Will Ohio’s Children Benefit from the DeRolph Ruling?

Published July 1, 2000

How have children fared following other lawsuits like Ohio’s DeRolph, where courts have deemed unconstitutional disparities between public schools that result from different levels of local spending by districts? Do schools improve when judges take the responsibility for funding public education out of the hands of local communities and give it to state officials?

Deja Vu in California

On May 17, the American Civil Liberties Union sued the state of California, saying that “appalling conditions” regarding safety, sanitation, and educational resources in public schools serving low-income children violated the state constitution’s guarantee of a free and equal public education for all.

The lawsuit comes as a surprise, since every student in California–including low-income students–has been funded equally for the past quarter-century as a result of the Serrano v. Priest case in 1971, the first of the equalized school finance rulings. Ironically, the Serrano ruling was supposed to correct gross disparities in educational resources between school districts caused by different levels of funding in different districts.

One result of Serrano‘s divorcing of public school financing from local property taxes was Proposition 13 in 1978. Serrano required that all local property taxes be delivered to the state for equal distribution among all school districts. Understanding that high local property taxes would no longer benefit their local schools, voters overwhelmingly approved Proposition 13 to slash local property taxes.

Testifying before a U.S. Senate Committee, the late Professor Charles Scott Benson warned: “You must be very careful when you wish for things because you may just get what you wish for. We worked hard for equity in California. We got it. Now we don’t like it.”

Changed Priorities in Arizona

In 1994, the Arizona Supreme Court ruled that it was unconstitutional for school districts to rely on unequal property tax bases to fund school construction, demanding that the legislature create a more uniform funding mechanism.

As a result, today a state board decides which old schools will be maintained, and how, and which new schools will be built, and where. As a result, local communities that never bothered to build schools before now are demanding them, according to a recent report from the Goldwater Institute.

For example, the Vail School District used to enroll its older students in nearby districts, thereby avoiding the need to build a high school at local expense. But after the new school construction system went into effect last year, the district requested a new high school from the state board, sending two busloads of residents to Phoenix to lobby for the project. Funding for a new school was approved–at the expense of all Arizona taxpayers, not Vail residents.

Donations to Schools Assailed in Vermont

In 1997, the Vermont Supreme Court ruled that it was unconstitutional for different towns to be able to raise different amounts of money for their schools by means of different property tax rates.

To comply with the ruling, the state established equal funding of all schools and approved a statewide property tax. This increased the tax rate in so-called property-rich towns while simultaneously cutting their school budgets. Many of these towns wanted to restore the funds cut from their school budgets, but found that if they raised local property taxes even higher, a large portion of the new taxes would still go to the state.

So parents in Stowe decided to ask for donations for the local school, and they raised $2 million that way. But their fundraising strategy brought objections from school boards in the “receiving” towns, which had seen their property tax rates go down and their school budgets increased.

According to a report in Forbes magazine, those objections found a sympathetic ear at the local chapter of the American Civil Liberties Union, which now wants every dollar raised locally by bake sales or other fundraising activities to be deducted from the state allotment to that district. That way, every child in a Vermont public school will be funded at the same level.

Voters Defy Experts in New Hampshire

After the New Hampshire Supreme Court’s 1997 ruling that the state’s local property tax was an unconstitutional means of funding public education, the state legislature instituted a statewide property tax, which resulted in property-rich towns “sending” tax dollars to property-poor towns.

Now that a new stream of state revenue is flowing into the property-poor towns, officials are dismayed to find that voters still are not willing to raise their taxes to pay for school improvements and still are voting down school referenda.

For example, in Claremont–the property-poor town that was the chief litigant in the school funding lawsuit — voters in March rejected a $19.32 million budget that included higher pay for teachers and increased spending on special education. In the lawsuit that brought the 1997 court ruling, it was argued that the citizens of Claremont could not raise adequate funds for their schools because it necessitated relatively high tax rates.

“The statewide property tax system seems to be working exactly the opposite of how it was supposed to work,” Meredith Town Manager Peter Russell told Foster’s.

George A. Clowes is managing editor of School Reform News.