Research & Commentary: School Funding Lawsuits

Published August 15, 2011

With state and local governments tightening their belts in response to falling tax revenues caused by the bad economy, school districts facing cuts are increasingly resorting to lawsuits to force governments to give them more money.

In Colorado, 21 school districts are suing to force the state to increase its education budget by about $3 billion, to approximately 90 percent of total current state revenue. The suit is in its third appearance before the state supreme court, which previously ruled state funding should be decided by the voters and the legislature.

Forty-five states have been subjected to similar lawsuits, and not just at the state level but also in local jurisdictions. Claimants usually sue under provisions in state constitutions requiring a “common” or “adequate” education system, claiming lower-than-previous or lower-than-average funding levels deprive school systems of the finances needed to fulfill their constitutional obligations. Courts have been sympathetic to such claims, ruling for the petitioners in about two-thirds of such cases.

Proponents of fiscal prudence cite research showing there’s no correlation between student achievement and school spending above a basic level. They object to courts ordering spending that could bankrupt states and force taxpayers into higher taxes than those approved by their elected representatives.

The following documents offer further information about school funding lawsuits.

Education Takes a Beating Nationwide
The Los Angeles Times considers the impact of nearly $10 billion in education cuts in the past two years. States and districts are laying off staff, cutting programs, and shortening the school year, and many are asking parents to take up the slack. The strain has been heightened by more English-as-second-language students, more states relying on federal funds, which are less stable than local funds, and the continuing national recession.

Trial Set to Begin in Challenge to State’s School Finance Methods
Colorado school districts have sued the state for $3 billion they say is necessary for them to fulfill the state constitution’s admonition to provide an adequate general education, reports the Colorado Springs Gazette. The suit has been winding through courts for six years and has hit the state supreme court for the third time, after previous rulings that leave education funding decisions to the state legislature and voters.

On Today’s School Menu: Litigation
School funding litigation has been brought in 45 states, reports The Wall Street Journal in a brief article noting the rising trend. In addition to Colorado’s state supreme court case, Texas districts also have threatened to sue over cuts made in the most recent session of the state legislature.

Memphis Schools’ Opening Delayed in Budget Fight
CBS News reports on the financial dispute between the Memphis public schools and its city council, highlighting the history of the dispute and its potential to become common among municipalities struggling to cope with funding shortages. City council members state the money simply isn’t there and the requested expenditures could jeopardize the city’s credit rating and financial stability, but school officials argue they have a legal claim to the funds and can’t make payroll without them.

Council Approves MCS Funding
After a standoff in which the Memphis public schools threatened not to open their doors on time for school this fall, the district has come to an agreement with the city council over $78 million in funds the Tennessee courts decided it should pay, reports the Memphis Daily News. After a roughly 6 percent schools budget cut in 2008 from a new city council, the school system sued for the money, saying it could not educate students after the cuts. The city also is negotiating a lawsuit over attempting to cut city salaries to deal with the recession and lost tax revenues.

Warwick, R.I., School Committee Sues City to Restore $6.2 Million in Funding
A Rhode Island school district has sued its city for $6.2 million, claiming state law requires 2010 funding be raised to the previous year’s funding levels, reports the Providence Journal. The city’s mayor expressed annoyance that the school decided to sue instead of assessing its needs after finishing contract negotiations. School officials in Warwick and several other jurisdictions base their legal claims on a letter from the state Department of Education stating the cutting flexibility the state offered cities in 2010 did not extend into following years.

Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this and other topics, visit the School Reform News Web site at, The Heartland Institute’s Web site at, and PolicyBot, Heartland’s free online research database, at

If you have any questions about this issue or The Heartland Institute, contact Heartland education policy research fellow Joy Pullmann, at 312/377-4000 or [email protected].