Court found that the New Jersey school finance system violated the state's education clause pertaining to a thorough and efficient system of education. The court defended this position by noting that disparities in school funding were extremely high in certain cases, creating a situation in which education was not being provided to all students in a thorough manner. The importance of these cases is that: 1) school finance litigation could realistically be pursued at the state level; and 2) in the Robinson case, a court-ordered reform of the education finance system could hinge solely on a violation of that state's education clause. Adequacy litigation arose as a direct result of the fact that state educational clauses became one of the most effective ways to overturn school finance systems.

Adequacy and Education Finance Litigation

In 1975, several parents brought suit in West Virginia, claiming that the education finance structure of the state violated the education clause of the state constitution. In 1979, the state Supreme Court of Appeals upheld the case, stating that a "thorough and efficient" education was a fundamental right under the state constitution, and remanded the case for trial. In addition, the court laid out a standard for education within West Vriginia, stating that the education system within the state should:

" develop, as best the state of education expertise allows, the minds, bodies and social morality of its charges to prepare them for useful and happy occupations, recreation and citizenship, and does so economically. "

This case marked the first time that a court held that an educational system within a state should allow students to achieve a certain level of educational proficiency. Although the establishment of standards may be seen as an example of judicial "activism," the court left it to the state Legislature to determine the components necessary for an adequate education.

Perhaps the most well-known adequacy case was filed in the mid-1980s in Kentucky. In Rose vs. Council for Better Education, 66 low-income school districts in Kentucky claimed that the state education finance system violated the state's education clause found within the constitution. Not only did the court find the school finance system unconstitutional within the state, it also struck down the entire public education system for violating the state's education clause, saying that, " It is crystal clear that the General Assembly has fallen short of its duty to enact legislation to provide for an efficient system of common schools throughout the state.... The common school system in Kentucky is constitutionally deficient." As a result, the court mandated that the property tax system within the state be reformed, ordering the legislature to provide an educational system that was "sufficient to provide each child in Kentucky with an adequate education." The court went on to outline seven learning goals, including: 1) "sufficient oral and written communication skills;" 2) "sufficient knowledge of economic, social, and political systems;" 3) "sufficient understanding of governmental processes;" 4) "sufficient self-knowledge and knowledge of his or her mental and physical wellness;" 5) "sufficient grounding in the arts;" 6) "sufficient training or preparation for advanced training in either academic or vocational fields;" and 7) "sufficient levels of academic or vocational skills to enable public school students to compete favorably with their counterparts in surrounding states."

As in West Virginia, the Kentucky court established a set of academic standards that are necessary if students are to be able to function in and contribute to society. It is important to note that these standards were set before the standards-based reform movement became widespread in education. In addition, and perhaps more importantly, these standards were established at a time when they could not properly be measured because of the lack of testing systems.

Another adequacy case of note came in 1995 in Wyoming. Campbell County School District vs. State was filed on the grounds that the school finance system in Wyoming violated the equity and adequacy mandates of the state constitution. The court proceeded to dictate the duties of the Legislature that were necessary to provide the opportunity to "prepare high school graduates to participate in the political system and to compete both intellectually and economically." These duties included, among other things, small class sizes, ample and appropriate provisions for at-risk students, and meaningful standards and assessments. The court held that education was a priority of the Legislature and, as such, the Legislature needed to provide a rationale for the level of funding it provided to students.

This case is notable in that the court did not stop at merely declaring the finance system unconstitutional or establishing educational standards, but went further, declaring that the Legislature's funding level for education should be able to stand up to a rational basis test. Before to this case, the level of education funding provided by legislatures often was a function of the amount of money that the state was able to spend on education. Campbell County School District vs. State ushered in a new era of adequacy litigation in its recognition that there should be a rationale behind an "adequate" level of education funding within a state, setting the stage for the DeRolph vs. State of Ohio decision.

In 1991 the Ohio Coalition for Equity and Adequacy of School Funding filed suit in DeRolph vs. State of Ohio, claiming that the Ohio school finance system was inequitable and inadequate. Six years later, the Supreme Court of Ohio ruled on DeRolph v. State, stating that the funding system was inadequate, mandating that significant changes be made to the system, including a revision of the state finance formula, a reduction in the reliance on property taxes, and requiring that the insufficiency of state funding for school buildings be addressed. Three years later, the court ruled in DeRolph II that the state funding formula was still unconstitutional, despite major efforts on the part of the governor and legislature. Finally in September 2002, the court ruled against the finance formula again, but requested only minor changes.

In its prescription of the changes needed, the court identified the main conflict to be the decision of the state legislature to eliminate some districts in the methodology used to establish an adequate funding program. Although these changes could have a significant effect on the new funding system, the decision was still a major victory for education adequacy reform.

Conclusion

Adequacy-based challenges represent a new stream of thinking in the approach to school finance litigation. Several factors appear to make adequacy-based challenges a more robust means of challenging school finance systems. Education as a "fundamental right" cases have been treated carefully by courts, because granting fundamental rights claims can open the door to the establishment of a wide scope of governmental responsibilities in regard to the provision of public services. In contrast, adequacy cases are based on the specific language of the state educational clause, limiting the degree to which the state government must ensure educational services. In addition, the equity litigation on education finance has created complicated situations in which courts and legislatures have had to devise equalization measures within the school finance formula, often at the expense of local control. By focusing on the adequate level of funding, rather than on how equally the funding is distributed, courts can ensure a proper level of education without having to significantly interfere in the affairs of local districts.

A significant question concerning adequacy litigation is the manner in which the actual cost of providing an adequate education can be determined. With the onset of standards-based reform, many states have implemented standardized testing and accountability mechanisms. The DeRolph decision in Ohio recognizes the legitimacy of these measurements of standards in determining adequate education levels. In Wyoming, after the court ordered the Legislature to assign a dollar amount to an adequate education, the "adequate" costs were derived from the recommendations of experts. These recommendations outlined the necessary components of an adequate education. Attempts to determine the cost of an adequate education are pointing to the future of school finance litigation, in which courts are demanding that states not only provide an adequate education, but also demonstrate that the level of funding is truly adequate.

For more information on contact Mark Fermanich @ 303-364-7700.

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